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How to Scale Your Business Simply
4 mins
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Looking to scale your business? Research from McKinsey1 found that only 22% of new businesses launched in the decade to 2021 successfully scaled. But – they obviously didn’t read this article! Dive in as we run through practical tips and strategies to help you scale your business successfully.
What does it mean to scale a business?
Scaling a business can sometimes be confused with growing a business. Though there are similarities between the two, there are also key differences:
Growing a business is when a business adds/invests in new resources – such as team members or technology – and thus increases its revenue at the same rate.
Scaling a business is when an enterprise identifies ways to operate more efficiently so that it increases its revenue without substantial spend on new resources. It takes thoughtful and strategic planning to succeed; the goal is to create sustainable growth that doesn’t compromise the business’s quality or culture.
Common mistakes made by businesses trying to scale include doing so too fast or too early – such as when a new business is still establishing its core goals/product lines/customer profiles.
1. Understand your market
Before diving in with an ambitious scaling plan, it’s important to really understand the market you’re operating in. Consider the current health of the economy: in times of recession, consumers watch their spending more closely which you should factor in when exploring new opportunities.
It’s also important to research your competitors. Knowing what they’re offering – and just as importantly, what they’re not – will help you identify where your business can meet gaps. A great place to start is with a competitor analysis. Our guide to conducting a competitor analysis (with free template) will show you how to uncover market trends that can influence your scale up strategy.
2. Identify target audience
You need to really understand your target customers to identify growth opportunities. A good place to start is by analyzing your current customers’ behaviors:
What are their key pain points and challenges?
How did they find your business?
Which of your current marketing strategies have been most effective in engaging them? What feedback do they give you about your business?
These questions will help you identify the most effective route(s) to acquiring new customers.
3. Allocate resources
Though scaling up your business emphasizes increasing revenue with minimal investment in resources, there are some areas where you will need to spend. It’s about strategically allocating resources – time, money, technology – to where the biggest Return on Investment (ROI) will be achieved. Once you have defined your priorities for scaling, you can balance that with your budget – whilst not neglecting your existing core activities. Automating and outsourcing jobs are things to consider, too.
4. Invest in technology
Automating your logistics processes can support your business as it scales. For example, inventory management software uses predictive analytics to help you better forecast demand surges and automatically order new materials from your suppliers when needed. This means you’ll never face stock outs or missed sales opportunities. Meanwhile, automated picking technology in your warehouse can increase the number of products packed and shipped out to customers per hour.
From autonomous delivery vehicles to artificial intelligence, these are the technologies that can help your business meet demand as it scales.
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