5 Actionable Steps to Scale Your Small Business
Updated: Nov 22, 2019
September 3, 2019
Growing your business is an exciting endeavor indeed! But where do you start? All too often business owners express a desire to scale their businesses - whether that means expanding product lines or services offered, hiring more employees, appealing to a wider demographic, transitioning from a traditional storefront to an e-commerce website, or expanding their geographical reach - yet they haven't taken any steps to prepare for such substantial growth.
While it's always wise to begin with the end in mind, it's just as important to begin taking steps today that will better position you for growth and expansion.
1. Systematize and automate back-office functions
Robert Kiyosaki, author of Rich Dad Poor Dad, Rich Dad’s Cashflow Quadrant, and many others, says the main difference between a self-employed person (S-quadrant) and a business owner (B-quadrant) is the use of systems. Having no systems in place means you are the system, which means your business cannot function for very long, if at all, without you. Systematizing your internal processes is one sure-fire way to take you from from the self-employed (small business) quadrant to the business owner (large enterprise) quadrant.
Our clients tell us that one of the most daunting and stifling parts of running a company regardless of size is having to deal with routine processes such as bookkeeping, invoicing, payroll, bill pay, etc. If you are still doing these things manually, you might feel the same way. The good news is nowadays you can almost always find a specialized application that solves your needs and provides the automation and streamlining you're looking for. These apps perform tasks better than you can and with minimal effort by you, freeing you to spend your time elsewhere and making them totally worth what you pay for and more.
Most people are excited to go into business to do something they love or something they’re skilled at, or for some people, something they can make a lot of money doing. My guess is that the majority of entrepreneurs and small business owners aren't excited about spending 80+ hours each year on accounting. By leveraging the power of technology and incorporating automated systems into your daily workflow, you can reduce the time and energy spent on those mundane, repetitive back-office tasks that provide little tangible value, and instead devote more time and energy to running, scaling and growing your business.
2. Build a solid team
I’ll keep this one short and to the point: employing the right people is key. You need to employ motivated, hard working problem solvers to whom you can delegate the right tasks. We all have strengths and weaknesses, so pass the things you’re not so great at off to someone who can do it better - and hopefully someone who loves it. Sure, you’ll have to pay to keep those hard-working people around, but trust me, having the wrong people on your team or assigning people to the wrong roles will end up costing you way more in the long run.
3. Measure everything
“If you don’t measure it, you can’t manage it.” - Our CEO, Marc Berger’s favorite quote. It’s true; if you don’t know how your business is performing you are left completely in the dark, unable to plan realistically for the future and incapable of scaling your operations.
You should be monitoring things like your cash flow, cost of goods sold, accounts receivable (AR) and accounts payable (AP), gross margin, operating margin, and retained earnings to name a few, along with any other relevant key performance indicators (KPIs) to your industry or trade. Of course, the more metrics you track, the more information you have, the better off you’ll be.
Referring again to the Cashflow Quadrant mentioned earlier, knowing every last detail of your business performance gives you the information you need to begin systematizing and streamlining your processes, addressing inefficiencies, and automating wherever possible, so that you can begin moving from an 'S' to a 'B'.
4. Be a lean operator
You can’t grow and scale your business if you’ve got too much junk in the trunk. It’s important to have employees to take care of necessary business activities, yes; but it’s also important that you’re not draining yourself each month paying salaries and employment taxes. Employ only the number of people you need, and only those who produce actual, tangible value.
A small real estate business in our area lost three of their team members (out of a team of 13) for various reasons in just a few weeks. Because they were now short-handed, the remaining team members were strategically assigned tasks to disperse the added workload. And, surprisingly, the productivity and culture in the office actually improved. “We weren’t behind, we weren’t struggling. You couldn't even tell we’re down a few people,” the owner recalled. He discovered the importance of allocating the right talent to the right tasks in order to maximize the efficiency of his team.
Same goes for overhead. Seek to minimize the amount of money, time, and energy spent on things that don’t provide much value or benefit (for example, do you really need to pay for a premium Spotify subscription for the office?), and devote those resources to more to value-added activities. Doing so will help to keep costs low and profits high.
Sometimes less is more. Lean operating is one of the best ways to facilitate scalability for your company.
5. Lastly, take some risk
I know, I know. Risk isn’t everyone’s cup of tea. But you can’t grow and conquer without a healthy amount of risk, right? All too often, we find that self-employed people become ‘stuck’ between wanting to grow and scale their businesses and being afraid to take the leap. I get it. But to remind you of the importance of taking risks, I’ll leave you with this: “You’ll always miss 100% of the shots you don’t take.” — Wayne Gretzky.
Leave us a comment and let us know what steps you're taking to scale and grow your business this year.
Pure specializes in systematizing company processes by leveraging cloud-based applications and data-driven decision making. Contact us to request a free consultation!