The verb ‘to scale up’ or ‘to scale,’ in this context, means to make a business expand in a proportional and profitable way. When a company grows, it is important to make sure that it expands in a financially and commercially healthy way.
Scalability is a measure of how fast or slowly a company, system, or any entity can adapt to greater demand and growth.
Getting your 1000th customers is quite different from getting your first. Hiring your 100th worker is not the same as hiring your first. As your client base and workforce grow, your company needs to be able to function efficiently and profitably. To scale up means to be able to do that successfully.
When a business begins to grow, i.e., to scale up, some weaknesses may become evident. Sometimes, it is not possible to fix them – it is too late. At this point, the company’s biggest problem is growth – it can’t expand without getting into serious trouble.
Prepare for growth
It is important to prepare beforehand for growth. If you set up a startup, you need to think carefully about how growth will affect the business. It is possible to prepare yourself – you can be ready to scale up.
Learn from your larger competitors
If you can, try to find out how your larger competitors managed to scale up successfully. Find out as much as you can about them. What is the size of their workforce? How many vehicles do they have? What is the size of their current office or factory space? How are they selling, and where? What technology do they use?
Put simply, try to define their current business model. Where they are now is where you hope to be one day. By observing them, you can prepare yourself more effectively.
Where are you now?
Before even thinking about growth, you need to know and define exactly where your business is now – where does it stand?
What if sales doubled?
After you have managed to do that, imagine what would happen if sales suddenly doubled. Would your company be able to cope?
In most cases, when a client places an order, they do not pay any money upfront. You may not see any money from that client until about 30 days after you have delivered their order.
Would you have enough money to survive if sales doubled, or would you have a serious cash-flow problem?
If you are not sure how you would cope, talk to your bank manager. Your bank may be able to arrange an overdraft facility or facilitate a short-term business loan.
Another option might be to find a partner with money. However, you would need to be prepared to give up some of the ownership of the business.
Employ good workers
An excellent workforce is much more likely to adapt to growth than a bad one. From day one, as you hire new employees, try to get the best people possible.
Outsourcing is also a useful option if you want to expand without increasing your workforce. Outsourcing refers to hiring an outside firm to perform some of your business duties, such as delivery, manufacturing, or credit control. Rather than doing everything in-house, you could outsource (contract out) some operations.
Good technology is essential
Since the advent of the Internet, e-commerce has grown and spread dramatically across the world. The Internet has changed how we work, play, study, watch our favorite movies and shows, shop, and manage our finance and banking operations.
When you purchase software, hardware, or any type of technology, make sure it is scalable, especially your software. It needs to be able to grow alongside your young company seamlessly.
There are many products on the market today that can save a lot of money and time. Did you know that there is software that can do all your marketing for you?
Just remember to be ready well in advance for growth. If you have prepared yourself and your workforce, you are less likely to come across unexpected weaknesses that could undermine all your business goals and objectives.