Growth

The do’s and don’ts of scaling your small business

- April 19, 2024 4 MIN READ

Starting a small business is a journey in itself, but at some stage you may find yourself considering whether to grow and begin the next chapter, writes Angus Sedgwick, CEO of OptiPay. So what do you do next?

For many small business owners the thought of scaling up is too daunting. A recent report by Industry Innovation and Science Australia (IISA) found Australia has a scale-up problem, not a start-up problem, with small business predominantly focusing on small domestic markets due to low levels of free cash flow and limited human capital.

Scaling a small business requires careful planning, strategic decisions and a clear understanding of the risks. But with the right processes in place, it is possible to achieve growth.

Here are the six Do’s and Don’ts that small business owners need to know

DO


  1. Thorough Market Research

Before you begin thinking of expanding, make sure you have a comprehensive understanding of your market and current market position. Conduct thorough market research to identify potential gaps, analyse consumer behaviour and gain insights into your competition. By obtaining a deeper understanding of your market, you can tailor your growth strategy to meet the needs of your customers effectively.

  1. Develop a Clear Growth Strategy

Outline your goals for scaling up and be really clear about what you want to achieve – do you want to enter new markets? Launch a new product? Or increase your customer base?

Understand and define your resources, budget and timeline for achieving your short-term and long-term goals and set measurable KPIs that will allow you to track your progress and make data-driven adjustments along the way.

  1. Invest in Technology and Automation

Consider ways technology might be utilised in your business to reduce human error and manual labour. Look at implementing software solutions for things like inventory management, customer relationship management, financial tracking and data analytics. If you’re going to scale-up you want to identify where efficiencies can be made and free up your team to focus on more strategic tasks.


  1. Build a Strong Team

Team morale and employee engagement is key when you’re planning to scale your business as you will need them more than ever. Hire individuals who are not only skilled but also share your company’s values and visions and are driven by success. Foster a culture of collaboration, innovation and continuous learning. You should be open with your staff about growth plans to make sure the scaling process can run smoothly and that they can grow alongside your business.

  1. Diversify Revenue Streams

Relying solely on a single product or service can leave your business vulnerable to market fluctuations. Consider what opportunities there are to diversify your offerings based on your core strengths. Are there complementary products or services you could offer that align with your brand and resonate with your existing customer base?

  1. Have a Customer-centric Approach

Sometimes the customer can get lost in efforts to scale a business. Delivering exceptional customer service should always be at the forefront of your expansion efforts. Actively gather feedback and testimonies and address concerns promptly so you can continue to improve your offerings based on customer insights.

Don’t

  1. Ignore Financial Health

Scaling up requires investment so make sure you understand the current financial health of your business. Develop a realistic budget based on your 12 month cash flow and consider what funding options are available to you. It’s difficult and time consuming to get a traditional bank loan in the current economic climate so it may be worth considering alternate options such as invoice financing to ensure you navigate potential cash shortages.

  1. Lack Scalable Systems

Inadequate processes can hinder your ability to scale efficiently so ensure your operations will be able to handle an increase in demand without compromising on quality. Consider implementing scalable systems for order processing, inventory management and customer support to avoid bottlenecks and delays.

  1. Overextend Too Fast

Something we often see with growing businesses is that they expand too quickly without the infrastructure or resources in place to support scaling up. This can lead to burnout and operational challenges. A better strategy which involves far less risk  is to plan for gradual and sustainable growth.

  1. Neglect Marketing

Growth won’t happen without ongoing marketing efforts. Make sure you have a strong marketing strategy in place to ensure your business gains visibility and attracts new customers. Use a mix of online and offline channels such as social media, content marketing, email campaigns and networking events to keep the momentum going.

  1. Ignore Competition

Stay informed about your competitors strategies, strengths and weaknesses so you can refine your own offerings and stay ahead of the game. Failing to monitor your competitors can leave you blindsided by market shifts or emerging trends. You can’t grow your business if you’re not aware of the changing landscape around you.

  1. Lose Sight of Core Values

As your business scales, make sure you don’t lose sight of the core values and mission that originally set you apart. Stay true to your brand identity and maintain consistent messaging. Customers are drawn to authenticity and you want to retain your old customers whilst also attracting new ones.

It may seem overwhelming thinking about scaling your business but it’s an exciting journey that lies ahead. With the right strategy and a dedicated team, your small business can thrive and achieve new heights of success.


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