The phrase ’scale your business’ is thrown around by business owners when they mean revenue growth. But “scaling” business is about much more than revenue growth.
Scaling is about proportion.
Scaling is about ensuring the functional areas of the business all keep up with, in the proportion needed, to the increase in revenue. Those areas include; sales, marketing, operations, finance, and administration.
Without the proportional changes in the main business, scalability suffers and can be catastrophic to the effectiveness of the business.
As a result, an ineffective business loses customers, profitability and good people frustrated over the poorly run operation.
That’s why it’s important to bring intention to your growth plans. It’s about more than revenue, it’s about the survival of the business.
My Business Scaling Story
My first attempt at growing and scaling a business was in the warehousing and distribution industry.
I wanted to build a business from zero revenue and one employee (me) into a multi-million dollar powerhouse. I was young and impatient. Now I’m older and still impatient.
As a result, in three years, I built the business from zero revenue to over $5 million annually in 3 years.
There were painful and costly lessons learned during those three years. I could write an entire book about them. I’ll address some of the key mistakes and lessons I learned scaling a business for rapid growth.
I split the categories into; Clarity, Sales, and Foundation, for simplicity. I have addressed Mindset as its own separate page.
How to Scale Your Business with Clarity
Scale, as it relates to business, is defined as being coherent and intelligible, but I’d go so far as to say clarity is vital to the success, and future growth, of your business.
What is the unique problem your business is the solution to? Do you know? Is it clearly stated in your marketing materials? During a sales call?
What is your company about? Your mission? Do you have one? Do your customers know? Is it shared with them?
Why is your company uniquely qualified to be offering this product or service? What is your track record? Do you have case studies that you share with prospects?
In my warehousing business, I was very clear when meeting with potential customers. I would say things like; “We are 3rd party warehouse and distribution company so companies like yours don’t have to go into the warehouse business.”
Saying this, combined with case studies and clear explanation of the services we offered, allowed us to quickly gain market share.
You may know that identifying your ideal customer (Avatar) is a good thing to do. But, have you done it? Do you know who your ideal customer is?
Have you identified their demographic?
For a business, that could include; the revenue size of the company, the number of employees, industries and other characteristics.
For individuals, that could include age, marital status, race, religion, income level, number of children and other characteristics.
In addition to demographics, are psychographics.
What are there interests? For a business, this would include; industry, trade shows visited, associations they are a member of and similar characteristics.
For individuals, you may want to know; their hobbies, interests, political orientation, causes, people they follow, movies they watch and other similar characteristics.
In my warehousing business, I look for Product companies that were already outsourcing to 3rd party warehouses or growing beyond their own onsite warehouse.
Clarifying your message and identifying your market allows you to know where your ideal customer is, and the best media to use to engage with them.
It makes no sense to use LinkedIn if your ideal customer isn’t. What if they attend certain association meetings or trade shows? That may be the best way to get your message in front of them.
Once you have clarity, you need to understand…
The Importance of Sales In Your Efforts to Scale
To scale your sales efforts proportionately means to ensure relationships are not sacrificed while you grow.
While some pain is unavoidable, the amount of dissatisfaction your customers’ experience can be minimized.
Measuring Your Sales Effectiveness
How do you track your sales success? Is it just through revenue growth? I hope not.
Here’s some of what I learned to track:
Connections – not calls, anybody can dial a number or knock on doors, but a connection is when you actually reach someone, in person or on the phone.
Type of Account Called – we categorized prospects into A, B, C, and D buckets. Sales quotas were assigned based on account type. This ensured the team wasn’t always going after the big accounts which take longer to close but ensured we were consistently closing B and C accounts for steady and consistent revenue.
Call Notes – we verified that all connections and calls were recorded in our CRM in the appropriate format. You can’t manage what you don’t track.
Follow Up – is the sales team following up with the existing customers, or prospects in a timely manner. IBM did a study where it sometimes took 8 contacts before a customer buys. The fortune truly is in the follow-up.
About six months into my warehousing business, I identified my ideal customer characteristics. I found companies fitting that profile and pursued them.
One company I pursued for a year finally “signed up.” It more than doubled my business overnight. We went from doing $100,000 per month to $250,000 in revenue, literally overnight. That’s how powerful clarity, with an effective sales organization, is.
To handle that increase in business, you need to…
Build a Strong Foundation for Growth
I learned the hard way you can’t grow a business on a personality. Whether that personality was me as the boss or other personnel in key positions.
In my work, I’ve seen too many businesses falter when “John” or “Mary” is out of the office.
Either there’s a personality or a process. A business must have systems and processes in place, in most areas, for it to be able to scale and grow rapidly.
Besides, without processes, there’s the dependence on personality AND more emotion.
Think about it. Stress, worry, and frustration are usually the result of someone; forgetting to do something, or doing it wrong.
The cause for this stress is frequently a lack of documented process.
You can’t manage what you don’t document.
That why in my first, and subsequent businesses, we ended up with processes for just about everything we did. Here are a few “How To’s”:
- Take orders over the phone
- Print pick tickets
- Unload trucks
- Answer the phone
- Issue invoices
- Reorder supplies
- Perform maintenance on the forklift
One of the many benefits of having formal systems and processes is the increase in consistent and quality service. If we had a service failure, we could track it back to a particular system and modify it as needed.
Ultimately, scaling a business is about moving toward the owners’ vision and more fully realizing the mission of the company.
Growing your business is about building something bigger than yourself as a result of your efforts. Growing is about legacy and impact.
And scaling is about profitability.
Without clarity, a strong foundation, and strong sales effort, your business languishes, and worse feels like it could collapse at any time.
Of course, not everyone is onboard when it comes to growth. Sometimes, the biggest obstacle to growth is the owner or key personnel. Not because they’re bad, but because they care so much about the business. Letting go, or relaxing their grip, is the hardest part.
Scaling is why I work with companies to create and architect a scalable business plan. We work to create a plan for rapid and scalable growth that addresses these issues, and other potential pitfalls.
And this barely touches on the emotional issues that need to be addressed, by the owner or key personnel. Their response to change can sabotage the effort.
Why You Should Create a Scalability Plan for Your Business
The benefits should be obvious by now:
- Increase profitability
- Leverage key personnel
- Decrease dependence on key players
- Build a business not a job
- Increase internal communication
- Increase external communication with customers
- Decrease the owner (key personnel) stress
A Good Scalability Plan Should Include:
Assessment – as in where the business is, as compared to your vision and mission, in regards to; sales, marketing, operations, profitability and administration
Recommendation to fill the gaps, growth, and scalability
A Plan to get you from where you are, to where you want to go, to include the desired exit strategy.
How to Get Started
The price for a Scalability Plan can range between $3,000 – $9,000 based on the size (revenue, employees, etc) of the business and other factors.
What I suggest is that you schedule a complimentary 30-minute Fact-Finding consultation with me to review your situation and identify appropriate next steps.
The consultation allows you to explore whether pursuing a scalability plan makes sense to you or not. Not everyone wants to rapidly grow their business, some owners are happy with how things are. If that’s you, no worries.
You may be an owner looking to leverage your time, energy and resources. Or you could be an owner who wants to eventually sell your business. Or, you may want to realize its full potential, then register for the next “Path to $10 Million – The 5-Step Process to Set Your Business Up to Confidently Surpass $10 million per year in annual revenue.”