Investing in tech is a good step in scaling your business. For example, partnering with a tech company like Fincra can solve your payment challenges.
Often, people wrongly interchange scaling and business growth; when businesses grow, they add revenue corresponding to added resources. For scaling, businesses add revenue at a much greater rate than cost. Scaling is an important concept in the start-up ecosystem. It allows businesses to grow without wasting resources on the growth strategy and process.
For growth, businesses have to add new resources- people, technology, capital- before they can increase revenue. Businesses need a lot of resources to maintain constant growth, and most businesses can not afford it.
For example, an e-commerce company sells to 50 customers and is about to take on 50 more. While 50 more customers will bring in more customers, this will require the company to hire more people and tools.
For scaling, businesses need only little to no resources to increase revenue. Scaling resonates well with modern founders because they can increase revenue without incurring high costs.
Scaling is crucial to businesses in that phase between being a start-up and a large corporation. This stage is when a start-up decides how they want to grow. The most important question to ask when thinking about scaling is; will your business system be able to accommodate growth?
Here are five things to do before scaling your business
Before taking any step towards scaling, the first thing is to evaluate the company from top to bottom to see if you are ready for growth.
Envisage the kind of growth you want and if the current system in your business would be able to cope with it. A specific sales forecast helps evaluate whether your business is ready to scale.
Break down the specifics in numbers, new customers, orders, and revenue. Then, do another breakdown of the resource you need to handle the forecast numbers, from people to technology, infrastructure, system etc.
Study your current Profit and Loss statement and see how scaling could impact your business.
Despite scaling being cost-effective, businesses need money for this strategy. With the new funding, business owners can develop a minimum viable product to bring new sales and revenue and establish market fit.
In scaling, business owners also need money to implement a digital transformation, improve technology, train or hire new staff etc.
3. Investing in technology
Scaling a business with minimum resources requires technology. With technology, businesses can rely less on manual processes and less labour, making the process efficient for all relevant stakeholders.
Implementing a complete digital transformation for your business benefits your business and your customers. Technology improves operations, business performance and customer experience.
For example, automating your payment experience with Fincra can make it easy for your business to receive money from customers anywhere in the world and different currencies.
With our payment infrastructure, Fincra can enable your business to receive money via different means- Checkout, cards and bank transfers. Businesses can also send money with Fincra to bank accounts, mobile wallets and cash pickups.
There are so many benefits of automating your payment process with a partner like Fincra. Reach out to the Sales Team or get started yourself.
4. Secure sales
Scaling is mainly dependent on the increase in sales and revenue. To secure more sales, business owners must put the structure in place to generate more sales. How do you generate leads, and what marketing strategies are you using to track and manage these leads? Do you have enough sales reps following up on these leads?
These are the questions businesses have to answer about sales when talking about scaling.
Scaling happens with a change of mindset, processes and technology. Although it doesn’t necessarily have to come with new hires, the current workforce needs the training to adopt the new processes, technologies and methods to enhance scaling.
Scaling isn’t easy and is one thing that keeps CEOs awake. The right pace for growth is a head-scratcher in business. Companies have learnt that fast growth does not put you on a path to success, with studies showing that slow-growing companies tend to be better in the long run.
This does not mean that growing quickly is bad for your business, but to scale at a fast rate requires planning and deliberate strategies. There are a lot of challenges to scaling, including seeking funding needed to set up a scalable process.
Setting a culture that encourages scalability is also a massive challenge in scaling. Having a culture of independence where managers can work on their own, a culture of digital transformation etc.