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Expanding or scaling your business is a task you both look forward to and fear. On the one hand, expanding your company is a positive step as it shows you’re moving in the right direction. On the other hand, you’re worried about spending too much money and not getting beneficial results.
It’s possible to douse those fear fires if you understand the sensible way of expanding a business. Now, no two companies are the same, but here are some general tips to help you scale your business in the most sensible way possible.
Before spending any money, pinpoint one element of your business that can grow and expand. This could be your team, your product range, your stock capacity or even your target audience. Look at your business and choose something that you believe will help your company make more money in the future. For a lot of small businesses – and this is a generalisation – the first expansion usually involves growing your team. You reach a point where there’s a huge demand for what you offer, yet you lack the ability to handle all the customers. So, growing your team lets you take on more customers every day, meaning you make more money.
After you’ve focused on one area of growth, you need to figure out the most cost-effective way to implement any changes.
For instance, let’s say you wish to grow your team. What’s the most affordable way of doing this? Outsourcing makes a lot of sense in some cases – particularly if you don’t need an on-site team. It’s far cheaper than hiring lots of on-site staff.
Or, what if your area of expansion is to increase the stock you sell? Until now, you’ve been operating out of your garage, keeping all the stock there. It’s selling out too fast, meaning you’re missing out on more sales. You could rent a warehouse, but that’s expensive and has long-term costs. An alternative is to find a design and construct company that will build a small commercial structure for you. It’ll be bigger than your garage, meaning you can stock more items and make more sales without the additional warehouse costs.
It’s super critical to measure your success after implementing your new expansion model. Pick some key performance indicators – like sales figures, leads, customer retention, etc. Then, measure these KPIs after you’ve made the change. See if it’s having a positive impact or not.
If the change doesn’t show improvements after a few months, don’t try to implement another expansion. Look at the current one and figure out the problem. Only move on to another expansion when your current one is successful. This avoids situations where you’re throwing money at loads of different ideas that aren’t delivering results.
The sensible approach to expanding your small business is to take things step by step. Focus on one thing that can be improved, work on implementing it as cost-effectively as possible and then measure its success. Follow this model and you should see fewer issues when trying to grow.
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