Do you have the type of business that can grow? Here are a few questions to ask yourself.
- Are you a solopreneur or an entrepreneur? Solopreneurs prefer to concentrate on doing the actual work rather than on business development and have no desire to sell. If you’re a solopreneur, scaling your business will be much harder given the level of control you enjoy.
- Do you have good systems in place that can handle increased growth?
- Are you willing to tighten your belt and put your salary on hold while you ramp up?
- Are your employees willing to do one and a half jobs while you try to hire the right people?
- Do you have access to capital?
- Do you understand your market potential?
- Most importantly, is your business the type of business that can scale up? Can you leverage your product and/or service in such a way that it takes less in operating expenses to generate more and more sales?
What strategies can you use to scale your business up?
Partnerships open up the potential to bid on larger projects where margins might be better and/or consolidate sales efforts so less time is spent on business development. For example, a baker can partner with a retailer to resell her product or a nutritionist can partner with a psychologist to offer a complete wellness package. In each case, the partnership can generate more revenue than the individual services.
Create recurring revenue streams
One of the most popular forms is the subscription service. These companies can have high up-front costs but once they hit a certain critical mass, the profits are considerable. For example, a health food store could offer a monthly bundle of products delivered to your door, or a social media strategist could provide weekly activity reports and analysis. Advantages of recurring revenue streams include reduced customer acquisition costs and easier upselling.
Introduce new products to sell to existing customers
Banks are a great example of the type of company that has understood how to leverage the power of their customer network. Once you went to the bank to deposit and withdraw your money—now you can acquire services from car insurance to wealth management products.
Find new uses for excess capacity
Is the full-time web designer on your staff fully employed only 65 percent of the time? Contract out her services to other businesses to ensure 100 percent utilization. Do you have a studio that’s only used during the day? Identify alternative uses for downtime.
Develop new markets for your business
Companies often see their business as strictly local. When you take advantage of Internet apps such as Skype, products and services can often be sold globally. NLOWE has a full-time export consultant to help you identify ways to increase your sales.
Increase your price
Your price should be determined by the value you create for the customer and what the market will bear. Often there is room to increase your price when what you provide is of high benefit.
Instead of offering individual products or services, bundle them and offer packages to your clients to potentially increase the dollar volume spent per customer.
Technology can really boost your productivity gains. A CRM (Customer Relationship Manager) could improve your service and open up new opportunities. Point-of-purchase software (for example, Square or Apple Pay) can increase sales volume. E-commerce is an efficient, cost-effective way to reach new markets. And analytics software can help you customize your product/service and better meet your customers’ needs.
It’s important to look carefully at how to create those incremental gains without increasing your costs at a comparable rate. Once you’ve done the research, put on your climbing shoes and scale up!