Growing and Scaling Your Business – What You Need to Know
Growing and scaling your business should not be a mystery. However, it’s essential to understand that the language can be confusing. While growing your business and scaling your business are very similar, they are not the same thing. Let me explain.
Consider this concept – growing your business is like climbing stairs. You go up gradually bit by bit, and each step is like adding in new resources to help you achieve that growth. Those resources could be hiring people, implementing new systems and technology, or even getting finance and capital to help you achieve that growth. As a result, your revenue also increases – that’s growth.
On the other hand, scaling is like someone installing a stairlift or an elevator in the building, but for little to no cost. It’s where your revenue increases without investing or substantially increasing your resources, and that is the difference between growing and scaling your business.
Success takes time and dedication
Here are some of the most common reasons that businesses fail:
- 20% of businesses fail due to the products/services they offer.
- 14% fail because they do not listen to their customer’s needs
- 29% fail due to poor cash management
- 13% fail due to management’s ability
Let’s delve a little deeper into these common causes of business failure
One of the main reasons that businesses fail, not just in the first year but beyond that, is down to the products. The issues can be the products not being suitable for the market or not viable in the current climate. It’s also imperative to ensure that the product is still something the customers want.
Listening to your customers’ needs is exactly what customer experience is all about, and failing to do so can be detrimental to your business. Without paying attention to your customer’s needs and experience, you will struggle to determine how satisfied your clients are. When customers are neither your cheerleaders nor die-hard fans, when they’re simply satisfied, you risk losing them to your competition. They may move to your competition because they can get something similar to your services, but the experience is better, or possibly the price is lower.
Nearly 29% of businesses fail due to cash flow and finances. Any business starved of cash is going to struggle massively. It is akin to having an anchor attached to you while swimming in the sea. No matter how hard you try, it will drag you under.
Many businesses fail because of the people – the management, the team, the stakeholders, or the investors. Often, relationships break down across those areas due to communication or lack thereof, hurting the business.
Laying the foundations for success
Before scaling your business, ensure that you have the foundations laid down right. I mean that it is vital first to consider whether you can handle an increase in the amount of work that’s going to come in. Those additional sales that will come through, accompanied by increased customer requests, will require resources. You need to be able to handle that in a cost-effective way that won’t impact your customers, employees, or other team members.
Even then, there are other things to consider, for example:
Think about your leadership abilities – You will have to adjust your customer experience strategy to cater to your new customer experiences without damaging your brand, your marketing plan, and the message you’re sharing with your audience, colleagues, and stakeholders. Because essentially, people don’t buy the best products or services. They buy the ones that you can communicate the most clearly.
What is your sales cycle going to look like? Who are you going to sell to? As for the products or services you offer – what is the unique selling point of those products, and how viable they are in the market?
Perhaps the most critical factor to consider – is managing your cash flow, managing your overheads how you’re going to achieve the success you desire without impacting other business areas.
You must continuously seek to serve, add value, find ways to surprise and delight your customers to grow a business full of your ideal customers who become loyal to you, who are cheerleaders and raving fans of your business.
Even taking everything above into account, you will still need a blueprint. You will still need a guide, a mentor, or a leader to help you through that transition and transformation in your business and a massive amount of grit, determination, and energy to achieve the success and scale you’re dreaming of.
How do you know when it’s time to scale?
Here are some of the metrics that I would urge you to consider as you think about growing and scaling your business. To take your business to the next level:
- Have a look at your customer acquisition costs.
- What is it costing you to onboard or get a new customer?
- What is your customer’s lifetime value?
- What is your growth rate?
- What is your conversion rate?
- What is the cost of goods sold?
When you’ve got those metrics to a level where you’re happy, it’s time to look at scaling.
Whether you’re ready to scale or not, you can still use these metrics to help you put you on a growth trajectory to scale in the future.
The difference between success and results
These factors boil down to one crucial question you need to consider as a business owner. When you achieve your growth goals and scale your business to the level you dream of, what does the ultimate vision of success look like? Are you envisaging yourself taking a yacht and cruising around the world? Or are you planning on having a trip on one of Elon Musk’s rockets and going to the moon? Is it spending more time with friends family or giving back to your community? What is your vision of success?
This vision does not necessarily have to do with your business. Think about it this way: Your business might be your passion. You might love what you do. You might love the people you help, and ultimately, your business fuels your life. When this is the case, and your business mission, purpose, vision, and values are aligned to your personal values, you’re going to get enormous job satisfaction from your work.
Having a million in your bank account, or $5 million, or $10 million is not what success looks like. You might disagree, so think of it this way. Results and success are not the same things. Success is what those millions allow you to do and what it means to you to be able to do those things. It could mean financial freedom, or it could mean more time with your family. It’s the things that you personally value that are separate from your business values. And so, this is what you need to think about when it comes to mindset.
It’s essential that you can distinguish between the results that you’re aiming for and what success looks like. Because growth may be enough for you, you may not need to scale your business to achieve your desired results and success. And if you push too hard too soon, that could be the thing that results in failure.
So, pause and factor in your mindset before you decide to scale. Factor what’s more important to you – results or success?
Mastering the skills needed for scaling your business
If you’re serious about scaling your business or growing your business and taking things to the next level, there are some skills that you need to master. I appreciate that not everybody is in a position to go out and pay somebody to help them, but they might like to consider doing some research or getting some support to help themselves to move forward.
The skills that I think are most important to help you be able to achieve that success are as follows:
- leadership skills
- managing your finances effectively
- looking at customer experience strategy
- marketing your product creation
- Increasing your sales.
With that said, I’d like to mention a couple of books that I’ve read and would recommend to anybody interested in growing or scaling their business.
The first one is The Grid by Matt Watkinson. Play Bigger, by Al Ramadan, Dave Peterson and Christopher Lochhead is a fantastic resource. Business Made Simple by Donald Miller. Donald is one of my all-time business heroes. I also recommend another of his books, Marketing Made Simple, co-authored by Dr JJ Peterson.
If your mindset is blocking you, a fantastic book to help you move forward is Think and Grow Rich by Napoleon Hill. Start with Why by Simon Sinek and Drive by Dan Pink will help you determine what your intrinsic motivators are and whether you are looking at results instead of success.
If that vision of success is what’s driving you, or perhaps it’s because you’re trying to avoid something from happening, those two books will tell you how to do that more effectively.
And of course, in business to move forward, you need to consider, how to measure what matters. John Doerr has done a fantastic breakdown of how to do exactly that in his book. And one final one is The Leader in You by Dale Carnegie. If you’re interested in reading some business books to help you progress, any of these would make for a great read.
This month, I’m going to be hosting a workshop – 6 Steps To Scale Successfully – to help you master these secrets to business success and more. If that’s something you’re interested in, register here.