To scale or not to scale? At some point, most businesses arrive at this fateful crossroads decision. In fact, Harvard Business Review tells us the precise point. It happens during the third of five stages of small business development—the success stage!
“The decision facing owners at this stage is whether to exploit the company’s accomplishments and expand or keep the company stable and profitable,” HBR notes. In other words, to focus on growth or not.
Growth is the goal for most small businesses. More sales, more profits, more market share. Who doesn’t want those and all the other benefits?
But growth is an investment and comes with risks. That’s why you’ve got to be strategic and thoughtful in your planning and implementation in order to reach Stage 4—Take-off!
Luckily, you’re not alone on this trip. We’ve developed a handy guide featuring plenty of DOs (and DON’Ts) to manage during your journey to even greater success!
Things to do:
Always do market research before expanding.
Congrats on reading up about how to grow your business! But before you go further, we suggest doing some homework about whether your business even has room to grow or not.
Some businesses operate in an overcrowded field. It may not be the right time to invest in growth. For example, if you provide products or services within a particular geographic area, and there are dozens of competitors offering similar things, it may be wise to wait.
The only way to know for sure is by conducting diligent market research first. There are plenty of agencies and freelancers who can support you in that endeavor and share insights into possible workaround strategies.
Develop a growth game plan and stick to it.
There are many reasons why most businesses fail. One is that they don’t stick to their own game plans.
Yes, it’s exciting to generate ideas and craft a growth strategy that looks sweet on paper. And you might continue to feel pumped up during the initial implementation stages of said plan. But over time, when the thrill is gone, many businesses run out of steam and quit before they start seeing results.
If you come up with a solid, feasible plan of action, don’t give up on it. Tweak it along the way, if needed, but see it through long enough for it to have a chance.
As Confucius said, “It does not matter how slowly you go as long as you do not stop.”
Invest in marketing and advertising.
The world’s best deal won’t attract customers if they don’t know about it. Your business can only grow by raising awareness and interest, then igniting desire…and spurring ACTION! (Yes, it’s the old A.I.D.A. model made famous in Glengarry Glen Ross).
To generate the above, you’ll need top-shelf marketing and advertising. What’s the difference? The American Marketing Association explains it this way:
“Marketing is the process of identifying customer needs and determining how best to meet those needs. In contrast, advertising is the exercise of promoting a company and its products or services through paid channels.”
Both are complex processes, and most business owners aren’t experienced with either. That’s why we suggest hiring experts who can handle your marketing and ads.
Build a strong team.
They say a team is only as strong as its weakest link. That may sound kinda mean, but as a business owner, you’ve got to objectively assess each of your team member’s strengths and areas for improvement.
All too often, businesses hire the best people they can afford for some roles, then try to save on areas they deem less important. That makes sense. But remember—some of the most valuable players are the ones in your customer-facing roles.
Receptionists, customer service representatives, salespeople. Anyone else working directly with your customers (or potential customers) is a critical member of your team, worthy of investing heavily in.
That said…if you don’t currently have the resources for that, have no fear! At Ruby, we provide businesses with highly-trained, vetted professionals who integrate virtually with any team.
With our trained and friendly virtual receptionists, you’ll have 24/7, 365 coverage—without the hassle and expense of an in-house, full-time employee!
Maintain good relationships with customers and suppliers.
Tying into the above, customer relationship management is crucial for growth. So is maintaining relations with the suppliers who are essential to your operation.
Take the time to show them that your business genuinely values and appreciates these relationships. Reach out for occasional feedback. Ask them what they’re liking, loving, or are not 100% satisfied with. Commit to surpassing their expectations and providing only outstanding customer experiences!
Things to avoid:
Expanding too fast
It happens all the time—businesses bite off WAY more than they can chew and can’t keep up with the hectic pace. Maybe they don’t have the infrastructure or enough trained personnel.
The reasons are myriad, but the solution is always the same. Take enough time to plan things out so that your growth is orderly and predictable. Customers have enough stress. They hate seeing a business that’s in disarray.
Neglecting current customers to chase new ones
Perhaps there is no bigger red flag to customers than to notice a dropoff in customer service. It can take years to build a trusting relationship with a customer but only seconds to destroy it. And remember, “acquiring a new customer can cost five to seven times more than retaining an old one.”
Cutting corners on quality to save money
Okay, this one sends up a pretty huge red flag, too. When a customer gets used to a certain level of product or service quality, they pick up pretty fast when that quality dips.
They may forgive a one-time slip. But if the quality is constantly poorer than before (because the business is cutting corners to save money), it won’t take long for customers to start looking elsewhere.
Some businesses are better able to hide their cost-saving efforts than others. For instance, restaurants are especially susceptible to customers realizing when ingredients aren’t up to par.
If you have to get costs under control, look for ways that won’t attract attention. Like outsourcing your receptionist and live chat tasks to us!
Ignoring financial management
As Forbes points out, “Sound financial management helps minimize risk, maximize profits, enhance decision-making capabilities, create financial independence, provide assets for emergencies, and drive long-term sustainable growth.”
Wow, it pretty much sounds like financial management is the keystone to business success!
Losing sight of the company’s values and mission
Does your business have a clear mission statement and an established set of values? If not, why not?
Savvy business owners understand that, to get where they want to go, they have to know where they want to go. That requires writing out an explicit mission statement.
By the same token, every business needs to recognize its own values and be able to reflect those in its actions. This, in turn, will attract like-minded customers!