The Components of Scaling
The entire month of September we are going to focus on the components of scaling a business.
You might think growing and expanding your business is the same as scaling, but there is one key difference. When you are growing a business, you are also putting out a lot of money. You are hiring, training, buying equipment and software, adding new locations, creating marketing material, etc.
When you are scaling a business, the revenue is coming in at a lot faster pace than the expenses are going out. You are playing in a new field.
To scale is to bring in a higher revenue, with strategically investing, yet not increasing your overhead, as much as when you are in the early stages of growth.
Why do you want to scale?
I see three main areas with my own clients and those I have worked with over the years.
Scaling so they can expand operations (locations, services, customers, leadership, etc.)
Scaling so they can eventually sell the business
Scaling because they are ready to retire and pass on their book of business
No matter which category you might fall into, the first step in scaling is preparing your financial strategy.
If you know me, you know I schedule Money Mondays and Financial Fridays. I start and end my week reviewing my numbers and data. If you don’t have a weekly practice in place, institute one ASAP.
Review your overhead, your budget, your projections, your billing and receivable processes, etc. You have to know your numbers inside and out before you can make those numbers work for you.
How do you scale your company? Is there a focus on sales and looking at the processes that have worked for your business in increasing your sales? Are you looking to lower your costs? Is it increasing your team and looking at new hires? Is it shifts in your current pricing? Is it a different process? Is it a collaboration, a merger, an acquisition?
As I often say, make a plan, take action - and do that over and over again. Consistency is a huge part of scaling. Once you set your goals, keep moving until you reach it, or reach a version of it, and then make a new plan.
Next week in my video, I am going to talk specifically about what to look at as far as your team and scaling. Training, promotions, leaders in new roles - if your team is set up for success, it sets the business up for success, as well.
I love this quote from Zig Ziglar, “You don’t build a business, you build people, then people build the business.”