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You might think it’s all simple, building a business to sell at $30m. Well, not everything is hunkydory. There’s lots of work to be done. Scaling your business is a process of constantly removing constraints and adding new dimensions to generate more revenue, expand your reach and increase efficiency. We did it, and we know how to show people what to do. The process might seem intimidating but with some planning, strategy and execution, you can achieve it (I mean, I did).
This blog will give you insights into how small business entrepreneurs scale their business, remove obstacles and add new dimensions to generate more revenue, expand your reach and increase efficiency. Read on to see how anyone can, with the right attitude and support, scale their business!
What Does It Take to Scale Your Business?
To scale your business, you need to look at what is holding you back, identify the constraints and remove them to generate more revenue and expand your reach. At Vodien, our biggest constraint was systems that people were implementing. But this constraint is likely to be different depending on what industry or context you are in. Some of our clients have no problems with system implementation. Instead, they have challenges with leadership succession.
To effectively scale your business, you need to first be aware of the six key dimensions that drive revenue. This is so fundamental, it sometimes annoys me when these are not already laid out clearly.
- Product: The core of your business model is your product. This is what you sell, the business model and how you make the income.
- Customer: Your product is not the only source of revenue. Your customer also pays for your service and advice.
- Business model: How you deliver your product and how you earn the income.
- Demand: The level of demand in your market and how you influence it.
- Scale: How large of an operation you can and will handle.
- Sustainability: The long-term viability of the business model and how reliable it is.
Plan your scaling strategy
Before you can scale, you need to plan. Your plan should map out the strategies you will use to remove constraints and add new dimensions to drive revenue.
- Start with a business model analysis
Your model will help you identify the value your product brings to your customer and the amount of revenue you will generate. I’ve talked about business models in my book Super Scaling.
- Identify the channels you will use for distribution
Depending on your product, you might need a physical store, a website or a combination of both that reaches your target customer base. Many of our customers have not just learned about their channels, they forget that there are many other channels to use. This is what we often cover in our advisory segment.
- Determine the customer acquisition plan
In order to generate revenue, you must first acquire new customers. Your customer acquisition plan defines how you will reach out to customers and how much you will spend on acquiring them. Often, this entails the crafting of effective offers so that your customers are inclined to consume them.
- Establish metrics and key performance indicators
I can’t emphasize how important metrics are. Measure the wrong thing, and you end up in trouble. For instance, one of our clients was measuring revenue. If you’re not aware, there is a difference between a lead indicator (you can measure along the way and adjust your approach, such as number of proposals sent) versus a lag indicator (you can only measure at a fixed moment in time, often meaning it will be too late to adapt, such as customers acquired)
Create an execution plan aligned with your strategy
Your strategy map should at least have a view of your customer journey and the steps that will lead to their success. You can use tools like Trello boards to map these out. To map your customer journey or journey map (I also covered this in my book Super Scaling), you will need to set up customer journey maps for your product and service.
- Set up a customer journey map for your product.
This is the core of your business model. The main function of your product, its value and how it helps your customer.
- Set up a customer journey map for your service.
Here, you can map out how you will serve your customers, what they will experience and how they will benefit.
- Set up customer journey maps for the sales, marketing and support departments.
Each team member should map out the steps they will follow in order to help the customer or internal stakeholder whom they are serving.
Beyond the customer journey, you need to see if these actions and processes help to arrive at the eventual goal dictated by your strategy. To find out more about how we go about helping our Inner Circle clients clarify, define and simplify their strategy, contact us for a discussion.
Build a team capable of executing the plan
This step is key. You must ensure that your team is capable of executing your scaling strategies. When scaling your business, you will have to modify processes, roles and responsibilities and sometimes, people have to be let go. You must know how to execute these decisions without losing your business and being able to maintain the culture that makes your company special.
You will also have to adapt your hiring decision to meet the demand for scaling your business. Establish hiring parameters that you will adhere to when hiring for scaling your business. You will want to focus on hiring people who can help you scale, who are capable of executing your plans and who are ready to make the changes needed to scale their career.
- Establish hiring parameters
Your hiring parameters should define the skill sets you look for in your employees, the behaviors you expect from them and how you will measure their execution.
- Implement a performance review process
A performance review process should be part of your hiring and evaluation process. This process should define what constitutes good performance and how you will measure it.
- Hire for scaling
Note that you will have to change your hiring philosophy to hire for scaling. It’s not about saving money anymore. It’s about getting smart people in, and getting out of their way. You will want to hire people who are competent in their career and make adjustments to their job so that the business can scale.
- Measure and track performance
To be effective in executing your scaling plans, you need to measure and track the performance of your team.
- Be flexible with your hiring process
You will need to adapt your hiring process to hire people who are ready to scale their career and make adjustments to their job.