Scale up, what does it mean?
You’ve started making sales, revenue is hitting your bank, your target market is responding well, your marketing is a hit! It’s coming towards the end of year one and things are going well. The team gets together – there’s a lot of back slapping and congratulations – job well done!
But where do you go from here? This is where you scale up.
Scaling Up
Firstly, it’s taking what you are already doing and growing it strongly (so same product(s) in the same market but strong organic growth). This is driven by consumer enthusiasm for what you’re doing or selling, but fuelled by your marketing and communications campaign.
What will happen, if you don’t plan for it, is problems with manufacturing, supply chain, logistics, service, after sales, warranty etc. An explosion in sales growth creates pinch points in the organisation. A good company anticipates this problem, delegates authority to new employees to deliver solutions and invests wisely in the right structure.
But this is only the first phase.
New Markets
You need to consider new geographical markets – where can you take your product or service next – think about culture, languages, strategic alliances etc. How do you break into new geographical territories?
Then consider whether there are new products or services you can launch that sit well alongside whatever it is you’re doing – the same customers are now buying more than one thing from you – they’re buying several = extra revenue from the same delivery / client.
And finally, can the product or service you’ve created also be sold into different sectors?
For example, you were selling to chicken farms, but could you also sell to cattle farms?
All of this is Scale up – and all of it generates additional volume and value beyond the core activity you were doing in year one. You’re building a success story.
But you need to plan and control this growth if you want to avoid it back firing.
- Grow too quickly and you will not have the funding or resources in place to manage the excitement you are creating.
- Build teams ahead of when you need them, so they are in place and trained before they are required.
- Consider external third parties to provide services – independent call centres can do an amazing job these days, linking directly into the CRM system you’re using to monitor client interaction with your company.
This makes the cost variable rather than fixed and provides you with huge flexibility.
Changes to the Supply Chain
If you’re making something, then think about decentralised manufacturing close to the customer / consumer (but ensure good quality). Always know the capacity your supplier can give you and provide them with advance warning of a substantial step up in your needs. If you’re shipping, make sure there is sufficient capacity as your volume increases – this must be planned well in advance.
Find and Train the Right Staff
Finding the right staff, training them well, ensuring a good cultural fit and getting them early enough to meet demand will be critical to your success. Pretty quickly, staff become your most valuable asset and your biggest nightmare – treat them well, reward them appropriately (consider equity) and put structures in place that ensure equality, fair treatment, honesty and the right cultural values you want to establish……
Additional Funding
This growth, possible exponential, will require additional funding – make sure you talk to investors about how much you need for each of the phases before they happen so funding is available for things like: language in software; stock with local labels; customer support, properly trained in the language required; local regulations and packaging; certification; extra logistics costs etc.
This is all part of Scaling the business.
As always, we are just a few clicks away if you need our help to scale up your business, or anything else for that matter!