Have you got the freedom you imagined when you set out on your business journey? Or are you bogged down in the day-to-day running of the business and wondering what happened to your dreams?
What often happens to business owners is that they become indispensable. Customers want to deal with you, rather than your staff and you’re involved in the nuts and bolts of running your business. Perhaps you’re still your business’s best sales person as well as being the most knowledgeable person on the team?
Yet there is a way out of this. It may sound like you’ll be creating more work for yourself, but ultimately the way to get the freedom you desire is by scaling your business.
What does scaling mean?
Scaling up a business means your revenue increases while your operating costs do not increase at the same rate. This means you should be increasing your profits faster than your costs.
In contrast, many businesses grow without scaling. For example, in a professional services business such as an accountancy firm, every time a certain number of new clients come on board the company will need to employ another accountant to service the client. They are adding costs at the same rate they add revenue. Therefore, they are growing, but they are not scaling the business. It is more challenging to scale a services business than a product-based business.
How to scale up your business
When you scale a business, you need to start by looking at the way your business is run now. The truth is that if you have the wrong business model, then there’s no point scaling up a business. Get the right business model in place first.
Verne Harnish of the Gazelles says that the four pillars required to scale up a business are:
· The right strategy
· Finding and keeping the right people
· Executing the strategy
· Managing the cash
When you’re scaling a business you need to select a small number or products or services that are teachable, valuable and repeatable.
This is the opposite of what a lot of business owners do – they often broaden their range of products and services, making it difficult for anyone else to acquire all the knowledge needed to successfully deliver the products or services.
Scaling your business
In reality, the key to scaling your business is to sell less stuff to more people! The added benefit of this is that it makes your business more valuable, should you ever wish to sell it.
Business planning to scale up your business
Scaling up your business won’t happen without effective business planning. You need to know where you want to get to with your business and put a plan in place to get there.
An effective business strategy and business plan will help to ensure you are designing a business that can scale. It’s important to focus on long-term growth and scalability, rather than short-term profit.
To see how your business measures up right now you can use one of our business tools to get your Value Builder Score. Simply answer a few questions here. It only takes around 13 minutes to complete and gives you a chance to find out where your business is in terms of value.