4 Questions to Ask Yourself Before Scaling Your Small Business
If you’ve had the pleasure of experiencing great success with your small business, you’ve probably asked yourself these questions a few times: am I able to scale up now? When should I expand my services? Is it time to hire someone?
Scaling usually means increased profits, but along with this comes greater responsibility and risk, the likes of which could shut you down for good if something drastic were to happen. So, with that type of consequence, it’s important to look at the facts and do your numbers without bias. Part of this includes checking industry and economy trends, but the other part includes looking at yourself and asking the following questions to ensure you’re looking in the right direction for your future.
Is it really time?
You’re probably asking this question already, but the answer should consider these factors:
- Is the profit I’m making now sustainable? Is my product or service needed for the long-term or am I profiting off a passing trend?
- Is my product or service appealing to just the niche of people I’ve reached, or is there real potential (not just assumed potential) for gaining clients outside this small group?
- Will this extended appeal last over the long term as well?
- Is this what I want for me? I’m loving life right now; what are the things I love about this business? It’s ok to take a step back and make sure you won’t lose those things by scaling too fast.
Have you made it this far by yourself, with maybe just your accountant/tax planner? If you scale, chances are you’ll be needing more help, and it is so incredibly important to have the right people, people who are as passionate about your business as you are. It’s not always just about skills either – chemistry is important for anything to thrive. Make sure you can get along well with these people!
“Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people. The management team” – Book Good to Great by James Collins
How are your finances?
Not only will you be needing more people, you’ll likely need additional working capital to pay those people and pay for other expenses that come up. In other words, your finances need to be solid, dependable. It wouldn’t be good to bet your whole future on guesstimated future profits.
If you don’t have quite the amount of cash that you need to grow, there are ways around this. Loans from friends, family, banks, or alternative lending are great options. Potentially a venture capitalist might be willing to invest if you know how to network. Find these people and set up a meeting to pitch your ideas. Find out what they’ve funded in the past to see what they like, and where their experience lies. Even if it doesn’t go your way, you’ll most certainly learn a great deal and even learn of some other valuable contacts.
What’s your plan?
As you grow, the inner workings of your business will become more complex, which is one more reason why having the right people around is important. But, having an organized plan of action is important as well, to ensure you’re giving those people the right work, and that you have a growth plan that is truly strategic and not just “winging it”. Do you have tools that help automate some processes, or at the very least keep everyone organized and on the same page?
When you’re ready to scale your business with a solid plan and team, Worldwide Capital Management is here to be your financial partner so you can scale with confidence.
Fill out our simple form to see how much you or your business qualifies for.