By Frank B. Mengert, founder // CEO @ ebm.
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Are you looking to grow your business or scale it? In order to highlight the difference, an article by Harvard Business Review highlights the main difference: “Growth means adding revenue at the same pace you are adding resources; scaling means adding revenue at a much greater rate than cost.”
These days, it’s not easy to be an entrepreneur. So if you don’t want to become a statistic, ensure that you tap into these 10 ways to scale your business:
1. Create and follow a plan.
If you fail to plan, you plan to fail. The most successful businesses have a vision for growth and then reverse engineer the steps required to achieve each goal as part of their planning process. And then—most importantly—they follow their plan.
All too often, companies set goals at the beginning of the year, getting people excited and pumped up. But by March, hardly anyone is following a cohesive plan. Building various lengths of objectives will help keep you focused and aligned.
My company follows the entrepreneurial operating (EOS) system, where everything is broken down into “rocks,” which are the most important things we need to accomplish in the next 90 days. We also have a one-year plan, a three-year vision and our 10-year target; this last one being our North Star for our company and our employees.
It’s important to note that when creating your plan, you don’t aim so high that you can’t meet your targets, nor do you want to make things too easy that you don’t challenge yourself.
As you evaluate your methods to achieve your goals, if you find yourself saying: “it’s the way we’ve always done it,” this is a clear sign you need to revisit that process and innovate your plan.
2. Maintain focus.
As an entrepreneur, it’s easy to get distracted by shiny object syndrome or be tempted to offer many products and services. Instead, have a core focus and niche so you stay in your lane and deliver what’s promised to customers.
Determine what your key revenue drivers are and double down on those. And if you’re interested in launching a new product or service, test the market first to see if people want it and will actually pay for it. Too many companies spend money on R&D and marketing a new product or service only to find out it’s a failure because no one wants it; don’t let that happen to you.
3. Document your processes.
It’s tough to scale without established, documented organizational processes. To ensure everyone is working off the same page, develop KPIs and SOPs that break down the steps and strategies you follow as an organization and within your teams. Once documented, they are easily accessible by new hires or team members, reducing ramp-up time and training.
4. Have proper lead gen and marketing plans in place.
Without a healthy and growing pipeline, you won’t be able to scale. Inbound and outbound marketing is a must for brand awareness and new business growth. Work closely with your clients and use them as raving fans to attract more business. Asking them why they value your product so much and sharing this feedback is the perfect way to bring in new clients.
5. Be a squirrel when it comes to funds.
Yes, you’ll need to spend and invest in the business, but be intentional when you do and learn to save where you can. Do not buy things you don’t need that won’t directly correlate to a proven ROI for your business.
For example, you can be the CEO but don’t have to take a CEO salary; you should be the last person who gets paid and will often be the lowest-paid employee on your team at first.
In addition, don’t plan too far out or count on money you haven’t closed yet. Always work within the current operating income so you don’t overextend yourself. Finally, track your burn rate consistently so you know how much runway you have with your reserves.
6. Partner with financial professionals.
Managing our business’s finances is crucial to your ability to scale, so ensure you have a solid bookkeeper and CPA to lean on for counsel.
7. Invest in yourself.
Becoming a better leader and businessperson takes work, so don’t be afraid to invest in a coach. Do your homework and be clear about how and in which areas that coach can help. Also, consider joining a community like Young Entrepreneur Council (YEC), Young Presidents’ Organization (YPO) or Entrepreneurs’ Organization (EO), which can connect you with other entrepreneurs with similar scaling goals.
8. Strategically hire FTEs.
If you need to have FTEs, hire people who may cost more money but bring the skills to perform and immediately put speed on your side.
Most small businesses trying to scale make the mistake of trying to hire, train and onboard entry-level employees to save a few bucks, but they often end up spending more overall in the time it takes to achieve the same results with a more experienced hire.
Also, ensure all teammates have a number or metric you can measure them by. This way, their role is very clear and they know what success looks like.
9. Outsource when you can.
Not every position needs to be an employee. Consider hiring fractional CFOs, COOs or contract workers for positions or jobs that don’t have full-time work—or when client contracts may be short-term. This ensures you get an experienced professional aligned with your capacity.
10. Learn to delegate.
It’s tough to create and execute your vision if you’re in the weeds of your business. Learn to delegate so you can work on the business instead of in the business. Trusting the professionals you’ve hired to do their jobs will free up your time to focus on your number one goal: scaling your business.
Following these 10 principles can help you move from growing to scaling your business and avoid being a casualty of a challenging entrepreneurial climate.
