So you’ve made the decision to scale your remote business – congratulations! Now it’s time to prepare for new challenges and experiences.
It’s an exciting feeling to be scaling up, isn’t it?
However, to make your success sustainable, put effective systems and processes in place and keep a tight rein on your cash flow and operations, you need to scale with care and precision.
For example, you need to know exactly when it’s the right moment to scale up (as premature scaling is a ruthless startup killer affecting all internal processes and workflow).
To help you out, I’ve put together a list of three simple steps to take before scaling to make sure you understand the common scaling challenges and make your scaling efforts wildly successful.
Table of contents:
- Growth vs. scaling up: What’s the difference and why does it matter?
- How to scale your remote business in 3 simple steps
1. Growth Vs. Scaling Up: What’s The Difference And Why Does It Matter?
Way too often, business owners toss around “growth” and “scale up” interchangeably in conversation – after all, both growth and scaling refer to an increase in size.
However, there are several key differences between growing and scaling up your business, and understanding them will allow you to scale carefully and build the strongest possible team.
Rushing to scale before having a clear understanding of the differences between growth and scaling can be pretty darn dangerous – especially if you do not have passive revenue streams to help you out.
While scaling means adding revenue exponentially compared to expenses, business growth is focused on increasing revenues by increasing expenses in order to expand the current assets (e.g., more employees or greater product capabilities).
Therefore, the key difference between growth and scaling is the ratio between revenue and expenses.
It’s not necessarily the case that growing your business and increasing expenses is bad. It’s just that it’s a natural process that every company goes through from the very beginning of the business lifecycle – under favourable conditions.
At the same time, scaling is associated with exponential growth that every investor is dreaming about. You can think of scaling as the hockey stock graph characterised by a sharp increase after a flat period.
Typically, the decision as to whether to grow or scale comes down to the goals you’ve set for your business (e.g., revenue growth, geographic expansion, make happy customers even happier, etc.).
What’s important for you is that you understand why you have chosen one approach over the other and what are the best practices and strategies to make it happen.
2. How To Scale Your Remote Business In 3 Simple Steps
Here are three simple steps you need to take before scaling your business so you can generate higher revenues without ramping up costs:
- Avoid cash shortfalls
The first question you should ask yourself before scaling up is, “How can I ensure I have enough cash to execute my plans and accommodate changes?”
The main sources of cash available to small businesses looking to scale up are the business owner’s own money, investment from business partners, friends and family, and external shareholders such as venture capitalist funds (VC).
Whatever funding option you choose, it’s essential to cut unnecessary expenses and keep operating costs low, such as the costs associated with overhead – one of the largest expenses businesses contend with.
Can you reduce your direct costs to increase gross margins? If so, you are able to mitigate risks and pitfalls and scale for success.
As a remote business owner, the greatest way to significantly reduce costs and avoid cash shortfalls is to get a cost-effective virtual office – a modern and flexible office that sets businesses up for success without the cost and headache of keeping an actual physical office.
- Build new skills
Scaling up and crossing the chasm requires you to develop new skills so you can lead by example.
As a business owner, you’re used to wearing many hats from the very beginning of your entrepreneurial journey, but mastering new skills is critical to make your scaling efforts successful.
The skills below will determine whether or not your scaling efforts will lead to exponential growth and greater levels of success:
- Rebooting the organisation: Most small businesses have informal organisations and operate without specific guidelines, regulations, and chain-of-command. As a result, they have the ability to pivot when navigating challenges to ensure business continuity. Scaling up, however, requires you to formalise the organisational structure by clearly specifying procedures, rules, and responsibilities for each team member.
- Creating a market: As a startup business owner, you have already identified your target audience and customer needs. Now it’s time to plan and prepare the process of iterating products (make changes to the product based on customer feedback) and determine product-market fit in your industry. Always remember that the secret sauce of successful scaling is reaching the right customers.
- Bringing the right people on board: “No man is an island,” and this is even more true in the case of business owners scaling their businesses. You can’t scale your business alone. To avoid bottlenecks and optimise workflow, you need a talented and highly motivated team. Do not hire just anyone who can get the work done. You need to learn instead how to recruit and hire top talent for your remote business and create a winning workplace culture.
3. Standardise processes
If your processes aren’t standardised during the scaling phase, you’re inviting chaos.
Every task you and your team are performing requires rules and methods to be followed.
Standardisation can be applied to any process and task that is relevant to your business, such as accounting and payroll, inventory management, appointment scheduling, task management, customer service, etc.
No, let’s go back to the first step you need to take when scaling your business (“avoid cash shortfalls”). Do you remember what I told you about virtual offices? A virtual office will not only help you significantly reduce overhead to overcome cash constraints, but it will also help you standardise your customer service procedures by providing you with a professional virtual receptionist.
A virtual receptionist is a cost-effective phone answering service designed to deliver a great customer service experience and help you and your team save time and focus on more important operations.
When done well, standardisation improves quality, boosts employee morale, decreases ambiguity and guesswork, and makes your scaling process much smoother.
Conclusion: The concept of scaling a business is often used interchangeably with growing a business, but these are two different processes.
Understanding the differences between them is critical for a successful scale-up as it helps you avoid hitting a rough patch.
When we talk about scaling a business, we’re referring to strategies for growth without incurring significant expenses.
Scaling your business requires funding and the right systems, team members, and process. Apply the simple tips I shared in this post, and you’ll soon be well on your way to scaling up your business and reach greater levels of success!
Want to eliminate barriers to scaling up? B2B HQ would be glad to provide you with a cost-effective virtual office and help your business scale up with no downtime and reach its full potential. For further details, do not hesitate to contact us. We would be happy to hear from you!