Did you know, according to Government-backed research, the number of SMEs has grown by a whopping 2 million since the year 2000? That’s an increase of 59%!
Different circumstances over the last decade have contributed to the skyrocketing of small businesses. From the Furlough government scheme to redundancies, many workers attempted to supplement their wages with side ventures and small businesses. This, coupled with the public’s mindset of supporting and shopping small, has meant that small business offerings are vast. Each with its own special niche and USP.
So, if you are one of these small businesses looking to scale up your offering and grow, we can help. To get started on your journey, we have gathered all the essential tips and advice you need to scale your small business and take that next step forward.
5 Tips to Scale your Small Business
Are you ready to grow your small business but unsure where to start or what it takes? Here are five actionable steps you can take when trying to implement growth in your business strategy.
1. Make a Business Plan
The first step in scaling a small business is to make an actionable plan with realistic goals. This could be anything from a one-year to a ten-year plan, depending on your vision and how fast you want to get there, but it must be realistic to see results. Business plans are essential if you want to secure a loan, but they can also help you define a clear vision and path for success, which you can share with the wider team, shareholders and more.
Goals in your plan should be measurable, i.e. increasing your revenue by 20% or £1000, for example. Don’t worry if you do not already have a detailed or formal business plan in place. Many micro businesses do not launch with this information. It is a productive exercise to put it together when you are ready to scale and understand your goals.
What is a Business Plan?
It might seem obvious, but taking the time to learn what goes into a business plan ensures you cover all bases. We have put together a simple checklist you can use when putting together your business plan so you can get started right away. When making your business plan document, you should include:
- A description of the business: Essentially, what the business is and its products or services
- How the business earns money, or how it will earn money in the future
- The leadership and staffing structure
- An operations model
- The financial backing
2. Invest in Technology
Investing in technology is an essential step in scaling your business to improve your service offering and meet the demand that growth brings with it. This means assessing your technology and software systems and identifying ways to update these. Can you look at areas to implement automation? It can improve efficiency for repetitive admin tasks without hiring more staff.
You also need to implement technology that will grow with your business rather than hinder your efforts for growth. Asset finance can help you acquire the necessary equipment and technology and spread the cost.
Take time to research and speak to industry experts about the types of technology that may be the best choice for your business. Making the right decision is an investment that can help you save money over time. It helps by eliminating the need to hire additional staff in certain areas or replace tech that might fall behind on the market.
3. Building a Great Team
Scaling your business will inevitably require more hands and minds to keep up and meet the demand of your growing customer base. As well as keep processes running smoothly without affecting the quality of your business offering. So, you will need to consider when is the right time to expand your team and how fast you should do it. It might be tempting to hire as fast as possible and capitalise on any success you have already achieved. Still, you should take the time to hire new starters that fit your team dynamics.
Building a great team sometimes means the difference between the failure and success of your business growth. It also contributes to you protecting your business values. Look for team members who believe in your business vision as passionately as you do.
Don’t be afraid to focus on the bigger picture regarding the day-to-day running of your business. This means delegating responsibilities and tasks to the team that may have previously been a part of your role. Having built a team you trust, there should be no issue with shifting your focus to concentrate on growth. This could mean allowing other senior team members to handle the tasks that have already brought success to your business. Similarly, you should seek the help and expertise of others when necessary. Allowing you to focus on your role as a leader and evaluate whether you have what it takes to scale your business.
If you cannot hire just yet, outsourcing might be a great way to get the ball rolling. To sustainably scale your business and secure long-term success, outsourcing may provide an extra set of hands to keep efficiency up and not overwork your team. While bridging the gap between needing help and having the work available for another full-time staff member, you can outsource work to freelancers, factories and other industry professionals.
When outsourcing work, you must research potential partners to find a third party that can efficiently produce the services and product quality you expect. In the meantime, this is a much more cost-effective way of scaling your business. Attempting to replicate internal procedures that third-party agencies may do better is a lengthy and costly task.
4. Implement Efficient Processes
The moment you think it’s time to begin scaling your small business likely comes on the back of success and opportunity. This success will come as your current processes work to deliver your products or services to a good standard. However, your processes and systems, as they stand today, may fail when you strive for change and growth.
In order to scale, you must perfect your processes. This means being adaptable and flexible to think outside the box regarding what has worked in the past. Take time to experiment and trial new processes and systems that will improve efficiency for your business as it expands. Do not make the mistake of ‘not fixing what’s not broken’, as you may not notice the cracks in your current process system until it is too late.
Expanding your business is the ultimate test for your processes and systems. Can they meet demand and continue to deliver optimal and efficient results?
5. Seek a Business Mentor
If you’re doing everything right and are unsure why your business isn’t scaling, perhaps it’s time to seek the advice of a business mentor. Having an expert’s opinion formulated on experience can open your eyes to various challenges, issues or opportunities you may not have considered. The role of a business mentor is to identify gaps in your strategy and pitfalls you might be missing. You can find advice from a business mentor through online professional networking sites, like LinkedIn, or even industry-specific networking events you can attend in person.
Need Financial Advice?
With growth comes change, and while you can prepare for it, there is one major asset you should protect during this period. That is your business values and what makes you and your team passionate about your work. The success of any good business depends on safeguarding business values as they have enabled you to succeed up to your current position. Do not lose these and risk your business failing in a quest for growth.
When it comes to growing a business, no matter how small, finance often plays a large role in taking your team to the next level.
At Portman Asset Finance, we can advise on asset finance, business loans and start-up loans and can provide you with a solution to your scaling issues. Learn more about us today and get in touch for more advice on scaling your SME.
Scaling your Business FAQs
You can find more advice and guidance in our FAQs if you’re unsure if now is the right time to scale your small business. We have pulled together some of the most frequently asked questions regarding scaling your business and what it means to be a small business to help you.
What is a Small Business?
Are you classed as a small business? The first step in scaling your business is understanding what size it is classed as so you know how to reach the next steps.
If you are a small business, you typically employ less than 50 employees; even smaller than this is the ‘micro business’, which employs a team of ten or fewer. A micro business can also include freelancers and solopreneurs.
So, while different from each other, both business sizes fall under the same umbrella of an SME, which stands for Small and Medium Enterprises.
What is the Difference Between Business Growth and Scalability?
Growing and scaling your business deal with an increase in the size and revenue of your business, and often the terms are used interchangeably. However, there is one key difference.
Business growth is more general and means increasing your customers, employees, offices, or business revenue. However, if not achieved while scaling your business, your growth will be unsustainable.
Scalability is the focus on growing revenue and increasing profit margins. This is achieved by increasing efficiency through the steps outlined in this article. As a result of a scalable business, you can increase your customer base and their satisfaction while enjoying a healthy increase in gross profit.
When Does a Small Business Become a Medium Business?
Since 2000, the number of SME employers has grown by 30%, indicating that more small businesses are hiring staff members. But scaling is not just about having larger teams. If you’re unsure what an SME must achieve to ‘graduate’ to the next business classification bracket, you can find a basic threshold below.
- Microbusinesses typically have an annual turnover of under £ 2 million.
- Small businesses have an annual turnover of under £ 10 million.
- Medium-sized businesses have an annual turnover of under £ 50 million and less than 250 employees.