Best Practices: How to Start Scaling Your Business Successfully
Building a successful and sustainable business from the ground up is every entrepreneur’s dream. Scaling your business, however, is very different than creating a sustainable business. Is it the right decision for you?
Scaling doesn’t just mean making more money. It also includes more responsibility, more employees, and potentially more work. If scaling your business is your goal, what steps are necessary to help you get there?
In this edition of our 4-part series with Shabir Ladha, partner at KBH Chartered Accountants, we cover the basics of what you need in order to scale your business so you know the answers to those questions.
Watch our Facebook Live video to get all the details, or read this short recap of the conversation. We’ll cover:
- What scaling your business means
- What you need to consider before deciding to scale
- What tools you need in place to scale
Watch Moly and Shabir talk about scaling your home service business in our latest Facebook Live video!
What does scaling your business mean?
Scaling means growing, which is a good thing to most people. However, there is more to it than just “growing” or making money.
“Scaling means growing your business operations so you can take on more work and add revenue at a faster rate,” explains Shabir. This can influence your business in size, revenue, staff, and locations. Any business can scale, whether yours is an owner-operator model, or a $500,000+ revenue business.
What do you need to consider before deciding to scale?
“Growth, or scaling, for the sake of doing it doesn’t necessarily work if you don’t have a purpose in mind,” Shabir explains.
If you want to scale, then there needs to be a good reason for it. It can’t just be for fun, or just to be larger.
Because scaling your business entails a lot of additional responsibilities, costs, and time that require significant attention.
Consider the following:
- Scaling a business can help you make more money, but there are costs that come with scaling. Hiring staff, buying software, higher overhead costs, and rent for a new location are all considerations.
- You will inevitably take on more work: either administrative work, training employees, or working in the field. You need to think about how you plan on handling the extra work.
- You might have to hire more employees or contractors to take on some components of the business. That means that you’ll have to take on a quality control role to avoid dips in business performance and customer satisfaction.
- As you scale your business, you might have to focus on a specific area of your business. Have you considered whether or not you will still do the things you love when your business grows? Or will you have to take on new tasks in order to accommodate that growth.
Shabir explains that one of his clients who is a Plumbing solopreneur grew his business so effectively that he had to hire more plumbers to take on the work. As the team grew, he moved from working in the field to managing operations from the office.
“Over time it got to be so busy that he didn’t have time to go out on calls, he only had time to manage his people and he wasn’t doing what he enjoyed like customer facing stuff and repairs.”
“He didn’t realize that happened until it was almost too late. He scaled too much and lost the love for what he was doing. He decided to cut back and be out in the field more. He ended up making a little less money, but enjoyed day to day much more.”
It’s important to acknowledge that some solopreneurs avoid growth because they don’t want to deal with headaches or tasks they dislike that come with owning a larger business.
Others might end up hiring someone who will handle those tasks so they don’t have to do it themselves.
Why scale your business?
There are a lot of fantastic reasons to scale your business. For example:
- Growing your team can allow you to offer more (and potentially better) services, or have more expertise in specific areas. If your clients love your lawn care services and would like you to do tree care for them, then you can scale by hiring an arborist, for example.
- There might be increased demand for your services, so you need to offer more service availability or volume.
- For example, some local builders recognize that you’re the best framing carpenter in town, so more and more builders come to you with sub-contracts. Scaling up by hiring more carpenters for your team and teaching them your method could allow you to do more.
- Maybe you have profit goals that you want to meet, but you can’t pull in enough revenue as a solopreneur because you’re simply too busy to take on more work. For example, if you could hire someone to take on your administrative tasks, you’d save 20 hours a month, that you could allocate to working in the field.
What tools, processes, and systems you need in place to scale?
The most important systems to set up when you decide to start scaling include bookkeeping software and business operations software.
Shabir recommends using online bookkeeping software like QuickBooks Online or Sage, and Field Service Management Software like Jobber to help you scale. You also need people to grow your business, so consider taking leadership and management courses to become a more effective people manager.
Bookkeeping and tracking everything you’re doing is extremely important if you want to scale. You need to know what’s going on with your invoicing, accounts payable, banking, and client history if you want to scale.
Scaling is an investment, but it’s a worthwhile investment.
Not convinced? Here’s why:
- If your invoicing process is disorganized, and you can’t invoice in a timely manner, then you can’t collect your money, you can’t pay your bills, and therefore, you can’t run and scale your business.
- If you don’t track your conversations with clients when you offer them a bid or a quote, and you forget how much you offered them for a project and undercharge them, then you could be leaving money on the table you could be using to grow.
- When you’re on your own, tracking jobs is easy on your calendar app or on paper. However, as soon as you have an employee, you’ll need to use a system that can be shared between the two of you, and that makes scheduling jobs easier. If you make mistakes scheduling and dispatching jobs, then you could end up with missed appointments, unhappy clients, and lost revenue.
“Usually, solopreneurs track things on paper or Excel. But, these options could feel cumbersome,” Shabir explains. Sometimes online bookkeeping can be daunting; however, systems and software can make life significantly easier. These things take up a lot of time, which is something you need if you’re trying to scale your business.
“Once you start filling your day with customers, your evenings get spent on paperwork. Then you might realize there’s software that can handle it all for you.”
Shabir explains that you might not need a comprehensive solution right away. For example, you can start with an app that handles just one component of your business operations for the meantime because these things can cost you money.
When you start to adapt to a software solution and see a need for more functionality, then you can make an investment in a business operations software that makes a huge difference.