In three steps a business can scale up effectively and efficiently. The starting point is knowing what areas of the business need cost cutting, consolidation and optimisation. Let’s start with the finance area.
1: Get Your Financial House In Order
If you’re here, you’re already doing the first thing you need to for a successful scale-up: you’re seeking advice and information. Inc.com lists seven steps to that end, and they’re worth considering and additionally worth considering is that each step in some way has an aspect of financial consideration to it.
If you’re going to get the basics down, you’ve got to have financial cushion enough to do so. Automation saves money, but implementation of automation is expensive. Marketing boosts are also costly. Non-essential outsourcing just makes sense, but social media monitoring takes a little cost in terms of time. You get the idea!
This is perhaps one reason another article on Inc.com points out that debt can be your friend; it can help finance certain operational needs as you go about acquiring equilibrium. What you need is a budgeting solution to help you make the right choices. Additionally, you’ve got to be careful about making debt expansion an operational policy.
If you’re always using loans to cover your costs, you’ll always have a deficit looming over your head. Getting rid of that can be difficult, but it’s not impossible. What you’ve got to do is strategically operate beneath your means as a business by trimming the fat and optimizing where appropriate. Also, consolidation is worth thinking about.
2: Find Ways To Optimize
When it comes to debt consolidation, according to DebtBusters.com.au, this is: “The process of taking all your debts and consolidating them into a single low interest loan. Rather than having multiple monthly payments, debt consolidation gives you one manageable monthly payment to meet.”
The chief advantage here is interest reduction. Interest can double the cost of a loan over time, and you’re beholden to it if you’ve taken out too many loans to reach your operational cruising altitude.
Beyond cutting costs, beyond optimization, and beyond consolidation, something else you want to do as you consider scaling out is finding ways to incentivize employees without having to pay out regular incentives. One way to do this is through facilitation of social status through awards given out based on outstanding service, like challenge coins.
If you’re unfamiliar with challenge coins, Embleholics.com defines them as: “…a small piece of metal, often shaped like a coin but which can be any shape, which is used to represent an organization or individual.” These can show other employees who has done the hard work, and who to respect; which can make those that out perform the others more satisfied.
3: Use Appropriate Speed When Scaling Out
Sometimes your business will have so much traffic that scaling out is necessary, and you need to do it all at once. The profit will definitely be there, and scaling out becomes an issue of properly serving your clients. Sometimes you’ve just pulled the “nose” of your business “jet” away from a vertical descent, and you’re about to level off. If you’re about to level off, you don’t want to shoot straight for the moon, you want to increase your altitude incrementally as your vessel will sustain it.
For some businesses, this will mean just changing one aspect of operations at a time, and moving onto the next one when the cost for the first change has come. In technology industries, you may not have this luxury.
The way to know when to scale up, and how integral that effort should be, is to juxtapose your current position against your desired one, and to know your industry.
If you get your financial house in order, you optimize as appropriate, and you scale out to fit the needs of your business, you’re likely to see successful profitability expansion from your efforts.