The Turnkey Approach to Scalability: 3 Simple Ways to Prepare for Growth
July 19, 2018 in BUSINESS
JON-BACHRACH
July 19, 2018 in BUSINESS
Most businesses strive for growth. However, many also find themselves not quite ready to handle it when it comes.
Once your company is launched and you’re stuck managing its day-to-day challenges, it’s not as easy to go back and change the business’ foundation: the systems, process and people it relies on to run.
The turnkey approach to being able to welcome big growth is to follow the best practices for scalability as early as you can.
If you want your business to be ready to scale up when the time comes, there are steps you can take today.
Martin Zwilling defines business scalability this way in a Forbes column: “the potential to multiply revenue with minimal incremental cost.”
The classic example of a scalable business is a software company. The company pays to build the software up front, but after that, the software can technically be sold indefinitely with little additional expense. Zwilling also defines a scalable business as having high margins (over 50 percent), low support, and minimum staff.
In the startup world, a scalable business typically refers to one poised for rapid and exponential growth. These are the types of companies that are the most attractive to investors. But as we noted in our post on Venture Capital
As we’ll discuss, scalability is also about establishing what’s profitable on a small scale and automating your business as much as possible to keep it agile and profitable. It can help minimize overhead costs and financial risks, regardless of your intended business size.
If you’re ready to get your company ready for growth, here is a turnkey approach to starting right away.
The methods and staff you’re using now might get the job done just fine. But would things still be fine if your client list doubled? What if it grew by ten times?
Start thinking of your current company as the one you’d like to have in the future, and adjust as necessary.
For example, when you hit your growth goals, will your company require different staff, structure, or tools? If so, why not start investing in making those changes now? In many cases, the tools, people and systems required of a bigger company will also benefit your current company.
This Infusionsoft article has great advice: “Resist the temptation to slap together a myriad of inexpensive and inadequate options and think ahead to what will serve your business best in the future. A forward thinking mindset can help you avoid a common small business trap: a patchwork maze of systems that just aren’t getting the job done.”
Another great way to change your mindset is to view your company through the eyes of a prospective buyer. A buyer tends to have a laser focus on the
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Scalability depends on your team’s ability to repeat your sales process and other processes as quickly and as easily as possible. If you don’t have the ability to sell the same pre-built product over and over again (like the software company model), you need to get as close to it as possible.
Generally, that means removing any friction so all work flows smoothly and uniformly. That can’t happen unless you’ve haven’t taken the time to document, analyze and streamline your business procedures.
Document processes – Instructions should be clear and easy to access for everyone on staff. Documenting them and keeping them current means that they won’t change from one employee to the next or get lost when an employee leaves. Taking the time to write down what actually happens is also a first step for spotting inefficiencies.
Look for bottlenecks – As you document processes, note where are things getting held up. What causes delays and headaches? Which tasks do you or your staff dread? This is where to focus your attention first.
Automate – As we mentioned in our full post on creating systems and processes, plenty of automation options exist for areas like project management, accounting, customer support, customer relationship management and more. Putting these tools in place can go a long way toward helping your business run more smoothly.
Outsource – In some cases, you need to create a job description for someone to handle the jobs that are giving you headaches. You don’t need to hire full-time if you don’t have the budget or the right role. Part-timers, freelancers and agencies can also be great options. Make sure that anyone you hire has defined jobs and objectives. (Related: Hiring for Growth: How to Find People Who Add Maximum Value)
[content_upgrade cu_id=”841″]Process-driven companies are also very attractive to buyers and investors. For more, download our bonus resource: How to Analyze Your Company Like a Buyer Would.[content_upgrade_button]Click Here[/content_upgrade_button][/content_upgrade]
A best practice for getting ready to scale is to perfect a minimum viable product. That includes getting some customers willing to pay full price for what you’re selling before you make any attempt to ramp things up.
Keeping things simple when you start out reduces your risk. It gives you a chance to validate your process and test out how you can run things profitably before you’re required to make bigger investments in infrastructure and staff. That’s as true for a service-based company like a law firm as it is for a software company.
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There are plenty of challenges to prepare for as your company grows, as we mention in another turnkey approach, being prepared for business growth challenges. That’s why it pays to keep overhead costs as low as possible when you’re starting out.
One great option for businesses getting ready to scale up is to locate in a turnkey office space instead of committing to a traditional long-term office lease. Turnkey office spaces specialize in offices that are furnished, have plenty of shared amenities, and require only short-term commitments — perfect for companies that need to expand quickly or want the option to reduce their size if they need to.
To search for a turnkey office space in your area, start here.
