Importance of Scaling Within Business
Every business starts out with the objective to grow. The aim is to get to breakeven point, where your costs are covered, and you can begin to make a profit. But this needs careful planning. If you don’t look at scalability then you are effectively taking a scattergun approach to your business plan. It may work, but it also has the potential to fall flat on its face.
Scalability is the capacity to be changed in scale or size. Rather than focus on the ‘change’ aspect, it’s about focusing on the ‘capacity’ element. Consider the key components that really drive the capacity. Here are some key steps to give you an idea:
1. Determine your milestones
Outline the objectives that will set you on a successful path for business growth. Know what it is you want to achieve and the effort level required to get there. Is this achievable under different conditions?
2. Identify the risks
Factor in the changes that could make or break your business. Do you have the provisions and resources to respond to things like an economic downturn, saturation of new competitors, staffing issues or production problems?
3. Keep a close eye on sales
Volume of sales is the key indicator on how your business is performing. To ensure you are profitable, you need to adjust your expenses in line with your sales patterns. If sales drop right off then you know you need to scale back. If they suddenly increase, you need to upscale quickly.
4. Hire carefully
Staffing is one of the biggest costs to a business. Expand too quickly and you face an expense that may be hard to recoup. Equally, if you don’t expand enough, you may not be able to meet demand. Scale your staff with demand and have the ability to adapt quickly.
5. Maintain good relationships
Good relationships with suppliers can sometimes make all the difference when you are under pressure from increased demand. This holds the potential for you to source products, materials or staff much more quickly, to react to changes in sales.