One of the tricks to running a successful business is getting your timing right.
Knowing how to make the right move at the right moment can ensure continued growth and sustainability. But get your timing wrong, and you could be putting all that hard work at risk.
So, how do you know when the right time is to scale your business?
If things are going well, you might be thinking about taking your business to the next level. But how do you know if you’re really ready?
When is the right time to scale your business, and how can you know for sure?
While there’s no magic formula of how and when to do it, there are some key indicators that can help you decide.
Read on to see if your business fits the bill.
Is It Time To Scale Your Business?
Scaling vs Growth
Many business owners confuse scaling with growth, but there are some fundamental differences between the two things. While growth involves seeking and gaining new customers, scaling is a conscious decision to expand your business by building the infrastructure you need to develop sustainably.
To scale your business, you want to take advantage of the resources you have to create a higher return on investment. This may involve training your existing staff, bringing on new contractors or team members, expanding your offerings, promoting your business to a broader audience, or adding new systems and procedures.
Signs It Might be Time to Scale
1. You’re turning down opportunities
Is demand outstripping your ability to supply? New customers are great, but if your business struggles to provide goods or services due to a lack of time, inventory, or staff, it may be time to consider scaling up.
Before jumping in, ensure the demand is sustainable, not just a short-term trend. It can be helpful to look at the bigger picture of how your industry is performing too, instead of just focusing on your piece of the puzzle.
These things will give you a good indication of whether now is the right time to make a move.
2. You’re achieving your goals easily
You know those lofty goals you set for your business at the start of the year? Does it feel like you are smashing them already? Then, it’s time to double check the data.
All business decisions should be data-driven. Review your financial reports and budgets to ensure you are in a stable position to reinvest in further growth. One great indicator is that you’re consistently achieving or outperforming your financial goals.
3. You have reliable clients
While new customers can help your business grow, the return clients are the bread and butter of your business. A consistent customer base that keeps coming back for more, along with a steady stream of new customers, creates a stable financial foundation to scale your business.
Ensure you have great processes in place to nurture and retain your loyal customers and it is a surefire way to prepare for the potential of scaling your business.
4. Your revenue has stalled
Do you have enough money to cover your expenses but not much left for anything else? This may be a sign your business has plateaued. If your outgoings are predictable and manageable, but the profits aren’t growing as quickly as you would like, it may be time to scale.
5. Your team is ready for more
Having a strong team in place is vital for growth. If your people are already stretched or operating beyond their limits, you will need to make some changes before you can scale. This may mean upskilling, hiring new staff, or outsourcing aspects to give your team the time and energy to take on more.
Getting Ready To Scale Your Business
To scale your business, you will need to review and adjust your existing systems and workflows to ensure you and your team can handle the increased pressures.
One great year doesn’t necessarily mean it’s time to scale your business. Before taking the leap, you want to have a proven success record that allows you to predict the future as accurately as possible.
Remember that nothing is ever certain, especially in the current economic climate. Even with all the right preparation, the unexpected can happen.
That’s why it’s vital to make sure your finances are in order before making any changes. Ensure you have a solid financial plan based on forecasting and projections, and build in some backup plans in case things go sideways.
It can also help to have someone in your corner checking that your finances are being tracked and correctly recorded on a regular basis. If you don’t have someone on your team that can do that, a bookkeeper is the perfect solution!
Reach out to us today to find out more about how our team of expert bookkeepers can wage war on your finances