Scalability creates a major issue when acquiring business. No matter what the current status of your business. No matter whether you are an entrepreneur or solopreneur, a startup, an independent contractor working for a larger company, or a small-to-midsized business. Size does, indeed, matter.
Most of us have a mental picture of our product, service, or platform becoming incredibly in-demand. However, be careful what you wish for – if you haven’t been making plans for what lies ahead.
As you grow your business along its next mile, ask yourself and your employees these questions:
1) Our goal is to create more business. What if we gave that party and everyone showed up? Does our present business model support an increase in demand on capacity of 5%, 10%, 20% over the next 12 months?
2) Our goal is to acquire more customers. What types of customers do you wish to acquire? If your answer is simply “anyone who will buy our stuff”, you are in trouble. How many companies are burdened by a large customer base, some of whom order infrequently or, when ordering, make your life miserable in the process? Size matters. Perhaps a more realistic goal is to prune your customer base and focus on acquiring more A-List customers: the types you do your best work for.
3) Our goal is to hire more employees to support our business growth. Think about how and where you will attract these new employees. One of the biggest issues with small business is that it is predominantly family-owned. If you grow your business beyond the ability of family members to support it, how comfortable will the family be with hiring from the outside?
4) Our goal is to obtain more financing to address our growing business. Whoa there. Are you addressing business won or business wished for? If you currently are not operating even at half capacity, starting to throw all sorts of money at the goal of “when we make it big” may result in your being focused on a goal which you cannot acquire (think Ready-Fire-Aim). Increasing your debt service is a serious decision that must be based on your understanding of your markets, your current customer base, and business already won. Are your eyes bigger than your stomach?
It’s extremely important to be proactive and anticipatory about the future. However, base your projections on the reality of what Right Now looks like, first and foremost. If you are scrambling to meet orders right now, are the right people and processes in place? Perhaps you can make your current business far more productive, and hence scalable, by streamlining your current business practices and making them more efficient. Perhaps you can increase your own output by scheduling your work and manufacturing flow more realistically, based on the segments into which your current customers fit (short term, long term, occasional statuses). Perhaps you can review the folks with whom you currently do business, and determine whether they are the types of customers that will move your business forward, or hold you back.
You may find you are able to scale yourself up and down – right now – by taking a good look at your current business model, key personnel in place, their core capabilities and interoperability, and your capacity. Once you have an inside-out understanding of your company, you just may find your business development goals are more easily achieved, as well.
Babette N. Ten Haken, Founder & President of Sales Aerobics for Engineers®, LLC, brings entrepreneurial mojo and business- and revenue-producing collaboration and communication tools to small and mid-sized businesses and startups. She was named one of the Top 50 Sales & Marketing Influencers 2013. Her book, Do YOU Mean Business? focuses on technical / non-technical collaboration strategies and tools.
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