How to Scale Your Business While Minimizing Risk
Scaling a business always requires a certain degree of risk. Perhaps you want to venture into new markets or simply ramp up your production. Either way, you will be taking on some risk in the process. It’s not all about money, either. You could be risking the future of your name, your brand, or even your employee’s job security in the process. Consequently, scaling is not a process that any business owner should take lightly.
That said, we don’t want to scare you away from growing your business. At one point or another, nearly every business will want to scale and enhance its capacity to take in greater revenue. So, in today’s post, we are going to look at a few different ways to scale your business while minimizing risk!
Devise a Plan Ahead of Time
You should never, ever try to scale without a plan in place. If you start scaling “blind,” you will inevitably run into issues and expensive pain points that could run the risk of bringing the entire process to a halt. So, be ready to devise a smart, workable plan well in advance. Ideally, your plan should be finalized at least one month before you take the first steps to scale. This may require you to invest a lot of time and energy into a business scaling plan that makes sense, but it will be well worth the effort if it helps you take your business to new heights.
Be Ready to Invest From the Start
Unfortunately, it’s almost impossible to scale a business without making some investments on the front end. Whether you’re a manufacturer that needs to switch from a colloid mill to a homogenizer or you are simply a small brand looking to branch out with a new blog, you need to have the funds to support your endeavors. There’s no one-size-fits-all formula for calculating the scaling costs. That said, you can generally expect to spend at least 10% of your current business expenses to make significant advancements.
Avoid Taking On Substantial Debt
You need to ensure that you have enough funds to support the scaling process until you start to see increased returns. For example, you may begin to scale at the beginning of the calendar year. However, it could take up to a year before the fruits of your labor are actually realized through higher revenue, greater client retention, or some other desired result. This means that you should plan to have at least 6 months to a year’s worth of funds ready to invest in scaling before you ever begin the process. Many businesses have to take out loans or go into debt to do this, which increases the risk of scaling. Therefore, if possible, you should try to have as much cash on hand as possible, without going into debt.
Are you looking for even more advice to improve and grow your business? If so, be sure to check out some of our other business posts on Fusion News today!