5 Signs That Your Business Is Ready to Scale

Entrepreneurship Feature Life Money & Career

Dear Women in Business, here is the truth: most entrepreneurs start their businesses with the hope that one day, the business will move from the startup phase and a successful, profitable company.  While a key part of this process is time and experience, several firms have scaled up sooner than their owners thought was possible.  On the other side, if as an entrepreneur, you make a move to scale up your business before it is ready, it can lead to the demise of that business.  So, what are some of the signs that your business is ready to scale?   In this article, I will share with you five (5) indicators that you may be ready to scale your business.

But before I do that, let me share with you what it means to “scale your business”. To scale your business means that you are increasing your income at a faster rate than your costs are increasing.  That means you can make more money without having to spend significantly more money.  So now that we have established what it means, let’s talk about the signs that you are ready to scale your business.

A Clear Business Model

At the start of your business, you are on the hunt for your winning product or service and the niche that you can consistently and excellently serve.  This journey usually involves a bit of trial and error such as product or service testing, refining of the target audience and even completely switching industries altogether. After this period of testing, adjusting, and strategizing, there comes a time when you become clear about who you are as a brand, whom you serve and how you serve.  This clarity helps you refine your business model and make ‘yes’ or ‘no’ decisions about opportunities that come your way. Clarity is a must-have factor before you scale your business.

The Facts aka Data

Many business owners mistakenly use feelings and not facts when deciding to scale their business. When you decide to scale your business, you must use solid data.  As a business owner, I understand the value of knowing your numbers.  Especially when it comes to sales, numbers give you much-needed insight into your customers’ behaviour and the behaviour of your prospects.  Here is some of the data that you need:

  • Number of days or encounters with your business to convert a client
  • The cost of creating your product or service and customer experiences
  • Your conversion rate for your marketing efforts (email, social media, lead generation)
  • The number of consistent, recurrent customers
  • The average monthly sales (figure) for a 12–18-month period

By paying attention to your data, you are less likely to make an error in judgment with your business. 

Simple processes and systems

The number one rule of mass-producing any product is a clear formula or recipe.  The same goes for scaling your business.  You cannot scale your business if your formula or recipe for success is not clear.  How can you achieve the highest results with the least amount of variation?  This means being able to produce the same quality product and service time and time again with the smallest amount of human intervention.  When you have gotten to this stage in your business, it may be a sign that you are ready to scale.

A loyal and consistent customer-base

Bernard Kelvin Clive said, “A referred brand is a preferred brand, and a preferred brand is a preferred brand”.  More than 60% of my business comes from recurrent loyal customers and referrals from them. At the entrepreneurial stage of your business, your chase new customers. When you are ready to scale your business, you recognize that the most important customer relationships are the ones you nurture with your loyal customers.  Your loyal customers become the biggest ambassadors of your brand and your business.  Word of mouth about who you are and what you do may have a higher rate of conversion than some of your best marketing campaigns.  As your business grows, you realize that you can’t be everywhere at once.  A loyal and consistent customer base gives you the best advantage.

Consistent Profit Levels

When growing and scaling your business, consistent profit is key. This will allow you to invest in your business and continue to grow, rather than being forced to sell off assets or raise more debt to keep things going. So, before you think about scaling your business, you ought to be consistently profitable in your business for at least 1-2 years and, you must know the actual numbers of your profit.  This is the true sign of a strong and profitable business model and the readiness to take your business to the next level.

So, your business may be growing.  You may be seeing the rewards of your work in your business:  your brand recognition, easier operations, and consistent income.  My advice is to add these five factors to your decision-making process before scaling your operations.