Scaling a business: 9 tips for success

Pop quiz: What’s the difference between growing a business and scaling a business? On the surface, they seem interchangeable. After all, they both involve making a business larger. But you might be surprised to learn they are actually quite different—they have distinct meanings and require separate strategies to pull off. Here’s an example: If you’re a small-business owner and you build a new facility and hire 200 new employees to staff it, you are certainly growing your business. But you’re not scaling it. 

Growing a business typically involves increasing revenue by proportionally adding resources and employees. On the other hand, scaling a company refers to the process of building its revenue to meet a larger demand—without substantially increasing the costs typically associated with growth. 

Keep reading for some tips and best practices for scaling your business efficiently and effectively.

What you’ll learn:

• Scaling a business refers to the process of increasing your company’s revenue without stretching its infrastructure and resources too thin.

• To successfully scale a business, you need to create a plan, set goals and regularly review your strategy and metrics to pinpoint areas of improvement.

• Depending on your industry, you could also scale your operations by improving your marketing strategy, investing in technology, finding the right staff and outsourcing when necessary.

• To support your business’s scaling efforts, you might look into different types of financing, such as a business credit card.

The first step to successfully scaling your business is to create a plan. Having a business plan in place as you begin to scale can help with forecasting and budgeting. When creating your plan, review the products or services that would make the most sense to scale. For example, if you operate a fitness center, you might choose to offer different membership options since you already have the infrastructure in place. Or, if you have an automotive business, you could lease or rent vehicles from your existing fleet to maximize profitability without spreading your resources too thin. Both involve leveraging the assets you already have in your business—in these examples, infrastructure and inventory—to increase revenue without substantial cash investments.

Before you begin your scaling efforts, creating business goals can help you set expectations, ensure alignment and provide a reference point to track progress. With goals in place, it becomes easier to make adjustments as necessary. You can start by setting a larger goal you want to achieve, then create smaller, more attainable goals to help you reach it step by step. Remember to revisit your goals often to ensure you’re executing your strategy properly. 

You can break down business goals into two categories: short term and long term.

• Short-term goals: Short-term goals are what you want to accomplish in roughly the next six months to a year. Ideally, they serve as a steppingstone to help with your longer-term goals. For example, hitting a certain profitability percentage for an individual product over the course of two months or increasing monthly visits to your blog within the next six months could be considered short-term goals.

• Long-term goals: Long-term goals are objectives you hope to achieve over a broad period of time. Examples of long-term goals are increasing your organization’s overall market share over five years or increasing company profitability by a certain percentage within two years.

Marketing can play a huge role in your overall scaling efforts by increasing demand for your products and services, building brand awareness and driving customer loyalty through promotional efforts. Here are some marketing strategies to consider:

• Create targeted content for your clients.
• Enhance your company’s digital presence by optimizing social media platforms.
• Use analytics tools to track how your customers are interacting with your online assets.
• Consider paid advertising strategies to better reach your target audience.

To scale efficiently, you might consider adopting technology that can fuel sustainable growth.  Automation can potentially save your business time and money while conserving your current resources. Here are some different types of technology you could consider investing in:

• Using a service to analyze customer data
• Digital tools to improve operational efficiency and productivity
• Platforms to promote collaboration and alignment
• Software to help manage cash flow or invoicing

To expand your business, you might leverage different types of financing options, such as:

• Business credit cards: Business credit cards typically have higher credit limits than personal credit cards and offer benefits specifically designed with business owners in mind. As you begin scaling, you might consider using one—or multiple business credit cards—to finance purchases to move your company forward. 
• Business lines of credit: Business lines of credit work similarly to business credit cards—you’re approved for a certain limit, can borrow up to that amount and then pay it back over a set period. One difference: Business lines of credit tend to have higher credit limits than business credit cards and typically don’t offer rewards programs. 
• Business loans: A business loan can be secured from a bank, credit union or online lender, with funds typically provided in the form of a lump-sum payment. From there, the borrower makes payments based on established terms, including the repayment amount—with interest—and the loan’s repayment period. 
• Crowdfunding: A nontraditional avenue for securing capital—which grew in the age of social media—is crowdfunding. It’s a way to collectively raise funds, typically online, through donations from family members, friends and investors. For example, if you’re considering scaling your business by offering a new product, you might consider crowdfunding and tapping into your existing customer base to raise capital. 

If you need to hire to support your scaling efforts, look for employees who align with your business’s mission and are willing to grow with your company. While it might be tempting to hire an entry-level employee, it could be more beneficial to invest in an experienced staff member who can offer guidance and help take your company to the next level. Once you have the right team in place, understanding how to lead a team effectively and your unique leadership style can help provide overall team alignment. 

Because sustainable scaling is accomplished by growing revenue without proportionately increasing resources, there are times when you might consider outsourcing. Part of being a successful entrepreneur involves understanding when it’s best to keep tasks and processes in-house and when it makes sense to lean on an outside party. And if you find yourself scaling too fast, moving certain tasks outside of your business could help keep up with demand.

When scaling your business, finding ways to make internal processes more efficient and effective is crucial. When reviewing your existing processes, be sure to document everything so you can track progress and make improvements. Having proper documentation can also help when you train new hires or during team transitions as you continue to scale.

Carving out time to measure your processes and scaling efforts—during times of success and when you’re experiencing growing pains—can help you stay on top of decision-making and help you determine when and how to adjust your strategy. Keep data that tracks your key performance indicators (KPIs) and regularly review these metrics. This can set your company on the path to success as you scale. While it can vary, some KPIs to keep a close eye on include:

• Net profit
• Revenue growth rate
• Customer growth measurements
• Customer satisfaction scores

The decision to scale your business requires careful planning to ensure your efforts result in profitability—without overextending the resources and infrastructure you currently have in place. Once you’ve decided to scale your company, you might look for different financing options to support your plans. If you’re considering using a business credit card to scale your organization, you can get pre-approved by Capital One to help you find a business card that meets the unique needs of your company.