“Growing” a strong business is the dream of any entrepreneur. But how to scale up, given the instability of the market? The editorial team of the agency “Precisely.” has laid everything out on the shelves so that you can understand whether you need to expand your business and how to do it so as not to go broke.
Why scale an existing business
The purpose of scaling a business varies how to build phone number list among entrepreneurs, but the basic idea is that expansion helps increase profits. In addition, developing a company can bring several other benefits:
Reducing risks
Even if the business processes within a company are perfectly organized, the market can be unstable. Changes can occur in it that can harm the work and viability of the company.
For example, an entrepreneur opened a coffee shop. It has been operating successfully for a long time, deliveries are established, and customer traffic is stable. The first thing that threatens such a business is competitors. A chain coffee shop opening nearby with a cheaper product will reduce the number of customers. There are other threats: suppliers can raise prices, the landlord may not renew the contract, and the road near the coffee shop can be dug up due to a heating mains accident.
If an entrepreneur has one coffee shop, then unforeseen situations can call its existence into question. By scaling the business, opening a second outlet in another location, the businessman will ensure not only the preservation of the first coffee shop, but also support it during a crisis.
Reducing purchasing or production costs
By purchasing consumables in large quantities, you can save money and ensure additional profit.
Increase brand awareness
Scaling your business means increasing varastovaraston käytön edut singaporessa the number of customers. The more people know about you, the more famous your brand becomes. Remember that the most popular and sought-after brands have become so thanks to smart expansion.
Increasing investor interest
Investors are more willing to invest their funds in a rapidly growing business. If you plan to secure investor support, you should think about expansion.
How to Determine if Your Company Needs to Scale
The first question an entrepreneur asks about scaling is “how do you know if a business is ready to expand?” Here, two situations can be identified that signal the need for expansion.
Availability of stable profit
Any expansion occurs according to the following scenario. The company invests funds and establishes processes, and after a while begins to receive profit from a new store, product or service. Therefore, the first signal for expansion can be considered a stable profit for six months or more.
Demand for the product
When a company can’t handle the flow of customers, the decision to scale up needs to be made here and now. If a customer has to stand in a huge queue or wait for a manager to call for several days, they will turn to competitors. Expansion with high stable demand is a necessity. It is only important to determine the development vector, make a plan and start acting.
How to conduct a strategy session
A guide for those who consider a strategy session as a tool for business growth, from the founders of the company “Precisely.”
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Two strategies for business expansion
There are two scaling strategies:
Horizontal strategy
A horizontal strategy is expansion through increasing the volume of production or provision of services: opening new stores, salons, branches.
A horizontal strategy is suitable for companies au emai list that have all their business processes in place. If they have problems, such as a lack of necessary personnel or untimely deliveries, then expansion will only make the situation worse.
Vertical strategy
Increased profits are achieved by including new stages of production or provision of services. The vertical strategy identifies two areas for growth:
