How To Scale Up Your Business

Feeling like your business has stagnated or just hungry to boost revenue? Deciding the future of your small business is one of the most crucial decisions you’ll ever make as an entrepreneur. Should you scale up and take your business to the next level? Or is it time to sell, cash in on your hard work, and move on to new ventures?

Once you’ve assessed your opportunity, decided to scale and prepared your business to scale up. Here’s 12 ideas to get you started:

1. Focus on a customer group or untapped market opportunity.
2. Streamline with technology.
3. Standardise your processes.
4. Identify and fix bottlenecks.
5. Re-assess your current capabilities.
6. Talk to your current suppliers.
7. Beef up your marketing.
8. Outsource for growth.
9. Expand your geographies or franchise out.
10. Form partnerships.
11. Diversify your offering.
12. Network and build your personal brand.

But First – Assess Your Opportunity

It’s crucial to have a clear understanding of your current performance to show where the opportunities are and where weaknesses might be. Analyse your:

1. Financial Situation

Review your income, balance sheets, and cash flow statements to assess your financial stability. Look at your revenue trends over the past few years and determine your profitability margins across different products and services. Where do you make your most profit? Is there room to grow these areas or expand under-developed products and services.

Examine your debt levels and other financial obligations. Explore your finance options. Do you have the assets, net worth and trading history to take on additional borrowing to fund growth, or, do you have enough free cash to cover investment and leave enough for contingency if the unexpected happens?

2. Market Position

Conduct a SWOT analysis. Understanding your competitive strengths, weaknesses, opportunities, and threats helps identify areas that place you above your competition and where you could improve. Where exactly is the room for your growth? Which parts of the market are under-served? What makes you different? Do you have or could you create a competitive advantage?

Conduct a PESTLE analysis. Examine the Political, Economic, Sociological, Technological, Legal and Environmental factors that affect the market you operate in. Where are the opportunities, do you see trends to explore or changes you can take advantage of?

3. Customer Satisfaction

Customer satisfaction levels and loyalty can indicate a strong brand identity and potential for growth. Get your customers’ feedback by conducting surveys, reviews or asking them directly.

This can provide insight into large or small improvements that could make a big difference to overall customer satisfaction levels, opening the door to growth.

4. Business Goals

Is your business achieving the goals that you set out in your launch or annual business plan? Is it delivering the financial reward and lifestyle you hoped for? Remember scaling up is likely to mean a bigger commitment from yourself in terms of time, money or both.

Project your growth forward, will the reward be worth the effort? Will you be happy with a higher turnover but lower profit margin for example?

Ready To Scale Up Your Business?

Are ready for a bigger enterprise, to take your business to the next level. Scaling up requires time, research, resources, and expertise. Ask yourself if growth is achievable:

• Do I have the finances in reserve or the assets and trading history to borrow the funds required to invest and grow?
• Is there an operating efficiency to be made, a gap in the market, an unserved customer audience, a competitor I can take on or a trend I can capitalise on?
• Could I replicate my business in other areas or expand to cover a wider area with the same level of success?
• Will I be able to dedicate more time to the business while maintaining the work-life balance I want?
• Are my customers highlighting areas to improve that might allow me to grow?

If your answers are yes, then its time for a costed business plan. If you’re unsure, tread carefully and perhaps do further research or make low cost investments before increasing your level of risk.

3 Challenges of Scaling a Business

• Resources. Scaling typically requires capital investment. This might include funding for new equipment, expanded facilities, marketing campaigns, and additional staff. Scaling your business often requires upgrading or expanding your physical and digital infrastructure, which includes everything from new office spaces and manufacturing facilities to advanced IT systems

• Complexity and Risk. As your business grows, managing operations becomes more complex. Maintaining product or service quality can become more difficult. However, consistent quality across all areas is crucial to sustaining growth. Developing a robust risk management strategy that includes finances, industry and operation risks is crucial to solidifying your scaling efforts, as will building the right team to help you manage the operation.

• Maintaining Customer Satisfaction. With growth, there’s a risk that customer service and satisfaction could decline. Maintaining high standards and ensuring your customers continue receiving excellent service is essential. Scaling can strain your current processes and systems. Continuously improving and optimising your operations is necessary to maintain efficiency and customer satisfaction.

Preparing to Scale a Business

1. Clarify your funding. You will likely require some funding and investment. Explore funding options including your cash reserves, bank facilities, investor loans, asset finance or business loans from alternative lenders. The best choice depends on your business needs and financial situation.
   Develop a detailed financial plan outlining the required investment, projected revenue, and return on investment. This will help you secure investment and manage your cashflow effectively.
   
2. Set your operational plan. Devise a comprehensive strategy that outlines expansion goals, target markets, and competitive positioning, including marketing, sales, and operational plans. Set SMART goals – specific, measurable, achievable, realistic and timely, to ensure you remain focused.
   Streamline your operations to handle increased demand. Automating processes, such as optimising supply chains or improving inventory management, is an excellent way to boost your operations’ efficiency, reduce downtime, and increase productivity.
   
3. Build your team. Scale your team with specific skills to handle the increase in volume and variety of workload. Invest in employee training and development to ensure your team has the skills and knowledge needed to succeed. Unless you want to remain the Head of Finance, HR, Marketing, IT and Sales, its best to bring in support where you need it most.
   
4. Check your infrastructure. Bigger businesses typically utilise more technology, can your set-up scale with you? If you have suppliers, can they cope with increased demand and provide the same level of service?
   

12 Ways To Scale Up Your Business

1. Focus on a customer group or market opportunity

With any luck, when you followed the 4 steps of assessing your opportunity, your financial analysis, market research, customer surveys or your original business goals, a growth opportunity came to light.
Perhaps there’s a particular customer demographic that are under-served, maybe your customers actually want an additional product or service, maybe you’ve spotted a market trend that you can serve before everyone else. Remember, to do well in a market, you need to be first, cheapest or the best – based on a point of difference.

2. Streamline with technology

Small businesses tend to do as much as they can in-house and with little investment to establish a viable operation. But as you scale, the need to handle things manually can hold you back both by costing you time and money, slowing you down and preventing you from taking on other work that drives the business forward.

Whether you’re a farmer considering drone technology to assess soil nutrients and boost yields, a manufacturer looking at warehouse optimisation software to boost inventory efficiency, or a glamping site looking at online booking platforms to boost occupancy, technological improvements exist in every sector. Explore whether there’s technology available to speed up your operation or improve what you do.

3. Standardise your processes

If every process is different, administration takes longer. This is ok if your business offers a bespoke service but otherwise having a repeatable, efficient, documented method of doing things will speed you up, make it easier to train and employ new staff, make it easier to set and monitor standards as well as free up your time for more valuable things. Time is money.

4. Identify and fix bottlenecks

Map out your customer journey from the point they find out about your business to the point they become a repeat customer. Are customers getting stuck at any point? Are they dropping out of your sales funnel or simply not returning to you. Find out why and fix the bottleneck or broken part of the customer journey. Make sure your communication is consistent throughout and allows for customers to highlight any issues they are having.

5. Re-assess your current capabilities

Your business was set up to produce something or provide a service, but within what you already do, there are bound to be other opportunities found in your existing space, components or skills. For example, most corner shops are now also parcel depots benefiting from increased footfall. Greggs has recently taken its menu items and recombined them to make hot food, with products like a crispy chicken wrap that rivals outlets such as KFC. You might have additional desk or meeting room space in your office that you could rent out to remote workers providing a similar service to Wework. Take a look at your operation with a fresh pair of eyes or bring along a friend to explore ‘what else can we do here’.

6. Talk to your current suppliers

If you have suppliers, they are one step up the supply chain from you. They might see trends and opportunities before you do, talking to them could allow you to capitalise on something that others haven’t seen coming. Your suppliers might also sell other products that could offer growth opportunities and are likely to know what’s doing well with other businesses they sell to. If you want to scale your business, keep your ear to the ground, keep in close contact with your suppliers.

7. Beef up your marketing

Share of voice matters. Make sure your current customers can find you every time they need you and potential customers for your existing or new products can find you too. There are a huge number of channels to consider these days, some of which will suit your particular audience better than others. Make sure you appear where your audience will be looking.

Trade magazines, events, email, direct mail, your website, Google my business, Google and Bing AdWords, press and digital TV, YouTube, outdoor advertising, online articles and advertorials to name a few of the most obvious channels. Social media is also vast. LinkedIn might be best for corporate customers or larger businesses. Facebook or Instagram might work if you’re a lifestyle business or hospitality venue. Tiktok might work if you’re a business that follows a trend or you simply have interesting video footage.

Decide whether your existing communications are up to the job and whether there are any suitable channels you’re not using that could be of benefit.

8. Outsource for growth

Back to the theme of time is money, perhaps your current tasks are holding you back, could you outsource some of the things you do on a daily basis, freeing you up for more important tasks. Outsourcing also means there’s no additional staff to manage and you can pay for what you use if you are unsure how much time particular tasks might take.

For example outsource your IT management to a local specialist such as Bechtle. Let a partner bolster your admin team or simply act as a phone answering service such as Moneypenny. Marketing can be scaled up by using outsourced team members, either on a task by task basis using individuals through sites such as Fiverr or whole teams such as those listed on this Ninja blog.

9. Expand your geographies or franchise out

If you are a local or regional business, what would it take to serve a wider area? Could you add additional branches or expand your delivery network. Could you outsource your deliveries to a local logistics or courier business?

Have you considered franchising what you do to serve local customers in a different town? Franchising provides a simple route to scale a business rapidly and to a large scale if desired. Taking on other entrepreneurs to run a version of your business under your rules whilst you take a buy-in fee and share of the profit has proved very successful for numerous types of businesses, not just the fast-food chains we all know. There’s a lot of useful resources to help you decide, if you think that’s for you, check out Franchise UK.

You might also consider buying another business. Either a business similar to yours that you can convert to replicate your own model, or one you can learn from. Perhaps something that adds skills to your own business that runs on its own as well as complimenting the business you already run. Many entrepreneurs also consider buying out their supply chain, a business you already work with either as a customer or supplier.

10. Form partnerships

Rather than buying out a business, you could form strategic partnerships either with complimentary businesses or another firm in your supply chain. Working together can reduce costs, open opportunities and new markets, refer customers and offer mutually beneficial revenue growth.

11. Diversify your offering

Put simply, can you add something more or different to your existing range or service? Anything that encourages your existing customers to buy more from you or could attract additional customers is worth considering.

For example, around 1/3 of UK farms have diversified. Farm shops, activity centres, holiday lets, glamping sites, paintball and even skydiving centres are all now in use on working UK farms. Restaurants were forced to diversify during the Covid pandemic by offering takeaways, and the ballooning vegan market, once niche is widely catered for. If you’re a retailer, what else could you sell? Locally produced items are often appreciated, whatever they are. If you’re a venue, could you sell associated clothing. If you’re a service based business could you train others by offering workshops? The possibilities are endless.

12. Network and build your personal brand

In business, its often not what you know but who you know. Establishing yourself as an expert in your field will naturally draw others to you over time who are looking for support.

Make sure you have a credible LinkedIn profile and it’s up-to-date. Go to local business networking events and awards ceremonies. Join your local chamber of commerce. If you feel able, try writing articles or just your thoughts on a topic on LinkedIn, for your local newspaper or for a relevant trade or local publication. Get your name and face out there consistently and people will find you.

Is It Time To Sell?

There’s always the chance that you don’t see growth opportunities and you don’t feel that your current business will meet your goals anymore.

Why Should I Sell Rather than Scale My Business?

• Immediate Financial Reward: Selling your business can provide a substantial lump sum of money, which can be used for investing in new ventures or other financial aspirations.

• Mitigate Personal Financial Risks: Selling can mitigate the financial risks associated with owning and operating a business, particularly in volatile markets or industries with uncertain futures. It might be time to sell if you foresee potential downturns in the industry or increased competition.

• Technological Changes: Rapid technological advancements can render some business models obsolete. You can avoid the risks and costs of keeping up with technology by selling.

• Competition: A new competitor in the industry may have taken the market by storm, making it difficult for you to compete. Selling your business may allow someone else with innovative ideas to make the company stand out.
  
  
• Personal Fulfilment: The sale of your business can enable you to focus on individual interests, hobbies, or activities that you may not have had time for while running the business.

Challenges of Selling your Business

• Finding the right buyer for your business can be challenging and time-consuming. It is crucial to ensure that the buyer aligns with your business values and vision, especially if you care about the future direction of the business. Buyers will conduct thorough due diligence, which can be exhaustive, requiring transparency and detailed documentation of your business operations and finances.

• Securing an accurate valuation of your business is crucial for selling your company for a fair price. Determining the correct value of your business can be complex, requiring expert assessment to ensure you receive a fair price. A buyer may want to negotiate on the price; therefore, engaging experienced legal and financial advisors is essential to navigate the complexities of the sale, which can also add to the costs.

• Not getting emotional, especially if it was your dream for a long time. In some cases, business owners face no choice but to sell if somethiong has gone wrong or you’ve tried and failed to scale the business, making it difficult to adjust and accept their personal and professional future. Ensuring that the sales process and transition are a positive experience for the business’s employees is crucial, but it can also be challenging to accept.

5 Ways to Prepare Your Business for Sale

1. Conduct a thorough financial audit to present accurate and transparent financial records to build trust with potential buyers. Prepare detailed future financial projections to demonstrate potential growth and profitability to buyers.
2. Address any legal issues, ensure compliance with regulations, and prepare necessary legal documents for the sale.
3. Engage professional valuers or financial advisors to assess your business’s worth based on assets, revenue, profitability, and market conditions.
4. Finding a buyer can be complex. Small business owners looking for a reliable buyer should consider hiring a business broker specialising in selling businesses within your industry to reach a broader pool of potential buyers. Also, identify and reach out to strategic buyers who may have a vested interest in acquiring your business, such as competitors or companies looking to expand.
5. Carefully evaluate each offer once your business has received a handful. Assess not only the price but also the buyers’ reputation, especially if you are interested in the successful continuation of your business and the terms and conditions of the sale. Once the most suitable buyer has been selected, the deal can be finalised by signing the necessary documents, transferring ownership, and addressing any post-sale responsibilities or agreements.

Scale Your Business with Portman

At Portman, we appreciate how challenging it can be for business owners to decide between scaling up and expanding their business or selling up and exploring new ventures. The decision to scale your business can be tricky if you are concerned about the funding involved. This is where we can help.

Asset Finance is perfect if you need new equipment or vehicles, its secured nature often means rates are better than a loan for the equivalent situation. Our short-term finance and business loan solutions can provide the funding you need to scale up your business. They allow you to streamline your services and hire specialised staff to help grow your company. Contact us today to learn how we can support your business growth.

Written by Saul Michelson

Head of Marketing

Degree and Post-Grad qualified with 23 years business-to-business experience, Saul is a well-rounded senior professional. A previous winner of Marketing Week’s ‘Best B2B Campaign’ award and two Construction Marketing Awards, Saul enjoys finding out what makes businesses tick and writing articles that get straight to the point.

FAQ Category

• Scale or Sell Your Business FAQs

Scale or Sell Your Business FAQs

How do I determine if my business is ready to scale?

To determine if your business is ready to scale, evaluate its financial health, market demand, operational efficiency, and resource availability. Ensure it has a scalable business model, strong leadership, and the necessary infrastructure to support growth.

What are the signs that it might be time to sell my business?

Signs that it might be time to sell your business include reaching a personal financial goal, feeling burnt out or ready for retirement, facing market saturation, or seeing significant industry changes that could negatively impact your business. If your company has peaked and future growth seems challenging, selling might be a logical option.

When scaling or selling my small business, what are the key factors to consider?

When deciding whether to scale or sell your small business, consider your financial health, market position, customer satisfaction, personal goals, business goals, and long-term vision. Assessing these elements will help you determine which option aligns best with your aspirations and the current state of your business.

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