In this post, Central Bank talks about the next step in running a successful business: scaling up. This process rarely happens by accident—type “business overnight success stories” into your search engine and most of the results have the word ‘myth’ in the headline. Instead, entrepreneurs who successfully scale their businesses usually start with a plan. Here is a step-by-step guide to the process of planning and executing a successful scale-up for your Houston business.
What is Scaling and How Do I Know it’s the Right Time?
If you’re a business owner, you’ve probably already thought about scaling your business even if you weren’t familiar with the exact term. Scaling simply means to grow your sales or client roster in an efficient and profitable manner. However, that doesn’t mean the process itself is simple or easy. Scaling up a business is a balancing act. If you grow too quickly, before you’re ready, you could end up burning out or losing customers because you can’t deliver the same quality. On the other hand, you don’t want to invest a lot of money in additional employees, equipment, or inventory before you have the capital to sustain these investments.
Five Signs Your Business is Ready to be Scaled
- You've reached your peak capacity for productivity and have to say no to new clients or opportunities.
- Your business is starting to reach or surpass the benchmarks for success you originally established.
- You have enough repeat customers to keep your cash flow steady. As Mark Cuban writes about how to scale a business, “if you can generate sales, you can have a successful company.”
- Your team of employees are excellent at what they do and excited to grow with the company.
- You're operating in a low-risk environment. This last sign can be tricky to discern, but basically it comes down to your readiness, both personally and as a business. Don’t take any risks you don’t have to, and don’t leap before you’re ready.
Ready to Start the Scaling Process? Here Are Our Best Tips.
- Consider Your Final Goal: According to popular author and entrepreneur Tim Ferris, “it's only when you're clear on your destination that you can plan a scale strategy to get there.” So figure out your endgame. Are you hoping to generate a certain amount of income? Build a successful business you can sell for a profit? Reach a specific number of sales? Make definable progress on the problem your company addresses? Of course, this goal may change as time goes on, but it helps to start the journey with a destination in mind.
- Think Through Your Timeline for Scaling the Business: Entrepreneurs are smart, creative, hard-working people who often possess boundless enthusiasm for your business idea. So, it makes sense that you may be ready to scale before your business is truly ready for it. Create a timeline from the present moment to your end goal. Is it reasonable? Ask a mentor or adviser for feedback.
- Consider the Barriers Preventing You from Scaling: Many new businesses start out with only one or two people doing everything, usually on a shoestring budget. Now that you’re considering scaling your business, look around to see what’s missing. Not enough employees? Old equipment? Small space? Takes too much time to produce the goods or services you sell? Once you know what you need, you can look for business funding that will help you scale in a cost-efficient manner.
- Consult with an Advisor: A good relationship bank is more than a source of business loans. Your banker can also offer advice, recommendations, and important contacts. Central Bank has been helping Houston businesses succeed since 1956. We offer personalized advice based on our local expertise and experience.
- Automate Internal Processes Such as Payroll, Cash Management, Etc.: To maximize efficiency, automate as much as you can. Central Bank’s treasury management services can help you automate payroll, cash management, and more.
- Utilize Outside Resources Such as Marketing Agencies: Marketing your business, especially online, is an important way to increase your website traffic and improve your lead conversions. Make sure you save room in your budget for marketing services.
Your Local Business Banking Partner
Scaling a business can be an exciting and stressful time. Partner with Central Bank for a smoother, more personalized banking experience. As your local relationship bank, we are here to answer your questions, listen to your needs and goals, and help you find the best solutions. We also think Houston is a great place to scale a business, and we can’t wait to see you succeed. Whether you’re in downtown Houston or nearby in Clear Lake, Conroe, Cypress, Katy or Galveston, the business banking team at Central Bank is ready to help you scale up. Visit any of our locations in Houston to get started, or contact us today to speak with our business banking team about your needs!