Did you know that 88% of small business owners reported growth in the past year? However, many small business owners also point to stressors like the economic environment (98%) and competition (92%) that could hinder their progress.
To maintain this momentum despite external challenges, you need to develop a strategy that focuses on scalability. If you’re not investing time and energy into creating a sustainable growth plan, you could find yourself falling behind the competition.
Let’s explore scalable strategies your business can implement today to ensure your continued success and growth.
1. Systematize everything.
While you might have all your internal processes memorized, keeping these procedures stored in your head can limit growth. Eventually, you’ll need to hire new team members and delegate tasks, and you’ll want those workflows to be well-documented and consistent.
Set yourself up to scale by:
- Identifying your top processes. Prioritize which processes you’ll document first based on their importance. For example, a river tubing company may start by documenting the process of creating an activity waiver using digital waiver software.
- Documenting one process per week. Once you have your list of priorities, start documenting each process one at a time. While you may type these in a typical document, don’t be afraid to use video clips or voice recordings to walk other team members through processes in a more engaging way.
- Creating a business playbook. Think of a business playbook as the next iteration of your initial business plan. While your business plan explained what you hoped to achieve and how you would do so, your business playbook should summarize your current operations and outline standards for new hires.
As a business owner, it can be hard to determine which processes are most essential because they’ve become second nature to you. Ask other team members which tasks they think would be most helpful for new hires to see documented, and work through those processes accordingly.
2. Embrace automation.
Manual, repetitive tasks prevent you from spending time on high-value growth activities. Automation can handle these tasks for you, allowing you to better allocate your energy.
Start by identifying tasks that consume time but don’t require your specific expertise or authority. Spend a week tracking where your time goes to better understand where you could use automation. Here are some examples of these tasks:
- Following up with leads
- Registering new clients
- Sending marketing communications via text or email
- Ordering products
- Creating invoices
- Entering data into your customer relationship management (CRM) platform
- Generating reports
Then, seek solutions that allow you to automate these processes. For example, a product-based small business may adopt an inventory management system that automatically generates purchase orders when a top-selling product is out of stock, allowing them to bypass tedious steps and simply approve the orders.
Alternatively, service-based small businesses may seek software solutions with automation features that trigger communications with prospects based on their position in the lead cycle.
3. Dive deeper into your business metrics.
You need to understand your business’s current state before trying to build upon it. To truly grasp your strengths and weaknesses, go deeper than just tracking revenue. Bottle POS recommends tracking more specific metrics like:
- Gross profit margin by product category. When you know which products are most profitable, you can stock your store and run promotions strategically. Service-based businesses can also analyze which services are most profitable. For example, gym owners may calculate the profitability of different workout classes and revamp their schedules based on this data.
- Inventory turnover rate. Identifying which products leave shelves the quickest helps you understand your customers’ preferences, proactively prevent popular items from going out of stock, and purchase similar products to expand your offerings.
- Average transaction value. Ultimately, you’ll want to increase customers’ average transaction value (the amount they spend per visit) over time. Establish a baseline to evaluate your progress.
- Customer retention rate. Scaling your business relies on keeping current customers satisfied and giving them a reason to return time and time again. If this number is lower than you’d like or expect, try launching a loyalty program or improving your customer service.
- Cost of goods sold (COGS). This metric refers to the direct cost of producing or acquiring your products. For example, if your liquor store sells a bottle of wine, your cost of goods sold would include the wholesale cost of the bottle, any freight or shipping costs, and state excise taxes (if applicable). This information helps you calculate profit margins more accurately.
Choosing the right software for your small business will help you calculate these metrics and other relevant data points, transforming them into easily readable reports that you can share with the rest of your team.
4. Find your niche.
79% of small business owners say that there is greater market competition today than when they started their businesses. If you continue offering the same products or services as your competitors with little differentiation, you’ll struggle to stand out.
However, finding your niche doesn’t mean reconstructing your offerings or business model. Instead, pinpoint what you do best and what customers love about your business, and focus on those strengths.
Start by analyzing your top customers and identifying common traits. For example, you may find that your top 20% of clients actively engage with your social media posts. They may be looking for new ways to connect with other customers and learn more about your brand.
Refine your marketing strategy according to your findings. In this case, you may start an online customer community. As Higher Logic explains, “A customer community is an online hub where customers can access support resources, provide product feedback, participate in discussion forums, and interact more deeply with your brand.”
Even if your business offers similar products or services to other small businesses, your online community may attract more customers who are similar to your top clients and are looking for interactive, immersive brand experiences.
5. Protect your cash flow.
It’s no secret that growth consumes cash. However, if you plan for potential cash flow shortages ahead of time, you can ensure you have enough to continue scaling up. Try these strategies to protect your cash flow:
- Speed up invoicing. If you run a service-based business, consider shortening your client payment terms or offering discounts for immediate payments to secure cash more quickly.
- Secure lines of credit in advance. With this approach, you’ll already have the resources to fund growth opportunities or cover unexpected expenses that could hinder growth.
- Analyze your inventory. Identify slow-moving stock, and determine how you’ll get rid of it to free up more cash. For example, you may run a promotion on a slow-moving product and avoid repurchasing it.
Data about your past cash flow and bestselling items is key to helping you identify room for improvement and free up cash accordingly.
6. Build strategic partnerships.
Working with other small businesses outside of your direct competition, but with similar audiences, can help both businesses thrive and grow. Identify complementary organizations you could partner with. For example, a summer camp might team up with a youth sports league since they both cater to families in the local area.
Then, propose a mutually beneficial collaboration between your business and the other organization you’ve identified. Let’s say your spa wants to work with a local haircare store. You may offer to sell their products at your spa, hand out coupons for their business, or feature them in your monthly newsletter in exchange for referrals or sponsorship.
As you test out these strategies, keep your customers top of mind. Scaling your business should free up time to expand your reach and strengthen relationships with current customers, thereby retaining their support and setting a solid foundation for growth.
