How long is a business in growth mode or a startup really a startup? It's an important question all businesses should ask. Failure to do so can lead a business to scale up too soon, often resulting in business failure. Understanding which stage your business is in can help determine the appropriate time to scale — and do so successfully.
When is the right time to scale a business?
Planning for growth is essential but scaling a business too soon can spell disaster.
Here are five signs signaling it's time to scale up, and tips for optimizing growth strategy.
Increase in Demand
Do customers keep asking for more? Are you turning down customers or clients due to lack of employees, time or inventory? It may be time to scale. However, do due diligence before jumping on the expansion bandwagon.
You’ve Built a Track Record of Profitability
While “profitable” is a qualitative measure, consistent and predictable profits, costs, and stability suggest there are opportunities to grow.
Competitors are Growing
If your competitors are growing, there are likely opportunities in the industry for you to as well.
Just don't confuse an increase in visibility or office space for true growth.
You Can Delegate Without Thinking Twice
If you’re seriously considering expansion, are you comfortable handing reins to someone else? If you can’t answer that question confidently, you might want to think twice.
Solid Data and Financial Processes
Being able to scale is not the same as being ready to.
To make the leap, data is essential to good decision-making.
Instead of asking yourself “Am I ready to scale?” a better question to ask is “Am I ready for a new growth? Can I handle more?” Can you handle more customers with your current systems, tools, and people?
Analyzing data and financials can give you a clue.
We know building systems, procedures and team readiness doesn’t seem like growth, but that side of your company has to evolve too. Learn more about scaling a business for growth, and the strategies to do it right.