Starting a business can feel like a whirlwind. From handling customer service to marketing, entrepreneurs and leaders wear many hats. Despite doing whatever it takes to grow your business, one in five businesses fail within the first year. Yet, for entrepreneurs with the right purpose, passion, and market, growing a business can be the reward of a lifetime.
Once your business is established and moving in the right direction, setting goals for what’s next can be challenging. How do you know when it’s time to grow your business? Are you willing to face fears of failure and change in order to put yourself and your business out there?
There’s something really satisfying about doing it all for your business. When you know that things are done right, in the way you’ve always envisioned, you feel confident about your business’s success. It’s also possible that fear holds you back from growth and you have the mentality that unless you’re doing it, it won’t be done right. In either case, it’s simply impossible to scale your business alone—it requires a team, delegation, strategy, capital, and marketing.
If you’re preparing to take your business to the next level, there are some factors to consider in order to determine if you’re ready, including your own personal mindset. In this article, you’ll learn how to decide if it’s time to grow your business and the top proven methods for scaling successfully.
- 1 in 5 businesses fail within the first year and 50% fail by year five. What a business owner does in the first five years of growth is pivotal to the company’s success.
- Nearly half of small businesses fail because of low market demand and running out of capital.
- To greatly improve your chances of success, being in an emotional and logistical position for growth is critical. This starts with your own mindset and willingness to take on new challenges.
What Are the Signs You’re Ready to Scale?
A common problem for entrepreneurs who want to scale their business is doing it too quickly without having an intentional strategy for growth. If your business or mindset isn’t in the right place for growth, scaling will be impossible and may even hurt your business in the end.
According to a report by CB Insights that analyzed 111 startups, the top reasons for failure were:
- Ran out of cash/failure to raise new capital
- No market need
- Got outcompeted
- Flawed business model
- Regulatory/legal challenges
- Pricing/cost issues
- Not the right team
How Do You Know You’re Ready to Start Growing Your Business?
Make sure you have all of these factors in place:
- Established brand: You’ve established your brand and have received positive feedback on your company’s purpose and ability to satisfy customers. Metrics for success will vary depending on the industry, but getting feedback from customers on how they view your brand in comparison to your competitors is useful. Using tools like Google Analytics will help you to understand the business’s website engagement rates, which can be compared to benchmarks in your industry. Social media platforms also have tools to measure engagement and growth, which should be improving month-to-month.
- Cash flow: You’re financially prepared to grow and have the funds necessary to scale your business. You will be able to cover supply and inventory costs, new hires, hardware and software, workspaces, and any other factors that will be necessary for you to grow your business. The amount of cash needed to grow a business varies, depending on your industry, product or service, and set-up. Experts suggest having at least three months of expenses set aside before investing in growth.
- Demand: Is there a demand for your product or service? If your industry is growing and will continue to do so for the next five years or more, then it may be time to scale your business. You can gauge demand by surveying your customers or reporting a consistent increase in sales.
- Motivation and Mentorship: It may be a good time to grow your business logistically, but is it something that you want to do as a business owner? Make sure to think about why you want to scale up and whether or not you are prepared for the extra work it will take to make growth possible. If you don’t have one already, find a mentor that will help you through this process. Research by SCORE found that 30% of entrepreneurs who had just one interaction with a business mentor reported growth in their businesses.
- Infrastructure: Do you have the tools and infrastructure needed to take your business to the next level? If not, how will you get them? Make a list of what’s needed for your day-to-day processes, such as office space, equipment, supplies, software, and team members in the right seats. Also consider outside vendors, such as accountants, attorneys, insurance brokers, and tech support.
How to Grow Your Business: 12 Proven Methods
If you took a hard look at your business model, customer demand, and finances, and decided you’re ready for business expansion, then follow these proven methods to take your company to the next level:
1. Hire (and Retain) Team Members
Before you can scale your business, you need to hire enough employees to handle the increased demand. As a business owner, you can no longer put yourself in the center of day-to-day operations—you have to focus on growing the business by stepping out of the daily company processes.
As you begin the hiring process, ask the following questions:
- How many employees do you need to hit your scaling goals?
- How many employee tiers will you have in your organizational chart? For example, leadership, managers, and team members are possible tiers of your organization. Do you have separate teams for marketing, product development, customer service, and content?
- What is your growth/hiring timeline?
- How will new hires increase productivity and profits?
- What specific responsibilities can be delegated to your new hires?
After determining hiring needs, attract and retain A-players by:
- Fostering a sense of teamwork and camaraderie.
- Using people-oriented leadership to build trusting relationships.
- Providing employee recognition and rewards.
- Offering training and continued education.
- Collaborating with team members and leading by example.
2. Delegate Tasks
Time is a business owner’s most valuable resource, so in order to grow a company, delegation is critical.
Gallup research shows that when business founders practice high delegation, they can generate better business growth than leaders who get lost in day-to-day operational processes. When Gallup surveyed Inc. 500 CEOs, they found the average growth rate among high delegators was 112 percentage points greater than CEOs with limited delegator talent. High delegators also generated 33% greater revenue.
Begin delegating in order to maximize your time and shift your focus by:
- Making a list of tasks that require your time and attention versus tasks that can be completed by team members.
- Selecting team members who are best suited for each delegated task.
- Setting clear objectives of success for each task.
- Providing supportive feedback and communicating appreciation.
3. Develop a Marketing Flywheel
The marketing flywheel model is one of the most effective ways to grow a business because it focuses on a positive customer experience that leads to repeat buyers and new customer referrals. This marketing strategy works to attract, engage, and delight customers so there’s a constant stream of customer acquisition and growth.
In Good to Great, Jim Collins describes this marketing strategy as pushing a flywheel, a heavy device that builds energy with its rotational momentum. Each turn of the wheel generates more power, making it easier to turn over time as it reaches its full, unstoppable speed.
The three phases of the marketing flywheel are:
- Attract customers by solving a problem: Your business needs to provide value for your customers by offering a solution to their common problem. Clarify how you serve as their problem solver with social media posts, blog posts, videos, free trials, and paid ads.
- Build a connection with customers through engagement: Excite and nurture your audience in order to build a meaningful connection that will keep customers loyal to your business. To build engagement, send customers personalized messages, provide free guides or samples, introduce a loyalty program, and invite them to free webinars or group discussions.
- Delight your customers with exceptional service: When your customers are delighted by every phase of the buying process, they’ll be back again and again. Plus, they will promote your business to friends and family members. In the end, you want an infinite cycle of happy customers. Delight customers by streamlining operational processes, providing great products, strategizing prices, and making your mission clear.
Amazon has grown tremendously over the last decade by using a marketing flywheel. The business focuses on the customer experience to keep current customers and gain new ones. This attracts more third-party sellers, which expands product offerings, creates more competition, and reduces prices, thereby generating even more customers and sales.
4. Clarify and Articulate Your Purpose
As you prepare to grow your startup, take time to clarify your company’s purpose so that it can be easily articulated to consumers, investors, and team members. Start with why—why does your business exist and what purpose does it serve in the marketplace? It’s a simple idea that leadership expert Simon Sinek has been lecturing about to millions of people across the globe.
Once you’ve nailed down your “why,” write it down and post it everywhere—in your office, on your website, on your social media pages, and in your employee handbook. Always go back to your purpose and let it ground you as you continue to grow.
To clarify your purpose, get out a notebook or blank document and do the following:
- Write down what drove you to start your business.
- Explain how you plan to serve people with your products or services.
- Visualize who you’re serving and connecting with through your work.
- Consider how your business provides value to customers and the community.
- Pinpoint how you fulfill your purpose. What products or services are necessary to make it happen?
Apple’s “why” was to push the envelope, to rethink how computers were created and designed. As shown above, their “why” wasn’t about their products, but their purpose, which was reflected in their marketing, branding, and design.
5. Provide a Solution
Customers will come back to your business over and over again if you’re solving a problem for them. They need to see value in your product or service in order to spend their money on it and tell their friends about it. Make sure you’re offering a solution and make that crystal clear to potential customers. Then ensure that it delivers, and circle back to offer support or gather feedback.
Think about Warby Parker as an example. On their About page, it says, “Every idea starts with a problem. Ours was simple: Glasses are too expensive.”
The company offers a solution to the complicated and expensive process of purchasing prescription glasses. Customers no longer need to purchase through their ophthalmologist or shell out hundreds of dollars to update their prescriptions. Instead, Warby Parker offers inexpensive and stylish glasses that can be purchased online or at one of their stores.
6. Implement Operational Processes
To grow your business, you’ll need the right operational processes in place. Tasks that you once handled yourself will have to be streamlined and delegated so they can be performed at an accelerated rate to meet demand.
To implement scalable processes, follow these steps:
- Write down the current processes used in the business and consider a customer’s buying experience from start to finish.
- Determine which processes are working as is and what needs to be changed or added to grow the business.
- Decide how to automate these processes in order to save time, money, and energy.
- Figure out what technology, software, plug-ins, and management tools you’ll need to implement scalable processes.
- Test out the finalized process and record it step-by-step with as much clarity as possible. This will be used as a playbook for future hires as the business grows.
7. Perfect the Customer Experience
In a Goldman Sachs video, Warren Buffet said that his best advice to a business owner is to “never stop thinking about how to delight your customer.” He said that no company has ever failed when it had millions of delighted customers, and you get them one at a time.
Business growth comes from excellent customer service, which means that every step along the way, from browsing to checkout, is streamlined.
To perfect the customer experience, be sure to:
- Ask for feedback and take it seriously.
- Connect with customers using direct messages, emails, and social media posts.
- Create a sense of belonging with the tone of your content and messaging.
- Address flaws in your system immediately.
- Go the extra mile for customers, providing loyalty perks, free webinars or tutorials, informative content, and support when needed.
8. Show Credibility
Customers will see right through phony claims and disingenuous company missions. To succeed at growing your business, you need to prove that you’re the best option in the industry with stats, testimonials, and customer reviews.
To maintain credibility, do the following:
- Ensure that transactions and customer experiences are always consistent.
- Use social media accounts to relay information about your business, products, and customer successes.
- Showcase your success—even the small wins.
- Share photos of customers using and loving your products or services.
- Post testimonials and positive reviews.
- Keep improving your products and customer service.
9. Evolve Constantly
To grow your business, you need to adapt to industry changes and customer needs quickly. President of Babson College, Kerry Healey, suggests that business owners shouldn’t be discouraged when the business they end up with isn’t the one they pursued originally. “So often, you encounter difficulties, you encounter failures, and the important piece is to learn from each of those very quickly, to pivot, and to move on to the idea that works,” she said.
Do this by:
- Reevaluating your company mission and goals every 90 days. Pinpoint what’s working and what’s not working.
- Responding to changing customer needs with new products, services, and processes.
- Asking for feedback from loyal customers and striving for constant improvement.
10. Know Your Competition
When determining how to grow your business, spend time researching your competition.
Ask the following questions about competitive brands:
- How do they interact with customers?
- What marketing strategies are they using?
- Do they have a loyalty program or membership?
- How are they pricing their products or services?
- What problems are they solving for consumers?
- Do they have a clear purpose and how do they communicate it to consumers?
As you answer these questions, highlight what brands are doing a better job than you and emulate their processes. If you’re dominating in certain areas, lean into that and highlight it on your engagement platforms. Use your competition as sources of inspiration to attract more customers and scale your business.
11. Take a Stance
Consumers are becoming more and more interested in the impacts that businesses have on the community and world. According to research by Accenture, 60% of consumers say their priorities change as a result of things going on in the world, such as climate change and social movements. This suggests that they are more likely to support a business that stands for a specific cause, whether it’s sustainability, food insecurity, equity and inclusion, or labor practices. Taking a life-centric approach to your company mission and branding will help you build deeper connections with customers and promote loyalty.
Think about TOMS as an example. The shoe company gives one-third of its profits to grassroot organizations in order to create a “more equitable world,” according to its purpose statement. At the end of each year, they provide an “Impact Report” that explains where money was donated and how it made a difference in communities across the globe.
12. Employee and Leader Development
Varne Harnish, author of Scaling Up, said in a Bloomberg lecture, “If you want to 10X the company, you have to 10X the people.” He explained the importance of employee development across the organization, improving employee knowledge, and allowing them to grow within the company as leaders.
Here are ways to empower employees and create leaders within a company:
- Have team-building workshops at least once per quarter.
- Focus on building specific areas of knowledge that are used within the company and will improve the customer experience.
- Promote educational opportunities for employees, and if possible, provide a stipend for attending conferences, workshops, and classes.
- Create a company book club that focuses on one book monthly that contributes to personal and professional growth among team members.
In the last 24 months of Steve Jobs’ life, he focused on the development of Apple University, an executive training program and instructional facility for Apple Inc. employees. The goal was to help the company succeed without Steve Jobs’ genius, which the founder created with his legacy in mind. With education, employees are better able to think and make decisions like Steve Jobs, thereby moving the company forward.
Overcome Self-Limiting Beliefs for Growth
Before tackling the logistics of growing a business, make sure you are emotionally ready for growth, too. It’s important to recognize your own emotions, including feelings of fear, uncertainty, and excitement, and work through self-limiting beliefs that will hinder your progress.
Growth and learning require an entire mindset shift—a growth mindset that allows you to focus less on the outcome and more on the learning and development process. This way of thinking will enable you to embrace new challenges and learn from mistakes.
Let go of fear and ditch perfectionism by:
- Appreciating the process.
- Serving the people around you.
- Recognizing that success comes in many forms.
- Inviting collaboration, mentorship, and constructive criticism.
Read this article on how to achieve a growth mindset to better prepare yourself for both personal and professional improvements.
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