Entrepreneurs who launch businesses often face challenges in scaling their startups. Taking a business from small to big or good to great requires planning, resources, cash and perseverance – along with a bit of luck.
According to the Small Business Administration, about half of all new establishments survive five years or more and about one-third survive 10 years or more. As one would expect, the probability of survival increases with a firm’s age. Survival rates have changed little over time. http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf
In order to survive and thrive, a growth plan for small business owners is vital.
“Ideation, product development and the launch phase of a new business often requires a different skill set – and mindset,” said SurePayroll General Manager Andy Roe. “However, if you consider scale as part of your business plan, you can be ready if your business is ripe for scaling.”
For entrepreneurs, growing your business also requires that your key differentiator has value in the market. “Today, many successful small businesses plan for future growth, however, they still need outside, unbiased perspective to evaluate the viability of scaling their businesses,” said Roe. “Mentors, coaches and other outside consultants are important in helping to make scale decisions.”
Having worked with tens of thousands of startups and small businesses for more than 14 years, SurePayroll offers these key steps to build your business:
Begin with a solid, vetted business plan. As the saying goes, plan the work and then work the plan.Often overlooked or underdeveloped, a robust growth strategy section should be part of your business plan. To scale your business, there may be opportunities both within and outside your business. Look for symbiotic partnerships, organic growth opportunities, growth outside your initial product or service offering. Growth plans also may include acquisition of your company or your business acquiring another organization. Think through the various scenarios of where and how to grow and support it with solid forecasting.
Don’t reinvent the wheel every day.
Design standard processes to ensure products and services are executed consistently. If you plan to grow your business, you cannot do everything forever. Processes allow for quality control. Without them, you’ll be siphoning cash out the door due to inefficiencies, internal mistakes – and worse yet, customer dissatisfaction. Customers are difficult to win, but even harder to keep. Once lost, a customer will rarely return.
Identify tools to help you run your business more efficiently and effectively.
Invest in tools to help with repeat tasks. Think through processes to automate things like taxes and back-end processes such as payroll. Software solutions, like SurePayroll, will help to save time and money so you can focus on growing your business. Remember, if you get stuck working in your business every day rather than growing your business – executing a growth plan will be difficult.
Build a strong, supportive culture to scale. Begin with a mission, strong values that support innovation and growth and seek these behaviors from employees, consultants and contractors. Without the right people helping to steer the boat, you’ll never be able to navigate the murky waters of scale.
Ensure access to funding in order to scale. Ideas for growth include new people, processes, products or internal tools. Without access to capital, small business owners may find themselves out sold, undercut and pushed out of the market. Whether its venture capital funds, SBA loans, bank loans, angel investors or other funding options, make sure you know what’s available to you so you can hit the ground running when it’s go time.
Continuously work to understand your customer and network in your industry. Things change quickly in the marketplace. Entrepreneurs who get stuck running the daily operations can lose touch quickly with their customers and networks. Scaling a business means understanding the market needs – and when the time is right to scale up.
Don’t go it alone. Identify coaches, mentors and other outside resources to help nurture and grow businesses – people have been there, done that and got the t-shirt really rings true. While businesses solutions change, key learnings from others will save time, money and stress as you move through the business development cycle.