That’s a great question, and there are several answers, some of which depend on where you are in your business life cycle. In start-up mode, your primary concern is normally getting to the end of the week with enough cash to pay last weeks bills. Rarely are we fortunate enough to start a business and immediately reach the plateau that requires no further growth. Here I am talking about ‘scaling’ and growth being largely the same thing. Strictly speaking, I would argue that scaling is the repetition of what you are doing, either in the same premises or several new premises. Business growth, on the other hand, would not only include ‘scaling’ but could just be doing more of the same or something new. But for now, here are some basic rules that apply to both.
What we do know is that it’s nigh on impossible to grow (or even change) in any business unless we have the resources to allow that. There could be others, but I have identified 4 primary resources that we should consider when considering growing our business, and they are;
We need the time to do new things that will facilitate the change (that also means we probably need to do something different too). We often need to spend some money. We need to recruit or redeploy an existing team, and we may need space. Let’s take a brief look at each one in turn;
Let’s face it, how many businesses do you know where the majority of people are sitting on their hands with nothing to do, with shed loads of money, a great yet under-deployed team and loads of space with which to operate? None! precisely. So how is that going to work then?
For most people, it’s not just the money that stops their business growing, it’s the time. And I’ll be honest with you, it’s a shed load more difficult to get more time than it is to get more money. And if that is the case, why do we let so many people rob us of our valuable time with their ‘gotta minute?’, ‘can you help with this?’, ‘can you do this?’ Let’s face it, there is no way on earth we would let people have unlimited access to our bank accounts yet we often let them have unlimited access to our time – arguably a far more valuable resource.
So, how do we release time? The first place to look is what we are doing now and making sure we are focusing on the right thing – and that does not mean we spend the whole time simply checking emails. This, in itself, is a monster subject. At the Peloton we love this video – it’s so old school (it even talks about faxes (I so miss the fax)) but it is as relevant today as it was when it was made about 200 years ago.
Managing time is about ensuring our foundation for business growth is set.
Money is next. As I see it there are two ways we can achieve ‘cash’;
organic business growth
investments (or loans)
Organic business growth is the way in which we grow our cash. And that is a factor of the profits that we make, less the money we take as owners, less the financial commitments we have. Unless you are in a highly profitable business you can imagine that it is a slow way to create cash.
So that leaves us with taking investment or going out there and borrowing it. Either way has its merits but what I particularly like about both is that there will be some degree of accountability from either. If you have gone out and borrowed it then the lender will (or at least – should) have applied some due diligence to your business plan and will require some degree of reporting to ensure you are on track. Not a bad thing in my mind.
Investment is a different puppy altogether and requires a mighty tome in its own right. But nonetheless, it can bring not only much-needed cash but potentially, skills as well. Oftentimes, people who are looking to make investment have made money in their own right, love the challenge, and can bring much-needed skills to the party. In my opinion, this can be worth a whole load more than the money, but you don’t need me to tell you to pick your suitor carefully. Make sure you have your ego detection module set to ‘high’.
People. Oh my God, people! It’s simple, people can make or break your business. As you add a new team all the existing relationships in the business have a good old shake. The complexities between everyone increase factorially and it takes resource to manage it. However, there are some basic rules that you can implement really quickly. Look at successful teams in sport. They don’t have loose cannons, they don’t bitch and moan, they don’t tolerate slackers. The primary reason for that is, not only do they have a common goal, it’s also really clear – to win (sorry snowflakes, I’m talking success here when winning is the only option. Runner-up, or great effort despite being 15th simply doesn’t cut it). And this is a new but vitally important skill – Leadership. There are hundreds of stories about great leaders getting their team out of some major scrapes or conquering the impossible – my favorites include Shackleton, Genghis Khan, Julius Caesar and Henry Vth (by Shakespeare). All of whom had clear and defined goals. All brilliant stories, all worth reading.
Lastly, space. Probably last because it is quite binary. You either have space or you don’t. Fixing it is relatively procedural unless it forms part of your proposition and location or some other feature is imperative.
So, with resources in place you can scale (or grow your business). For me, anything other than growing isn’t really an option. So when it comes back to the original question ‘when is the right time to scale my business?’ it reminds of the answer to a similar question ‘when is the right time to plant an oak tree?’ Answer = about 20 years ago. So, best get on with it!
Call me. I love this stuff and could help you get a great plan in place.