John Lincoln — February 5, 2020 These days, competition in the business world is more cutthroat than ever, and entrepreneurs need to do everything in their power to stay ahead of the curve.
Your product may be selling like hotcakes, but the strategies used for scaling a business is what separates a small startup from a profitable multi-million-dollar organization.
Unfortunately, the sad truth is that 30% of new businesses fail during their first two years.
If you want to scale your business to $ 1,000,000 per month in MRR (monthly recurring revenue), there are a few key strategies you can implement that can significantly help you unlock repeatable growth channels and boost your company’s performance.
In this article, I’ll share some of the lessons I learned from my own experience scaling a business.
Hire Employees in Advance to Ensure There is Plenty of Time For Training
Planning ahead is always a smart business move.
Not only will hiring additional staff ahead of schedule allows you to pursue more revenue streams, but a spread-out workload prevents overworking of your existing employees.
To make your hiring more efficient at scale, be sure to identify any necessary training requirements early-on and have an onboarding plan ready to go.
Ultimately, the success of each new team member is contingent on the quality of your company’s onboarding process. You need to invest at least as much time in training your workforce as you do in finding them.
Place Emphasis On Culture and Employ Experts to Ensure You Have Happy People
The best leaders often look beyond the skills and qualifications a hire has on paper and instead focus more on cultural fit.
They seek people with a set of values that mirror that of their company culture and are comfortable with the policies, procedures, and expectations the organization already has in place.
But, screening for cultural fit is only the first step in the process. Once you’ve hired a team of star employees who are in-tune with your corporate culture, cultivating and maintaining that culture takes effort.
To ensure their passion and quality of their work doesn’t decline, be sure to have experts regularly check in with your employees to help identify and manage any pressing issues. Setting up weekly or biweekly check-in calls usually does the trick.
Focus Heavily On Customer Success and Set Up a Process to Check In With Customers Often
The success of your business is dependent on the success of your customers.
If customers succeed by using your product, they’ll continue to use your product, and thus, your business will thrive. Of course, doing so requires being proactive, not reactive.
Unlike customer service, customer success works to pinpoint problems and opportunities by leveraging as much information as possible about the customer. It even helps businesses gain a better understanding of the customer experience and lifecycle so they can better it.
You can stay in touch with customers using several checkpoints spanning surveys, targeted email campaigns, and social media.
Think About Office Space Ahead of Time
With growth comes the need for space where your business can thrive. And, if you’re going to scale your business to $ 1,000,000 per month in MRR, then you’re going to need plenty of room.
Start documenting your wants and needs and establishing a timeline for your business. From there, determine a preliminary project budget and start comparing potential markets. Weighing your best space options requires a ton of in-depth market research.
Your timeline will depend on several factors, including market conditions, availability, scheduling, and company size. To avoid any delays, you should allow a six-month safeguard between research time and move-in date.
Onboard Top People to Take the Workload Off You
Scaling gives you the opportunity to onboard the best of the best, so choose wisely.
Each new hire should be more talented than the previous one. By sticking to this scaling principle and hiring only A players, you’ll be building a team in which the collective skill set of your company will inevitably expand and improve over time.
Recruiting people who will be able to lead teams in the future means a more flexible workforce, and will relieve you from bearing the weight of a heavy workload.
Focus On What You Are Best at and Outsource Everything Else
Many of us fall into certain patterns, where we become so preoccupied with managing day-to-day activities that we don’t have the time to utilize our real talents.
With customer expectations rising year after year, high-quality work will always be in high demand. If you want to deliver high-end results worry-free, then you’ll need to start playing to your strengths and delegating everything else to the rest of your team members.
After all, not everyone is a fit for certain tasks. Once you admit that, you give yourself a chance to pursue the jobs you’re good at or want to improve on.
And, while outsourcing requires added costs upfront, if you’re giving them to someone who can perform them more efficiently, you’ll end up saving money in the long run.
Get a Line of Credit to Be on the Safe Side
Having a business line of credit is essential for any modern company. Originally established to provide businesses with needed capital, a business line of credit functions much like a business credit card or personal line of credit.
Unlike a traditional loan, where you essentially just receive a lump sum of cash that needs to be paid at a fixed or variable interest rate over a period of time, the business line of credit allows you to access funds as you need them.
The ability to continually access funds facilitates greater control over your organization’s finances and grants you the freedom to continue to make growth-driven decisions.
Create a Clear Model For Cash Flow
According to a U.S. Bank study, 82% of a company’s failures can be attributed to poor handling of cash flow.
While there are multiple factors at play when it comes to finances, if expenses surpass your cash, then you have a cash flow problem on your hands.
To avoid this issue, build a cohesive cash flow model. Your first step should be finding out how much you’re spending and where you’re spending it.
Then, start categorizing your expenses and micromanaging your spending. You never want to lose sight of the cost-benefit of each expense, no matter how small.
Wrapping Up
Scaling a business effectively truly begins in the earliest stages.
By implementing the strategies mentioned above, I can assure you that these tried and tested methods will undoubtedly help steer your business in the right direction.
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