One of the biggest indicators that it’s time to scale your business is the presence of an opportunity. The commercial landscape here in Australia, and all over the world, is shifting. An agile mindset will help you to identify opportunities to optimise your offering, expand your customer base, and, most importantly, increase your profits.
An opportunity may take the form of something like a partnership proposition, a new high-volume client, entry into a fresh market, or a gap in an existing market, for example. Whatever form it takes, a new opportunity will do one of four things.
Running a successful business is all about people. There are six basic human needs all people have, and if an opportunity allows you to meet one of those needs then it could be worth exploring.
Those needs are:
The key thing to remember here is that it's about the customer. Will this opportunity allow your business to meet a customer need — in a way your competitors aren't? For example, in a more convenient way, faster, or for a better price.
Expanding your potential customer base is an obvious way to grow revenue. For example, if you own a clothing store, you may decide to stock additional sizes. If you run a restaurant, you might explore the opportunity to rent a market stall outside of your local area and increase awareness of your brand.
For example, if own a dog grooming company and a customer enquires as to whether you also offer cat de-shedding — you already have the skills and tools to incorporate the service.
There are occasional silver linings of lockdown. For example, if you own a bar that serves cocktails in jars, you’re already equipped to immediately start selling takeaway drinks if a lockdown hits your city – unlike most other bars.
A new opportunity is likely to require an investment of time and resources, as well as taking on more risk. However, not every new opportunity will be a golden ticket to sustainable growth. Keep reading to discover the next two questions you should ask yourself when considering whether to grow your business.
This is a big one. If your success is derived from a high standard of service, you won’t want to compromise this in favour of growth — as you risk losing clientele. Although an opportunity might make sense from a cost and sales efficiency perspective, it's always worth considering how it will impact your customers' experience.
Say you’re a boutique local business that makes and sells sustainably produced tote bags. You're known for enclosing a personalised thank you note in every order, explaining where the materials come from. You’ve earned a number of loyal customers by going above and beyond with personal touches, and word-of-mouth has won you countless sales. If you then chose to outsource your shipping to a warehouse overseas — dropping the thank you notes and extra acts of service — you'll lose your point of difference and risk becoming just another bag manufacturer.
Instead, look to embrace an opportunity for growth opportunity when you know you’ll be able to continue delivering the same incredible customer experience your brand is known for.
Many business owners assume that growth is a natural commercial evolution that simply makes you more money, when in fact there are a lot of costs associated with scaling up. For example, will you need to hire more floor staff if you expand your café? Will you need to invest in a second mobile dog wash if you expand your service area? Are you going to need to order ingredients if you expand your menu to include vegan items?
Once you’ve established the cost of embracing a new opportunity, you need to compare the cost of scaling up with the potential revenue earned. Only then will you know if the possible return outweighs the risk.
Before committing to anything, ask yourself this: do you already have cash allocated for this expansion? Does your financial strategy incorporate solutions to unnecessary costs? Does your business have a healthy cash flow?
If you answered "no" to any of these questions, it might be worth investigating ways you can fast-track access to your payments, keep more money in your business, and capitalise on low transaction fees. Zeller Terminal can tick all of these boxes.
Aside from questioning your business, you need to question whether you and your team are ready to manage the challenges and demands of scaling up. This can mean a heavier workload, longer hours, and more stress, just to name a few. Before you commit to anything, make sure your team is aware of the expectations that come with expansion. While it’s normal to feel nervous or have reservations, if you can answer these questions with confidence, you’re ready to take the next step in your business plan.
Regardless of whether you’re ready right now or not, a successful business owner is always thinking about strategic growth opportunities. You should always be striving to evolve alongside the market, keeping your customers’ wants and needs top of mind to ensure they’re not lost in the pursuit of success.
At the same time, you should also be aware that it takes money to make money. This means maintaining a clear picture of the resources you have and those you need to maintain long-term growth. Having a growth plan in place will help you weigh up the risks and returns. By detailing the opportunities, risks, capacity, and capability, as well as how the growth will be funded will help you better understand the implications of growth, putting you in better stead to make an informed decision about how to proceed.
Above all, don’t forget to enjoy the incredible achievement of scaling up your business. It means you’re doing something right, which is worth celebrating in itself.
Now that you know how to identify whether your business is ready for expansion, it’s time to learn how to effectively scale up. Sign up to our Business Blog to cash in on valuable insights sent straight to your inbox.
Get fresh resources and updates in your inbox every fortnight.