Scaling and growth are often conflated, but scaling differs from growth in one major way. With growth, companies experience increases in numerous areas of the business, including both revenue and expenses. With scaling, revenue increases significantly without expenses increasing to the same degree.
If that sounds like a difficult feat to pull off, that’s because it is. A great deal of planning, fundraising, and development is required to get your business ready to scale. You’ll need to get your processes and support ready to manage different levels of revenue if you want to see impressive results. Here are a couple of tips to keep in mind to help your company scale as quickly as possible without major hiccups.
Have Flexible Hiring Options in Place
In a perfect world, you would be able to advertise and fill a job posting with a quality employee within days. As your business scales, this perfect-world scenario is even more appealing. Reality, however, is very different. Especially with the current competitive job market, it can take months to find the team members you need.
This delay can pose a huge problem when you’re trying to ramp up your operations quickly. A single employee departure could make it difficult to cope with increasing business activity. To avoid getting into a situation where your scaling plans become delayed due to understaffing, think outside the traditional hiring box. Understanding your options in advance can save you a lot of time and frustration.
One of the easiest things you can do is identify roles that could be adapted to remote workers. If you have positions that can be done remotely, look at some vendors that would enable your business to hire across international borders. Not only does this enable you to offload HR responsibilities for those employees, but it lets you cast a much wider talent net.
For remote HR outsourcing, there are two main options: an employer of record and a professional employer organization. When making the EOR vs. PEO decision, there are a number of factors to consider. As a general rule, you would use a PEO for hiring remote workers in a country where you already own a legal entity. If you choose to hire global employees, you must retain an EOR unless you have branch locations in each country. If you don’t, an EOR with physical locations in the countries where you wish to hire can employ workers on your behalf.
Alternatively, you can build relationships with quality independent contractors and have them on standby to perform tasks when needed. This approach doesn’t require an EOR’s services and can serve as a stopgap when the hiring process stretches on for longer than intended. Sometimes, you might even find contract work to be a viable long-term alternative to full-time employees, but be careful to avoid issues of misclassification.
Flexibility in general is useful when scaling, but it’s especially advantageous with regard to personnel. Even if you never end up using your hiring contingency plans, you should have them ready. Failure to do so could halt your scaling efforts just because of a couple of unfilled job openings.
Create Robust Processes Before They’re Needed
Scaling a business requires a great deal of planning and setup. The processes and support you have in place now might work perfectly well for a lower tier of revenue. But once you start scaling and that revenue ramps up, you need your processes to be ready to support that.
If you end up modifying on the fly as the situation dictates, your product or service quality could suffer. You could also be operating inefficiently and therefore not scaling as quickly as you might have otherwise. So unless you want to lose all your increasing net income to staffing expansion, you should assess your current processes.
For example, consider billing. A business with low sales can probably get by on a low-tier accounting software subscription with limited functions. It might exclude recurring invoice options or certain integrations with other supporting software. The lack of integration options alone could require your bookkeeper to perform some redundant tasks to keep the programs balanced with each other. This scenario will play out in two ways depending on when you upgrade your subscriptions to include those more powerful functions.
Let’s say you wait for revenue to ramp up before you upgrade. Your billing staff will likely have a tedious system of reminders and notifications in place to keep invoices straight. That alone could negate any cost benefit of delaying the upgrade. But wait, there’s more. There is a great deal of work required to upgrade, set up new processes, and combine duplicate information between the programs. Depending on how long you wait to do so, that work could take hours, days, or weeks to complete.
So before you consider your processes “good enough,” ask yourself how they would hold up if revenue doubles. How about if it triples? Gather any internal data available, and use it to project necessary changes. Having your processes and tech prepared ahead of time for a revenue influx can save a massive amount of time, money, and frustration later.
Preparation Is Everything
Scaling is something that rarely just happens as a natural course of business expansion. It usually involves substantial planning and preparation of funding, staffing, and processes.
So before you attempt to scale, establish a solid footing. Make sure your operations are stable and allow for flexibility. Doing so will enable you to scale at a quicker rate and not be derailed by unexpected circumstances that arise throughout the process.