Typically, entrepreneurs start the company as a one-man band, doing all the essential tasks for the business themselves on a daily basis. Passionate business owners are driven to see their company grow and are able to accomplish everything that needs to be done.
It does not really matter what the task is, they would do it and make sure to do it well. Talking on the phone, email communications, coordinating with suppliers and customers are all done by you, there is no job too great or too small. You’re a jack of all trades during the birth months of your business.
Related Reading: How to Start a Business With just $50
Signs it’s time to expand your business
There can be many different reasons to scale your startup. Of course, all these reasons should be positive, you do not try to grow your business if you are struggling with reaching your current goals.
Achieving and surpassing the breaking even point of a company is the first hurdle any business needs to conquer. That is when the business produces income equal to its expense. Positioning your e-commerce business on Amazon will give your products more exposure.
Did you know that over 70% of online shoppers do their shopping on Amazon?
Don’t miss the boat by not selling on the Amazon platform. Sign up for Amazon FBA for automation to make the selling process easier. However, Amazon charges fees for the privilege of using their FBA program. Make sure to take into account all the Amazon FBA fees when computing your profit margin.
Of course, to be profitable, a company needs to overcome this hurdle many times over for it to even be considered a success. Consider your reasons for expanding your business and try to assess if you’re ready to handle even more responsibility.
Growing Industry
If you have effectively positioned your business in a growing industry, then logic dictates that your business will grow to correspond to the increased demand of your industry. E-commerce will be booming, 90% of all shopping will be done online by the year 2025.
However, if you as the business owner has not prepared for that expected growth then more than likely your business will be left behind. It will still grow but not at the same pace that other companies will be experiencing because of their preparation.
In case your industry is not projected to increase, it is still possible to expand your business by future proofing your business. Research your target market and find out what new products or services they would be interested in.
Make a move to offer those new products and services to your customers. You can prove those projections wrong and create growth for your business through innovation plus hard work.
Overwhelming workload
Once your business starts gaining traction, and you are unable to do all the necessary tasks because you are just too busy then it is time to consider hiring some help.
When you get to the point that you’re generating too much business for you to handle alone, you need to consider hiring competent people who will eventually form the pillars of your organization’s team.
With additional manpower, you can then afford to take on more projects to continue the growth of your business. Even if you have just one employee in your payroll you and that person technically still make a team.
There are millions of companies that only have one employee, and they are able to attain success with just an extra pair of hands. Don’t rush into hiring people.
Carefully select your first employee and measure the workload to see if you will need any more help. Your team would need to be conditioned to handle new challenges and be expected to meet and exceed set goals.
Other posts that may help you:
- Outsourcing for Beginners – Can it Work for You?
- Elon Musk Leadership Model: 5 Tips to Manage an Effective Team for Your Business
Consistently Meeting and Exceeding Goals
Once you have a reliable team in place that has proven itself to meet set goals that even exceed your expectations, then you can again consider scaling your business to the next level.
Measuring the success of a company can be somewhat tricky, it really depends on your field of expertise and the niche that you’re in.
In e-commerce, if you have had success in launching your first product and this has continued for at least four or six months of consistent sales, then it could be time to consider adding a second product.
Some e-commerce businesses even the ones solely found on Amazon launch a line of products at the same time, but that can only be successful if they are related to a specific niche.
Once you have succeeded in selling your first products, then you can add another one and market that the same way you did the preceding ones. Completing the appropriate research is mandatory when selecting an additional product.
If you’re selling on Amazon, your customers can also become aware of your other products through headline search ads which feature specific brands of products. It is a fantastic method to give your products more exposure.
Make sure it is within the same niche of your other products. Then you would also need to calculate lead times for the new product and make sure that you set inventory minimums.
Inventory minimums will serve as a warning to reorder more merchandise from your supplier. Secure a backup supplier in case the first one gives you problems, it is always good to plan for worse case scenarios.
This practice also applies to other businesses. Do not bite off more than you can chew. The consistency of delivering quality products and always providing excellent service to customers will make them always line up to buy more. Be prepared to fill that need.
Golden Opportunity
Once your business has been consistently performing and you have a nice steady flow of income from your primary business, then you can invest or open your business model up to new ventures.
Again, only do so if there is no possible way for this second revenue stream to interfere or hinder the growth of your primary business.
For example in e-commerce, you would need to market your products and to do that you need to create marketing material like a blog for your website. If you personally write articles that will compel consumers to buy your product then that’s great, mission accomplished.
However, if your blog generates more internet traffic than you were expecting you can then monetize the site and make extra income through ads. You can then hire a full-time content writer that can write blog posts every day to continue that additional stream of revenue.
If properly managed and marketed the blog can grow in popularity that it becomes an authority or influencer for that niche and fellow sellers will pay your blog to plug in their product. Other blogs will also pay you for the privilege of writing a guest post on your immensely popular blog.
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Continuous Flow of Customers
Making sure you have consistent customers buying your product is a practical process for an e-commerce business.
Research the best products for your niche, make sure you source top quality merchandise and initiate effective marketing campaigns will ensure you have a successful product launch.
Optimising your product listing, utilizing influencer will help rack up the sales of your product to climb the search engine results page organically.
Then you can supplement that with automatic and manual PPC campaigns to mine and filter for useful long tailed keywords to bid on for your product. This also applies to any other business model, you need a steady stream of customers before you can even think of expanding.
If your business doesn’t seem to be running out of customers and is even having to refuse additional projects, then it is time to consider taking your business to the next level definitely.
In case you are also running out of products sooner than you anticipated then it is also another indicator that you need to scale your business.
If you have out of town customers that wish you would open a store in their area and you receive this kind of feedback often then that is also another reason to grow your business. The customer is always right as the famous saying goes.
This is not just true for customer service, but that saying can also apply to the increased demand customers have for your service or products that you provide.
The frequent requests of customers to see you in their local area is a not so subtle hint of the need to scale your business accordingly. Maybe you can even consider franchising if that is applicable.
Sufficient Funds
It will be ideal if there are already pending projects that your new employee would be assigned to handle. The corresponding revenue generated from the project would more than cover the expense of scaling your business.
In case that is not possible then all you need to do is make sure you have enough revenue and cash flow to pay for the growth of your business until the time it pays for itself. It may take several months before you see an initial return from your investment.
You need to be prepared to shoulder the additional operational costs that will be incurred because of the expansion. There will be unexpected costs and possible problems that you will have to prepare for during an expansion.
Proper financial preparation is crucial for a successful expansion. Keeping your business model profitable for at least three years will ensure you will have enough cash flow to sustain your business through to a prosperous expansion.
Efficient Systems in Place
Attempting to grow a business without the proper framework in place is destined to be an expensive lesson or worse even fail. Setting up the appropriate knowledge sharing tools to help make onboarding new employees more efficient is essential to scale a business.
Utilizing knowledge sharing tools and keeping it updated with the latest integral information on company processes will also help current employees when they need that information.
Make sure to encourage, maybe even reward knowledge sharing in the company and reprimand those that hoard business knowledge to themselves.
Build an internal database of detailed step by step guides on how to execute various tasks will ensure your business will run smoothly even if the person assigned to that task is absent or on leave.
Create a daily checklist of the necessary workflow and how often specific tasks need to be done on a daily basis. Every employee should be made aware of various functions that need to be done on a regular basis.
Each one should be responsible in making sure each aspect is accomplished accordingly. While there should be a hierarchy in your organization. Specific tasks need to be done, and a buddy system can be incorporated to ensure every essential task is promptly done.
There are many other systems and scenarios a business owner must prepare for when expanding.
In case there is a massive influx of sales make sure your team is ready to handle and process each order correctly by creating an internal procedure on how to handle mass orders.
In case there is a huge order from a VIP account, establish procedures to handle that scenario and prepare a location on where to store all that inventory. There is no need to rush in the expansion of your business. Slowly but surely, just like the story of the tortoise and the hare.
Conclusion:
Every entrepreneur dreams of building a successful business. Through dedication, innovation, blood sweat, and tears, business owners passionately nurture their companies to reach goals and fill or even exceed their potential.
Utilize knowledge sharing tools to create a permanent database for the internal use of your company. Establish efficient and effective business processes for any and every scenario in your industry to help ensure your business grows every single day.
I’ve handpicked a few guides for you to read next:
- Elon Musk’s Advice for Starting a Business
- How to Cheat your Way to Success As An Entrepreneur with Brian Wong
- The Simple Success Secrets That Almost Everybody Overlooks
- 15 Business Lessons You Can Learn from Amazon Founder and CEO Jeff Bezos
- 4 Things Every Startup Should Invest In
Guest Blogger: Nathan Sharpe is the entrepreneur behind Biznas, a blog where he serves practical business advice and tips to readers. Learning and helping others learn is his passion.