Scaling Up Your Business- What Does It Take?


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At some stage or another , most businesses and business owners will consider scaling up their business. Scaling up a business is a decision which involves a lot of different decisions regarding facilities , equipment , pay and technology in order to be effective. However many businesses fail to scale up effectively and could damage their business as a result.

Small Businesses And Sole Traders

Many businesses will start out life as small businesses and sole traders. This is because often these business models suit smaller service based businesses and don’t necessarily need large amounts of infrastructure. In order for these types of businesses and sole traders to be effective , it is important that they operate within their means.

As businesses progress and turnover increases , they may find that they may need to begin to invest more into the business in order to meet the demand for the business that is now being generated. In order to do this , it is important that the business and its directors evaluate the risks and benefits involved before committing to scaling up.

Issues Involved With Scaling Up A Business

There are of course risks and issues that can be involved as a result of scaling up a business. One of the biggest risks associated with scaling up a business is overestimating its profitability.

Overvaluing a business can be risky and lead to high levels of debt if a business is scaled up without planning for the future. Scaling up should not be taken as an impulse decision and requires time and forethought before going ahead.

A common issue which can be associated with scaling up is a lack of clear experience and guidance. This normally happens to companies that have started off small but have seen an increased and noticeable uptake in demand overall. A lack of experience and guidance can lead to a business struggling to make headway after scaling up as well as struggling to meet demand for different items.

How Can Businesses Benefit From Scaling Up?

There are a large number of ways in which businesses can benefit from scaling up. One of the main ways in which businesses can benefit from scaling up is increased profits.

Once a business has established demand and has plans in place to scale up , then they can benefit greatly from scaling up as they will be able to deliver more products and services to a much larger customer or client base.

In addition to this , the business will also gain valuable expertise and experience of operating at increased capacity and will learn valuable lessons as a result of doing this.

Key Tips For Businesses Looking To Scale Up

Scaling up a business takes a lot of consideration and planning. Here are some of the key tips we found that could be associated with scaling up a business:

  • Estimate costs of scaling up and assign a budget where possible
  • Research your competitors
  • Analyse the logistics of scaling up e.g new property , more employees etc
  • Simulate increased sales through your systems to get an idea of how the business would cope and try operating at increased capacity
  • Research scaling up online and take advice from close business contacts

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