Scaling up your business? Read this first!

Scaling up and down in the business world allows us to grow and shrink our small and medium enterprises to fit the workload coming through the doors. In times of recession, your business can become smaller to accommodate rising costs. On the other hand, scaling up helps you to match new production expectations as your business grows.

The Benefits of Scalability

In the modern marketplace, only organisations which are able to grow and shrink can adapt to the constant changes in product market values and consumer trends. Without this ability, a business is at risk of becoming stagnant, failing to evolve, and becoming forgotten. You should not underestimate the power of scalability.

Scaling your business has multiple benefits, including:

• Improved efficiency as you respond to orders placed
• Less wastage, since you don’t overproduce
• Enhanced employee upskilling occurs in smaller business environments
• Greater profits exist in larger business models
• Switching between the two keeps a business agile
• Responsive to the market
• Better infrastructure which allows flexibility
• Improved product quality and profitability.

You can learn more about scaling a business up or down here.

The 5 Key Expenses Scaling Up Attracts

When you do decide to scale up your business it will be because the market is performing well and your revenue is in a safe place. Scaling down, on the other hand, rarely attracts expenses since its function is to lower the company outgoings rather than raise productivity. For that reason, these Key Expenses are not usually interchangeable.

1. Equipment

Your equipment costs will skyrocket if you let them and that is on a normal day. During the scaling up process, you may wish to keep an extra firm grasp on this. As your business swells so will the demand for new desks, furniture, and computers. Even if you operate online only, you will still incur added costs in terms of outfitting staff with the right technical equipment to get the job done.

To help you with the costs, you could consider crowdfunding, self-funding, or getting a loan. You may even want to look into alternative financing sources, such as borrowing from a supplier.

2. Employees

To match the new equipment, you will need new employees. If you are scaling down you might be considering getting rid of staff, but it is important to remember the capacity of your human resources as well as your hardware based ones.

Set aside a budget for new staff and do not forget the old rule: that onboarding costs about half a year’s salary. Setting aside enough to cover training costs, new uniforms, and safety gear, all adds up.

3. Machinery

If you operate a factory, garage, or some other business with high mechanical costs, then expect to upscale your machinery, too. You might not have the capacity to work faster or produce larger volumes of goods until you take care of your production line. Make sure you have the machinery to keep up with your new expectations for product demand. The whole point of upscaling is not to get caught short.

4. Software

For every computer, iPad, or other device you administer to your employees, you will need management systems, cybersecurity measures, and applications for them to use. These all cost money – and often more money than you might think. Look for companies which offer commercial use deals to make life easier for yourself.

5. Legality

Do not forget this step!

Before you make the final moves to create this new size of business, check with your legal representation first. Product insurance, marketing, merchandising, distribution – all of it needs to be seen by a lawyer just to give it the once over. There is no point in growing a business if you are accidentally breaking the law, is there?

Are You Ready to Upscale?

If you have all the above facets in order, then you could be ready to up-scale your business. Upscaling is almost as tough as starting out fresh so be prepared to work hard. However, once completed those rewards will be well worth the effort. Scalability is all part of business growth so there is one final thought to consider before you do it. What goes up can come back down. Keep it scalable, even in the best of times.

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