Research shows that 20% of new businesses fail within their first year. By the end of their fifth year roughly 50% fail while only about a third of businesses survive after 10 years. The reason is not farfetched as many business owners jump into the market without a thorough understanding of the market and so they are not able to move from one stage of growth to another.
However, the few successful companies out there started as a business idea which were successfully scaled by passionate entrepreneurs consistently from one height to another. Scaling your business therefore is an imperative strategy for business survival.
What does it mean, to scale? It means increasing or expanding your business from time to time and from one level to another. This means being able to handle a growing amount of work or sales in a most efficient manner without increasing operational costs. Today, however, many Small and Medium Enterprises (SMEs) run into trouble in being able to grow their businesses while also maintaining moderate operational cost.
In few instances also, some businesses run into trouble when they have increasing demand without the capacity to handle such demand and over time they begin to shrink once they continuously fail to impress customers. So, every business owner must be intentional in scaling their business as occasion demands. A business therefore needs a strategy that focuses on increasing revenue while also increasing efficiency.
Scaling will help your business to expand its’ market reach, attract potential investors and strategic partners. There are five areas of focus for businesses looking to scale up. These are; – Strategy – Structure and Process – People and Customers – Finance – Distribution, Supply Chain and Marketing In our next edition, we will be looking more at Strategy for Scaling Up.
Watch out!
