Scaling your Business (Part II): Have your Basics in Place
What preparations need to be made prior to scaling? Surprise, surprise, it's the basics.
Author: DBS BusinessClass, Administrator of DBS
Scaling your business takes work, and it takes strong direction and preparation. Besides having a great team, and ensuring that the company has enough human capital to cope with high-growth situations, some other basic preparations have to be made to begin scaling up.
Have a good product
Your users It isn't just about having a product that you think is great. need to love it too. In classic marketing terms, this is called achieving a ‘product/market fit', but it's more than that. Before you start thinking about scaling, your product should be out of the test market and ready to be sold to users other than your early adopters. If you're still struggling with bad customer reviews or users telling you that the product is too difficult to use, make the necessary improvements before jumping into spending capital on sales and marketing.
Have a good marketing plan
Your product isn't going to go out there and sell itself. Consider the other 3 Ps of marketing too – Price, Promotion and Positioning. What kind of pricing strategy are you using? What else comes with your product? How can you explain what your product is in a simple statement? What channels are you going to use to market the product and the company? Make sure you're not just marketing your product; you're also giving your customers a glimpse into what makes your company so unique.
Have enough money
As usual, cash is king. When you foresee more money going into sales and marketing, start looking at getting financing for an expansion in the business. This is where your product and team becomes important, especially if you can prove the profitability of your business idea to VCs and investors.
Another important point is cash flow management. High-growth brings in more sales, but if you're having trouble collecting from your customers, none of that is going to translate into profits. The truth is, it's always easier to spend money than it is to earn it. Have a good understanding of when cash is flowing in and out of your company, or get software to keep track of that for you.