Strategies for Scaling Your Business Sustainably
There is nothing like the feeling of watching a business you’ve built through hard work take off. Watching the orders pour in or selling your storefront stock quickly as you envisioned when you started. It can be exhilarating, exciting, and validating. However, that initial rush doesn’t always equate to sustainable growth.
Without a carefully constructed growth plan, your dream could quickly turn into a nightmare. The flip side of sudden, exponential growth is the inability to meet orders, customer frustration, and damage to your fledgling brand. The knee-jerk reaction to sudden spikes in demand is to order massive amounts of stock or supplies to meet rapidly escalating requests. That can also backfire when fickle trends fade away along with your orders, leaving you with a surplus of inventory.
There are ways you can grow your business sustainably. It takes efficient spending and maximizing sales. Your strategy should include broad reach and cost-effective advertising methods – such as radio – to get your brand in front of an engaged audience of your ideal customers. This post will walk you through some of the best practices for scaling your business effectively.
Understanding Sustainable Growth
Sustainable growth means scaling your business without acquiring additional financing or other debt. For those excited at the prospect of expanding their business, financial leverage may seem to be a quick win. However, it comes with significant risks. Growing your business organically through self-funding means you can sustain the ebbs and flows of a dynamic economy, consumer demand, and sudden trends without worrying about whether you can repay the loans.
The sustainable growth rate tips at the point where your sales overextend your resources, which can happen when the business continues to grow beyond its available capital. Many successful brands have gone on to phenomenal expansion by strategically leveraging debt. They employ tactics like taking out loans, increasing profit margins, or minimizing dividend payouts.
Walmart is one such example. It managed sustainable growth from a regional to a national chain long before it went global. They had reached saturation and needed to expand beyond the approximate 4% of the world’s population that domestic U.S. consumers represent to survive. Through stock repurchase initiatives, cost-reduction and sales-generating strategies, and leveraging their tremendous buying power with global brands, they moved into European, Asian, and other markets in the Western hemisphere.
Businesses have a slight loophole in this method in working with an outside investor. Depending on the product or service, you may grow it to a point where an investor could take an interest and help you grow your business quickly by providing the funds, resources, and most importantly, the knowledge and experience to guide you. However, even with investor help, the same principles apply where your business must manage its growth by staying within its financial capabilities.
Increase Your Sales While Tracking Growth
Another critical aspect of sustainable growth is monitoring your business metrics to ensure you’re spending efficiently and to get a clear idea of your company’s health. Developing branding elements, like a brand story or value proposition, helps achieve this. Launching a radio ad campaign provides traceability for your marketing efforts while increasing your reach. By leveraging cost-effective ad spend, you can ensure you don’t overextend while on your growth path.
Even established brands need marketing to sustain growth. They must keep their existing customers aware of new products or services while extending brand awareness into new markets. By engaging with customers, you can be aware of trends and keep your brand top-of-mind. These marketing tactics make a material difference in sales.
Develop a Robust Internal System
As companies grow, their internal systems must evolve with it. Your staff, technology, and other internal supply systems must scale with the demands of your business. Strategic growth plans include a map of all internal systems, their capabilities, how they integrate, and what their peak loads are. This assessment provides the information that allows you to determine where you need to add to or upgrade equipment and technology to meet upcoming demand and prepare for future growth.
Providing a more robust infrastructure keeps your customers satisfied and helps streamline processes. Automation, CRM systems, and strategic relationships throughout the supply chain fuel smooth, scalable sales expansion. Shoring up and modernizing your internal systems also prevents burnout in overworked employees still trying to keep up with manual processes. Balancing growth and restructuring helps prevent your staff from being overworked while allowing you to scale.
Sustainable Growth Is a Business Strategy
History is full of anecdotes of flash in the pans: businesses that showed promise and potential but ultimately flamed out quickly. There are many reasons for this common phenomenon, and you can link most to a failure to plan for growth adequately. Quality issues cause production, staffing, and quality assurance process deficiencies as the company scales. Shipping delays are preventable with scalable processes and technology like fulfillment systems capable of handling many large orders.
Another problem that many small businesses face is failing to build brand awareness and recognition. Even the most successful brands have had their share of missteps yet continue to thrive. Just ask Coca-Cola about their New Coke debacle in 1985 that created a groundswell of customer backlash. However, it still dominates the soft drink industry as one of the most recognized and popular brands.
Sustainability means self-funding until you’ve exceeded your ability to grow any further. It means strategically managing debt when necessary through cost-saving and sales growth tactics. One way is through reliable, cost-effective marketing techniques like radio ads that provide expanded reach and awareness while building a relationship with an engaged audience. Fast growth is good and can be an indicator of future profits, but to achieve true success, it must be sustainable.
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