Making up one-third of private-sector GDP and jobs, mid-sized businesses are the stable driving force behind the world economy. With revenues of between $10M to $1B, they are the companies that consumers depend upon, the ones that fuel the job market; overall, a success story. However, many find it difficult to take that next logical step in business development—to create a sustainable business scaling strategy and become a large-sized enterprise.
The situation with mid-sized business post-COVID
Alongside the regular challenges of scaling a business, mid-sized companies are also experiencing the impact of the coronavirus crisis. One year on, many find themselves still adjusting to the new normal of the working environment. Before seeking to scale, it’s vital to take into account the unique circumstances posed and how they can be utilized to create the conditions for scalability.
Changes to employment
During the lockdowns, many companies moved to working remotely. For some businesses, this incurred extra cost to furnish home offices. For others, it meant savings on physical buildings and leases. Some companies were able to take advantage of the scheme to sustain the business during troubling times, such as the US Paycheck Protection Program (PPP) or UK’s furlough scheme. Unfortunately, mid-sized businesses often found themselves unfairly fit, falling through the cracks of government support, which further impacted business and caused layoffs. For those who weathered the storm, it meant adjusting to a new way of working, including culture changes for online cooperation.
Evolved expectations and values
COVID reminded the business community to expect the unexpected. While risk in business is usually well calculated and measured put in place beforehand to offset any unforeseen difficulties, the appearance of coronavirus and its impact meant companies had to think fast on how to protect their employees and revenue. For many, this was a stark reminder of the inherent risk in business and forced companies to adjust their expectations and values to focus on remote solutions, scalability, and sustainability.
Even though optimism in business is not as high as in previous years, mid-sized companies are showing optimism for the future. 44% of companies expect growth in this coming year, while 33% plan to employ more people, adding to the workforce. While this is down from 2019’s Q4 results (pre-COVID) of 73% and 48%, respectively, all things considered, it is a promising development for the future. This proves that the coronavirus crisis is not a growth blocker. Instead, it serves as a reminder of why scalability is important for any business.
Why many mid-sized companies struggle when scaling a business for growth
Not quite a start-up and not quite a large-scale enterprise. When it comes to mid-sized businesses, finding the balance between scalability and sustainability is no easy feat. Mid-sized businesses often find themselves grouped in the SME segment, yet the obstacles they face when scaling their business model will be quite different to a start-up. Here are some of the ways.
Mistaking growth for scaling
Before diving into scaling, companies should consider the growth scale value definitions and decide which one they are truly seeking at this stage. So, what is the difference? And what is scaling in business? Scaling in business focuses on adding revenue or profit faster than the costs it takes to do so. Meanwhile, growth focuses on increasing revenue in line with the number of resources used. Knowing how to scale and do so effectively is art for business managers who are able to analyze scaling opportunities and implement them effectively.
Struggling to realize the next step in scaling
For many, it can be difficult to analyze which step is the correct one when it comes to scaling. Alongside mistaking scaling for growth, managers may face difficulties in establishing the right path forward considering the current market conditions. The post-COVID world only makes this riskier. Approaches that work for start-ups or large-scale enterprises don’t always apply to mid-sized companies, so this can make the research ground a little thin when it comes to defining the next steps in scaling a business.
Find the right solutions for scalability
What is a scalable solution? And which one is suitable for your particular business or industry? When approaching the challenge of scaling, it’s vital that managers examine industry-specific strategies that work within their current field and growth level. Knowing how to employ the right strategies and technology to get results is the key to success.
What is scaling in business, and what does it mean for you?
Scaling in business is all about increasing business development while using it effectively to get results. For every company that wants to build scalable business solutions, there is a unique approach. What has worked for another business may not work for yours, and vice versa. That’s why it’s vital at the outset to define what scaling in business looks like for your company. You should take the time to analyze:
- Current market trends
- Opportunities for scaling
- Which areas in business can be effectively scaled and which can’t
- Risks of scaling
- Resources required and ones that are available
- Is now the right time to scale your business?
By doing so, you will illuminate where your company stands at the moment and if now is the right time to focus on scaling your business.
How to create your personalized business scaling strategy
As we previously said, there is no singular scale-based strategy example or one-size-fits-all scaling a business solution. Instead, the specific needs of your company will dictate the direction you need to take. That said, there are some common factors that businesses should take into account for starting scaling.
Solidify “real” market value strategically
As a mid-size business, it’s safe to say you made it. You proved your business can be a success, but what’s the next step, and where do you go from here? If your business has reached this stage, you could be primed for scaling. Now it’s all about refining your business and getting it ready to scale. Here’s how:
Define your customer base
Before, you might’ve had a more general idea of who your customers are. Now is the time to dive deep and target. By knowing your customers, you’ll know which areas of your business need to scale to be most effective to them.
Refine your core values—think product
Now, it’s time to look at what you bring to the market. Why should your customers choose you and not a competitor? Knowing these values means you can focus on building your brand in these areas.
Solve one thing at a time
When we try to multitask, we often find ourselves torn between various areas, and this can be extremely harmful when it comes to scaling a business. It divides your focus and makes any moves ineffective. At this stage, it’s important to define your focus and only tackle one problem at a time. Solved that one? Then move to the next one.
Use smart metrics
Once you’ve defined which areas of your business to scale, it’s time to decide how you will know your effects were a success. That’s why knowing the scale in business meaning for you matters. Decide which metrics you will use to know if scaling was a success for you and the key milestones you need to achieve to get you there.
Avoid introducing a new product or service
Scaling generally isn’t about introducing a new product or service to your range. Instead, it’s about optimizing what you have and making that work more effectively for your business. However, what this doesn’t mean is being afraid to onboard new methods, systems, or technology that help get you there. Don’t hesitate to research and explore new solutions, technology, or methodologies that could work for your business.
Take account of security risks
When scaling, your systems will become larger and more complex. This can lead to issues such as errors or weaknesses in the system’s security, which can cause data leaks or bugs. That’s why, when scaling, it’s essential to take account of security as a priority, and not as an afterthought. Initiate a plan for how you will secure your data and systems before they need protecting.
Unlock the power of the right technology
For many businesses, getting the right technology on board can help scale businesses astronomically. It can automate processes, make things simpler, or even unlock new potential. One of the most popular solutions at the moment is cloud computing. Its various areas can help businesses scale and do so remotely. By unlocking the benefits of scalability in cloud computing, companies can utilize the power of the cloud to allow employees to work from anywhere in the world, access their systems when needed, and increase the scalability of the business by moving it from one fixed location or office to worldwide.
Keep that growth spirit
As companies grow, it can be challenging to keep that entrepreneurial spirit that helped them to get this far. Processes may seem routine and stable. But it could not be more essential than at this moment. At this time, it’s vital to adopt an agile mindset to scaling, one that permits you to define a strategy, test it, and adapt it to fit your business needs.
IT infrastructure scalability—the next steps for your mid-sized business
In the modern business environment, an effective IT infrastructure is one of the most important tools a company can have in its kit. From effective cloud computing to analytics solutions, to automation solutions, having the right technology at your fingertips is key. However, for businesses just starting out or those seeking to scale and fast, it can be confusing to know which solution is best for you.
At *instinctools, we are the experts in digital transformation. Get in touch with us to find out how we can help you scale, or follow our blog to discover more on how to keep your business up-to-date and primed to scale.