Scaling Up: Strengthening Business Capacity for Growth

In the quest for business growth, scaling up is a vital goal; however, achieving sustainable expansion requires strengthening a business's capacity. To meet the demands of increased growth, it’s likely you’ll need to begin optimizing your existing resources or expanding your skills, expertise, and equipment. From streamlining operations to embracing technology and fostering a growth-oriented culture, get ready to unlock transformative insights for thriving in the face of growth opportunities.

Building in-house capacity

Maximizing your in-house resources should be your priority because it might be enough to build your capacity without needing to dramatically change your business. If you need additional skills in your business, consider re-training or expanding the skillset of existing employees before hiring someone new. Start by auditing your needs and then identify which vital skills are missing. This will form the basis of new job descriptions.
Optimize Your Systems
Accurate bookkeeping will help you understand exactly how your business is performing. It’s easy to track all your expenses and revenue if you use accounting software. Cashflow forecasting will enable you to anticipate a possible cashflow problem before it actually happens. Some solutions include: 

• Tight creditor and debtor control (invoicing promptly and collecting debts on time). 
• Realistic pricing and costing to ensure every sale is profitable.

Small business owners often complete a variety of similar daily tasks. Document each important or daily process in your business and then identify develop templates or standard forms for everyday work to speed everyone up.

Tips for Building External Capacity

Once you’ve streamlined your business, the next step is to take the plunge and increase your overall capacity (checking that any increase in demand is sustainable).

Consider Contractors

Identify third party contractors or other companies that could take up extra slack to increase your capacity at any time. Doing so can provide you (or employees) more time to work on the other aspects of the business, such as marketing or delivery/production. Outsourcing your tasks can ease temporary capacity issues, before you decide to employ full timers, or buy additional equipment or inventory space.

Review Your Equipment

If some of your equipment is outdated or obsolete, would an upgrade help improve your overall capacity? You could: 

• Lease key equipment or machinery until the capacity issue is solved 
• Investigate new technology that removes redundant processes or replaces manual tasks 
• Buy new equipment.

Purchasing new equipment can be expensive but remember that competitive advantage is gained from getting products to market quicker than your competition. Conduct a cash-flow forecast to see the impact loan repayments have compared to the extra efficiencies or production you’ll gain.

Strategic Alliances

Forming a business relationship with a partner, or partners, may provide you with several advantages. You may be able to access technologies or patented processes owned by the other partner. Additionally, you may be able to access their distribution network. If you are thinking of forming a partnership, consider your strengths and weaknesses compared with your potential partners. The ideal partnership takes advantage of your core competencies, while strengthening weaker areas of your business.

Well-chosen partnerships can provide advantages including: 

• Working in partnership allows you to share the work and commitment 
• Complementary skills
• Opportunities for growth 
• Access to resources such as specialized staff, finance, and technology 
• Access to your target market 
• They can provide support and motivation.

Raising capital

If you decide there is merit in expanding your capacity or improving your capability, it could be worthwhile to invest in making it happen. Some options include: 

• Obtaining a small business loan from your bank 
• Investors 
• Venture capitalists 
• Government and state assistance
• Crowdfunding

Don’t be afraid to expand your operations if there’s enough demand to justify it. You’ve heard the old saying, ‘you have to spend money to make money.’ This is especially true of spending to improve your business capacity if you’re getting the kind of on-going orders that require a larger operation.