Once you see the sales coming in and customers start coming back for more of your products and services, it starts becoming exciting. As you see your business grow, you now consider scaling your self-employed business.
Any enterprise, even a self-employed business like yours, can scale its operations. A business properly scaled to its existing market can maintain its growth–its processes and services are poised to handle increasing demands both from customers and its own team members.
Whether you’re a freelancer, an independent contractor, or the owner of a small business, here are a few tips for identifying how to scale your self-employed business and when to do so.
Understanding “Scaling” Your Self-Employed Business
As a self-employed business owner, you will determine the direction of your business. You might hear colleagues, other entrepreneurs, and experts use the words “scaling” and “growing” almost interchangeably. However, understanding the difference between the two could help you better guide your business and your team toward realizing your vision.
Basically, growing a business refers to the general growth conditions of an enterprise: more products sold and more customers served. It includes opening up a new branch or hiring more team members. As your business becomes more popular, it inevitably attracts more customers. In response, you probably hire new help to keep things afloat as things get busier.
However, there are a lot of other factors at play as you grow. You’re probably seeing more people line up for your business, or you’ve hired new employees without proper onboarding procedures. These situations make for unstable conditions in your growing business–one that could ultimately cost you valuable customers and consequently, sales.
To prevent this from happening, you have to scale your business. As the market you serve grows, you adapt and adjust your strategies and processes to meet these new demands. This involves changing your production processes, investing in new equipment, and adjusting your systems in place to accommodate your growing team.
Although understanding what scaling is easy, the real challenge is in understanding when and how to keep your self-employed business scaled to keep the demands met.
When Should You Scale Your Business?
In business, as in most things in life, timing is essential. Expand too early, and you’ll have processes and investments that won’t be supported by your self-employed business profit. Miss the right timing, and you’ll be unable to deliver the needs of your customers and your own team, leading to a loss in profit.
First, it’s important to know that there’s no one-size-fits-all solution in identifying when is the right time to start scaling your self-employed business, or any business for that matter. Some companies see the need to adapt only a few months after starting, while others take years to finally take their next step forward. While there are no fixed rules, here are a few factors you can check to see if you’re due for an upscale:
1. High-demand seasons are becoming too frequent
If you’re starting to see your self-employed business get a little too busy, maybe it’s a sign to take the next steps. Usually, businesses weave in and out of their strong and weak seasons. If you find these high-volume periods to be too often, start checking points of your business due for an upgrade. The right move will help improve customer experience and relieve processes that could otherwise be a burden to your employees.
2. You start turning down business opportunities
Another important sign that you need to take the next step is that you’re starting to miss business opportunities. Either you have to set cut-off times or dates and turn away additional orders or inquiries, these constitute missed opportunities that not only work as additional income but as potentially-continuous opportunities in the form of returning customers or the word of mouth that could attract more customers in the future.
3. A track record for your concept and system
One of the targets new businesses strive to achieve is a successful proof of concept. A good track record, backed by months of successful sales, will show that your self-employment business idea is definitely profitable. Even if you start scaling, your business has enough customers to cover your upcoming expenses.
Similarly, you should take the time to review your existing system. Identify its strengths and weaknesses and see if the needed changes for a bigger company are attainable and, more importantly, sustainable. Although your employees are working well and producing great results, ask their insights and attitudes about the changes you’re planning to make. After all, your employees are the cornerstone that will help turn your dreams into a reality.
Tips on Scaling Your Self-Employed Business
If you think that this is the right time for scaling your self-employed business, or you’re due for taking the next step anytime soon, here are a few tips to help you make that move.
1. Start automating tasks
Technology has made life convenient, and even more so as the pandemic has forced businesses and professionals to adopt remote working arrangements. From tracking your time, schedule, and progress to implementing AI-driven bots to respond to customer inquiries, there is an automation solution that will help your business move faster and easier, even as you expand. If you want to have more mobility, you can also start considering cloud-based HR management solutions. These make usual human resource tasks easier and even help with onboarding and taxation.
2. Update your targets
This is pretty technical, whether you’re eyeing a new location, looking to add new team members, or simply setting new financial goals, your targets will be the next milestones you’ll be aiming for. A good practice in setting business targets, self-employed or not, is to take a look at your historical data. It will give you an insight into market conditions and will help you identify targets that are both growth-oriented yet still attainable.
If you’re looking for an investment for an asset or an improvement yet the funds are not yet in your hands, you can always consider taking a self-employed loan to help boost your coffers. Again, make sure that the loan you’ll take will be just right for your needs and something you can pay without too much financial strain.
3. Review your processes
Scaling relies on maintaining sustainable improvements to your business as it grows. To do this, make sure to focus on your processes. If you have a targeted profit per time frame, try to maintain it if not improve it. However, this time, adopt it to a larger scale.
If you need to sell more products on a weekly basis, larger production equipment could be the key. If you’re looking to serve more clients over a similar length of time, you can start looking at additional manpower.
The main objective of scaling is to deliver the same quality of products or services, at the same level of customer experience, at the same profitability–only on a larger scale. Although this entrepreneurial move is often fraught with risks, you can keep it controlled and calculated with the right mindset and the proper preparation.