How to Scale a Small Business Into a Large Business


When your small business is doing well, you naturally start to think about scaling up. But this is a critical time for your company—only 50% of small businesses survive beyond five years. That’s why it’s so important to get the scaling process right.

You have to put systems and procedures into place to create sustainable development, handling increased demand without dramatically increasing your expenses. In this post, we’ll explore exactly how to scale a small business without losing quality.

Let’s take a look!

business growth vs scaling


Conduct a Business Audit

The first step is to assess your current business situation by conducting an audit. This is a wider assessment of the way you run the company. This will reveal what you need to do before starting to scale. For example, evaluate your essential business processes to see how efficient they are.

Here are some more aspects to include:

  • Staff numbers and skills gaps
  • Retention rates (staff and customers)
  • Current audience
  • Most successful products or services
  • Strength of the supply chain
  • Website performance
  • Customer feedback.

An audit will help you check that you have the right foundations in place for scaling your business.

Develop a Growth Strategy

The next task is to develop a solid strategy for growth to ensure you can scale sustainably. This plan will outline where you want the business to go. Reiterate your mission and core values, consider your goals, and work out what you need to do to meet them.

For instance, do you need to hire more people, outsource certain tasks, launch new products, or seek investment? Remember, you’re planning to grow without incurring major expenses, so you should look at ways to reduce costs.

Include an assessment of risks and threats, plus a contingency plan for unforeseen problems. Build in some scope for agility, in case you need to update the strategy as events unfold. Finally, you need to communicate the whole plan to your team.

With the strategy in place, what comes next?

Invest in Team Training and Career Development

Many businesses recruit extra staff as they scale, but of course that adds to your expenses. If your business is doing well (and you wouldn’t be planning to scale unless it was), you probably have most of the human resources you need.

The key is to train and upskill existing employees. Assess their abilities and determine who is ready for extra responsibility. For instance, if someone displays natural leadership skills, they could head up a team or department.

Offering career development pathways shows that you’re willing to invest in your staff. This improves morale, productivity, and retention and helps to minimize the impact of scaling on company culture. Enthusiastic employees make great advocates for the business.


Diversify Your Revenue Streams

It can be tempting to add new products or services, but it’s best to avoid moving away from your main offering. You’ve spent time and effort to find a successful niche, and you don’t want to sacrifice quality or customer satisfaction.

Instead, think about where you offer the most value to customers and expand gradually from there. For example, you could scale up production or enhance existing products with extra features. Base these decisions on customer feedback, and your core audience will stay loyal.

However, that doesn’t mean you can’t expand into new markets or launch extra sales channels. You’ll need to increase your marketing activities, and it’s also important to stay agile. Look at trends so you can cater to customers’ changing needs.

Prioritize Financial Planning and Management

Although scaling does not involve significant investment in the business, there will be some costs to cover. This includes setting up new sales channels, training staff, or expanding marketing efforts. It’s vital that you make a proper plan for financial management.

Determine which parts of your business need more financial support. Figure out whether you can achieve this with your own funds or if you need outside investment. It’s best to overestimate rather than underestimate the projected costs.

You can also minimize spending by using cloud software and operating a remote workforce. Negotiate deals with suppliers, and focus on customer and staff retention to save on acquisition costs.

Financial management requires keeping a sharp eye on all aspects of your company’s performance. You can do this with an ERP system (especially if it has built-in accounting). It connects all areas of your business so you can analyze how to streamline and cut costs.

Which brings us to another aspect of scaling­: investing in technology.

business technology advancements


Invest in the Right Technology 

Scaling requires super-efficient systems and processes. You can maximize productivity and handle higher order volumes without compromising on quality. That means investing in technology to help you save time, reduce costs, and free up resources.

Software that automates manual tasks makes your business more scalable because you can take on more work without extra staff. Automation covers everything from marketing, inventory control, accurate demand forecasting, returns management, accounting, and customer service.

It’s important to ensure the tech itself is scalable. SaaS solutions, such as the cloud ERP system we mentioned earlier, operate a subscription model. You pay for what you need, adding extra users and features when required. Look for software with a number of pricing bands, or choose a bespoke solution.

Establish Strategic Partnerships

Unless you’re bootstrapping your business, you’ll need investment in order to scale successfully. You might seek help from angel investors or venture capitalists or even set up a crowdfunding program. Either way, you’ll need to build strong relationships with your backers.

Find the best partners for supply, shipping, third-party logistics, or marketing. To get your brand name known more widely, you might work with social media influencers or create a referrals network.

Consider teaming up with other small businesses for cross-promotion, especially if you offer complementary services. It’s a good idea to attend networking events or connect online for a range of perspectives and insights from industry figures.

Consider Global Scaling

Going global can be a daunting prospect, but it does present your offering to a much wider audience. Global scaling can also cover recruitment, as remote work enables you to hire from anywhere.

You’ll need to carry out careful research to ensure the new markets are viable. It’s all too easy to overestimate global potential based on your domestic success. Plus, you need to be aware of currency exchange fluctuations, variations in tax law, and changing political climates.

You also need to consider localization strategies. This includes website translation, support for other currencies and payment methods, and awareness of cultural differences. Pay attention to employment laws if you’re recruiting overseas.

reasons to expand your business globally


The Takeaway

To scale your small business, you need to assess the current status and create a solid strategy for incremental growth. Invest in existing staff. Take advantage of new technology. Diversify revenue streams without reducing quality.

Prioritize financial management, establish strong relationships with your partners, and consider global scaling. Stay agile and measure progress toward your goals—and you’ll successfully scale your small business into a large one.

Keep reading for some FAQs on how to scale a small business.


What Does It Mean To Scale A Small Business?

Growth means you’re expanding your team and resources. Taking on new customers at the same pace. Your business is growing in size but not revenue—and if this happens rapidly, it’s unsustainable.

Scaling refers to growth that is strategic, manageable and takes place over the long term. You’re adding resources and team members as revenue grows but taking on clients at a slower rate. This means that if you get a sudden spike in orders, you can still handle them efficiently.

Basically, scaling a business means that you can perform effectively under an increased workload or an expanded scope without a negative impact on other areas of the business.

How Do I Know If My Business Is Ready To Scale?

You should only scale your business if you’re truly ready, as it requires time, resources, and expertise.  Make sure that you have:

  • Established products and services
  • Diverse income streams
  • Predictable revenue
  • Steady cash flow
  • High customer retention rates.

These elements point toward a sustainable and scalable business model. You must be able to maintain performance levels despite increased market demands and production rates. 

Why Do Startups Fail To Scale Successfully?

Startups often fail to understand the difference between growth and scaling. They fall victim to overly-rapid growth where revenues don’t scale in line with resource consumption. They may also fail to ensure a solid product or service offering before they start to scale.

Some companies find they can’t keep up with orders because they don’t have enough inventory on hand. Others fail to optimize their websites and systems to handle a huge increase in visits and transactions.

What Are The Four Types Of Business Scaling?

  • Bootstrapping
  • Slow scaling
  • Fast scaling
  • Blitzscaling

Bootstrapping uses internal resources instead of relying on external capital. This enables a more customer-centric approach and less pressure on founders from stakeholders. Slow scaling is similar, except that the company takes on external financing after it has bootstrapped for a period of time.

Fast scaling requires venture capital to ensure that rapid growth happens smoothly. It allows you to achieve economies of scale. Blitzscaling, favored by tech companies, is when you scale and innovate rapidly in uncertain environments. This means you can corner the market faster.

What Skills Are Needed To Scale A Business?

Specific skills will depend on the type of business. But you’ll need to be adept at financial management, marketing, customer service, and business analytics. Leaders require strong communication and negotiation skills and the ability to train and delegate tasks. The whole team needs to maintain a positive attitude and a sense of commitment to a single purpose.