Javid Javdani is an independent entrepreneur in San Diego, California. Through his love for business, he was able to own his grocery store while still working as a pharmacist. Javid Javdani has succeeded by assessing the needs of others and having a specific plan in place.
The Importance of Planning
A business plan assesses many aspects of the business. Regardless of the business, Javid Javdani advises new business owners to describe their executive summary. This is the outline of a business’s desires.
A business plan should include the concept of the business as well as financial structures. The concept describes how it will operate and why. The target audience or demographic should be noted during this portion of a business plan. Identifying who the customers or clients are will allow for a more accurate account of the competition.
The financial features of a business are often more complicated. This is because all of the details must be considered and translated into achievable numbers. Financial features include cash flow, sales, profits, and a return on investment.
The amount of money necessary to begin funding the business should be clearly stated before evaluating potential growth. Knowing what type of financial investments will be required is one way to fully understand the growth and scale of a company.
Scale vs. Growth
Growth is a somewhat ambiguous term. When businesses grow, they can give the appearance of a successful company. This may be misleading. Depending on other financial requirements, a business could owe more money than it’s currently making.
Growth is often described as adding resources while the profit increases. Although the size may drastically increase, the margins may not. Scale, however, adds revenue at a rapid pace while resources are added over an extended period of time.
To put it simply, growth costs money. When a business expands in any way, the revenue is increased along with the expenses. Scaling is when revenue grows at a faster rate than the expenses. Scaling is often seen when a business grows at two times the industry average while expenses remain stable over a year.
5 Easy Ways To Scale A Business
Scaling a business takes forethought. By planning ahead of time, a business can maximize its profits over time.
1. Hire the Right People
Hiring product marketers and strategists is one way to boost the effectiveness of sales. A sales department is one of the most critical segments of a business. Professionals who understand market needs and the selling and delivery of a product will help with overall success.
2. Create Repeatable Services
Packaging service offerings is one way to get the most money with the resources a business already has. Examples of this formula include packaging service subscriptions or project-based pricing. For this to be effective, a business owner should track regular customer reports for ongoing optimization.
3. Invest in New Technology
Technology helps decrease the overall cost of business growth. Using less labor cuts down on unnecessary hiring while increasing productivity time. Automation is one way technology can help lower costs by decreasing manual work. System integration can also simplify a business that may have several components to its software.
4. Outsource Labor
For non-brick-and-mortar businesses, hiring outside labor may be more cost-effective. This can be done through online outsourcing sites or networking forums. Before hiring, make sure you understand their qualifications and certifications. Qualified help can be found quickly through using a recruitment system.
5. Remain Practical
Scaling a business may take longer than many business owners believe. Companies that are just starting will often grow before they become scalable. Adjusting the timetable may be necessary for a variety of reasons. Flexibility with clearly defined parameters is what a business plan is ultimately used for regardless of its industry.
What About Outside Help?
Beginning business owners are often hesitant to hire outside help. Because there are so many costs to running a company, an advisor can seem like an unnecessary cost. After creating a strategy, an advisor can help execute it quickly and most efficiently.
Although advisors are not always needed, this can be a relatively easy shortcut to cutting overall costs while growing the business. A strategic advisor is usually used when a company grows quickly but has mounting expenses. Somebody in this position can help with product development, financial expertise, and growth hacking.
Once a business becomes large, an advisor can navigate venture capital services to help with additional resources. This type of help can potentially help secure a merger with another company. For small businesses, the goal is usually much simpler and may take significantly less time.
Staying Focused On The Ultimate Goal
The ultimate goal for a business is to make more money than they are spending. Since this goal usually takes time, growth can become increasingly alluring. While growth is a stage every business must go through, focus is essential when cutting costs.
Entrepreneurs need to be smart multi-taskers, notes Javid Javdani. When there are several factors to contemplate, this skill is necessary for all leaders. By concentrating on what’s important, business owners can actively decide how their business can succeed from month to month.