The goal of most businesses is to expand to the appropriate size. To do this, you have to start from the bottom selling the proper number of things at the appropriate price at the appropriate time. Then, you begin slowly inching your output forward. However, there is always a danger when your product hits a specific tipping point. And that’s when you have to think about scaling up.
You’ll see that a lot of businesses ultimately fail or end up in bankruptcy because they did not scale up properly. There is a method to it. There is a way to utilize infrastructure appropriately so that you don’t go boom and bust. But it takes some knowledge and understanding of how business cycles work. That’s why you should follow several tips about shipping, business plans, competitive logic, and self-sabotage.
Get a Handle On Your Shipping
If you’re trying to do e-commerce fulfillment, how well you scale makes a big difference in the success rate of your bottom line. If you contact a consulting company soon enough about shipping needs, they’ll be able to organize you accurately. If you wait too long or use the wrong company, that can be the end of your brand.
Tighten Down Your Business Plan
After you’ve created your business plan, you can’t just let it sit there. You have to make it breathe. You have to update it occasionally. And especially if you want to scale up, you have to know what facts and figures to adjust inside all of the internal elements of your plan as you originally created it. Without updating, it can be almost impossible to scale with a reasonable degree of accuracy.
Follow Competitive Logic
Just because you can get bigger doesn’t mean you should get bigger. You have to find out what your competitors are doing and how they handle success. You have to find out what your comparative advantage is, and you have to make your business decisions based on that rather than just on the idea of getting larger in some abstract way. Size is great, but what you really want to look at is the size of your margins, not the size of your output.
Don’t Fall Victim To Orders You Can’t Handle
In your desire to become more prominent, you may want to take on the biggest order that can come your way. As an example, if you’re a small T-shirt printing company, and someone orders 10,000 T-shirts, you want to fulfill that order. But if you put together the infrastructure to make thousands of shirts, what happens when you go back to small orders immediately afterward?
Suddenly you have a gigantic overhead hovering in your budget but have to figure out how to scale down as quickly as you scaled up. It can be problematic and often leads to companies sabotaging themselves.