Scaling any business can be hard, but scaling an online business can be particularly challenging. Most of the time a business scales because 1.) new customers are coming in floods and the business isn’t prepared, or 2.) the service or product offerings are diversifying, which has its own set of problems. Here are the top 6 reasons why many online businesses fail to scale and how using a tool like Scale Smart Solution can help prevent pitfalls in growth:
Inadequate technology and systems can hinder the ability to handle increased traffic, orders, and operations. Businesses need robust e-commerce platforms, reliable hosting, and scalable software solutions. Often we start our business with platforms that “will do for now.” This “now” type of thinking can get us into trouble when the customers start coming and the system crashes midgrowth. It requires us to overhaul the system or implement new platforms at the WRONG time. Scale Smart Solutions encourages making today's decisions based on future goals. Now I know startups can be on a shoestring and money resources are slim. My advice in this situation is to seek out systems and platforms that have growth tiers. Start at the base package and upgrade as you increase revenue. This allows you to grow as you grow without having to completely change the platform and upset customer experience.
Scaling requires investment in inventory, marketing, and staffing. Without a consistent and predictable cash flow, businesses may struggle to fund these growth initiatives. Sometimes, businesses seek to scale too soon. Scale Smart Solution emphasizes watching your numbers. Only when the revenue is coming in should you take on new projects/expenses/team members/markets, etc. If you are watching your numbers you will know where the money is coming from, what is not producing or needs attention, and what needs to be cut. Sometimes customers/clients ask for special products or services, but that doesn’t always mean a whole new line should be implemented, take note a come back to the idea when the time is right for diversifying the business.
As a business grows, marketing strategies need to evolve. Failing to diversify marketing efforts or leverage data-driven approaches can limit customer acquisition and retention. When it comes to marketing your message is not a 1 size fits all situation. Most businesses have a blended target market. Your target market may be women aged 24-36 AND 45-65. The reason why those 2 different targets align with your product or service can be distinctly different so your marketing needs to have 2 voices. In Scale Smart Solution we talk about marketing, branding, and sales. We also talk about connecting with your target market. This helps clarify both the message and the connection we have with our ideal clients.
Scaling often exposes weaknesses in operations, such as supply chain issues, inventory management, and fulfillment processes. Inefficiencies can lead to delays, increased costs, and customer dissatisfaction. Operational inefficiencies often show up due to a lack of systems and processes. You can’t train or replicate something until it is written down and most business owners haven’t written down much in the process of growth. More often than not they have “systems” as a result of trial and error. In Scale Smart Solution self, time, and systems management is so important it is given a whole section.
Growth demands a capable team and strong leadership. Lack of experienced personnel or poor leadership can result in mismanagement and inability to execute growth strategies effectively. Just because you started or operate a business doesn’t mean you are suddenly gifted a great team and phenomenal leadership skills, unfortunately. Additionally, growth and scaling mean pressure which can push us to our limits. It’s not for the faint of heart. Scale Smart Solutions talks at length about how to build a team, what to look for in team members, and how to know your leadership style so you can develop that too.
Acquiring new customers is important, but retaining existing customers is crucial for sustainable growth. Businesses that fail to provide excellent customer service and build loyalty struggle to maintain a stable customer base. Statistics tell us that it takes 7 times more money to acquire a new customer/client than it does to retain the current ones! That is substantial when it comes to diluting revenue. Keeping customers/clients happy is not really that hard but it does require effort and consistency. The Customer Journey is a stand-alone section within Scale Smart Solution because it is so important to the scalability and sustainability of a business. It is also a process, a system of integrated steps that encompasses many of the aforementioned issues. If you can get your customer journey nailed down you are well on your way to success!!
Any one of these items can take down a business if it's bad enough. If you can see 3 or 4 of them happening in your business right now, please don’t hesitate to reach out. Addressing these challenges proactively can help online businesses create a solid foundation for scaling successfully because you can turn anything around with enough focus and energy. Scale Smart Solution is here to help! There are many ways to work through these issues. We are here to help.
