When + How To Scale Your Business

Are you planning to make a significant move to scale a startup? As exciting as it is, it can also be risky if you do it too early or without a proper strategy. So, what’s the catch? The catch is when and how to expand successfully. Hustle Crew, in this blog post, you will learn when and how to scale your business and the techniques to turn your side hustle into a full-time business.

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When should you scale your business? You need to know the right time to scale your business before you miss it. Moreover, choosing the wrong time to scale has the potential to break your business (and your bank account, sadly.) Here are some key measurements to ensure that you are ready to scale your business:

• Consistent revenue: If your revenue has consistently increased over time, it is a strong indicator that your business model works. 

• High demand for your product/service: If you can keep up with the demand for your product, it indicates that your market responds well.

• Efficient operational processes: You should have steady operational processes (already in place) before you scale.

• Sufficient capital: If you plan to expand your business, you require talent, technology, and marketing, among many other factors. It is essential to have the funds to achieve and sustain growth.

• Proven business model: If your business is constantly experimenting with pricing, customer acquisition, or product-market fit, you might not be ready to scale. This isn’t to say you shouldn’t be adjusting to fit market trends, but a lack of a consistent strategy is often a red flag. 

  
  

By analyzing some of the above factors, you can decide whether you can scale your business. Is it a yes or no? If you decide it’s not time, be patient with things. Waiting for the right opportunity is always better than going for a risky head start. If it’s a yes, the next section will brief you on how to scale your business.

An example I frequently refer to is DoorDash. After years of refining their business model, they decided it was time to expand when the COVID pandemic left everyone at home but still wanting their favorite takeout dishes. By October 2020, they had over 50% of the food delivery market share! PC: DoorDash

If you feel that you're ready (considering the above key points) to scale your business, there are still many things to consider. How exactly can you scale up your business? Here are a couple ways to potentially get you started:

• Strengthen your core business: Since you are likely in a beginner stage, be aware that your starting operations are not in place before you expand. By going through operation processes again and refining the product, customer service, and delivery processes as needed, higher demand can be accommodated. Therefore, you can quickly and smoothly scale your business with a strong foundation.

• Build a scalable infrastructure: You cannot scale a business without sufficient infrastructure. For example, you can include automation, technology, customer relationship management (CRM) software, project management tools, and analytics platforms. These logistics and supply chains can help you manage transport and other operations more than expected without delays.

• Hire the right team: You cannot manage a growing business without a strong team. Focusing on hiring talented candidates and safeguarding your company's culture and goals is vital in order to grow internally. Implement leadership roles and expand teams if necessary.

• Secure funding: Scaling does not always call for the need for bootstrapping. You can adapt with funding options such as venture capital, angel investors, or business loans to get your company enhanced and running. Moreover, before hunting for investment, work out a solid financial plan and demonstrate how funds will be utilized to accomplish the milestones.

• Expand your market: As you expand your market, you will gain access to new customer segments. If your product or service will benefit from new geographical markets, you must conduct thorough research, examine market demand, and build a sustainable long-term business in these new locations.

• Strengthen your marketing strategy: You need an effective marketing strategy to scale your business. Moreover, you can use digital marketing techniques such as social media, SEO, and content marketing to create brand awareness, referral programs, and customer loyalty programs to attract existing clients and gain new ones (check out part 1 and part 2 of our Marketing and Branding series for more details!).

• Monitor and adjust: Since growth brings new challenges, you must regularly track your key performance indicators (KPIs). These KPIs, unique to your own business’s goals, will help you to determine your success, reach, and find opportunities. You must also shape your strategy based on customer and market feedback and scale accordingly.

And if you want to learn how to turn a side hustle into a full-time business, here are a few important things to consider. Switching from a side hustle to a full-time business requires strategic planning, lots of time, and is no easy task whatsoever. As with all things in the world of entrepreneurship, it also comes with a pretty significant risk. But if you're ready to take that chance, here are some tips to help you achieve it (and minimize some of the risk):

1. Validate your business idea:

• Make sure there is sufficient market demand for your product or service.

• Experiment with different pricing models to find the customer's willingness to pay.

• Get feedback and a variety of opinions to ensure you aren’t just on “Mount Stupid” (more on this later!)

2. Create a financial plan:

• You should save at least 6–12 months of living expenses before quitting another job if you have one.

• Have a rough outline of what the finances of your startup should look like on a month to month basis (it’s ok if the numbers aren’t exact - business revenue is often unpredictable anyways).

• Cut out unnecessary spending where possible to ensure you don't run out of money.

3. Build a solid customer base:

• Before going full-time, develop relationships with loyal customers.

• Provide a quality product / service to create more loyal customers, who can also possibly serve as referrals.

• Find ways to sell a service securely and secure long-term contracts or recurring revenue.

4. Establish multiple income streams:

• Diversify your revenue sources within your business if possible - consider selling products/services or offering online consulting or coaching on the side.

• You can secure additional disposable income by doing side gigs or taking an additional job that doesn't demand too much of your time.

5. Optimize your time management:

• Make use of your time, which is your most valuable resource! 

• Set goals and decide on which tasks would provide you with revenue.

• Outsource or automate crucial non-business tasks to prioritize business growth.

6. Build a support system + network:

• Meet mentors, industry peers, and potential partners online or at corporate events.

• Join online communities and networking groups to find like-minded entrepreneurs (and maybe even a potential business partner).

• Look for advice from those who successfully switched from side hustle to full-time business - who better to ask than someone who’s done it themselves?

7. Expect the unexpected:

• Have an emergency fund for business and personal expenses.

• Be flexible and prepared to find a way if you don't get results as planned.

• Be resilient; business growth is not always linear (in fact, it rarely ever is!)

The Dunning-Kruger effect illustrates the relationship between competence and confidence. This relationship, like the business growth cycle, is anything but linear. Oftentimes, the most confident people are the least knowledgeable (hence the name, Mount Stupid!). So make sure you get a variety of opinions and analysis on your business model before going all in… (PC: Dale Peterson)

Planning to turn a side hustle into a full-time business or scaling a startup takes excellent planning, strong financial stability, and a workable execution strategy. Don't rush the process, be aware of potential challenges, and most importantly, enjoy it! Oftentimes, entrepreneurs find themselves focused so much on the numbers, revenue figures, and market data that they start to lose the thrill of living their dream and starting a business. Don’t let that be you!

If you plan your scaling process effectively, you can make a sustainable business model and have all the necessary resources to expand. Whatever you do, plan out your strategy and take the time to really put your best foot forward throughout the expansion process.

We hope this guide gives you the insight to identify whether you are ready to scale up, when you can do it, and how you can do it. Happy growing your business, Hustle Crew!

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About the Author

Brandon Yeh is an entrepreneur and student who currently resides in the Bay Area. In addition to working on his latest business ventures, he enjoys playing golf competitively and is an avid Bay Area sports fan.