HP TECH TAKES /...
Exploring today's technology for tomorrow's possibilities
Subscribe
The Best Ways to Scale Your Online Business
Linsey Knerl
|
October 23, 2023
Even if you start your online business with a bang, it’s common for sales to plateau at some point. What are the best ways to jump-start success? And how can you scale your online business in a way that’s both easy on the budget and sustainable for the long-term?
Growth vs scale
First, it’s essential to understand the difference between scale and traditional growth.
Growth occurs when we invest additional resources and see sales or an increase in market share as a result.
Scale, on the other hand, isn’t always as linear. It may not require much investment to see results, and the return on investment is often significantly better.
Scale generally happens without a considerable additional outlay of resources, and that’s why it’s essential for the long-term health of a business. An example of growth is spending $1,000 on ads that speak to an online audience. An example of scale is sending out emails to 10,000 existing customers with that same ad message. While you may see a return on investment from the ad campaign, the email blast could exponentially boost sales.
Scale generally happens after a period of linear growth, since having a healthy growth strategy is part of the groundwork necessary in order to scale. The good news is that if you’ve reached a level of stagnation in sales or market share, you may be in the right place to start seriously scaling your business.
Top 6 ways to scale your business
All businesses, not just online companies, are better served when they learn to scale. It may seem easier to approach this with an online business, however, because it relies so heavily on data, automation, tech, and web-based interactions. Consider these tips with internet businesses in mind, although you can apply most of them to physical locations, too.
Bear in mind that what works really well the first time around could conceivably work just as powerfully time and time again. This differs from in-person sales efforts, which have more potential for variances due to market forces and even human error.
1. AUTOMATE MORE OF THE SELLING CYCLE
Online businesses have a huge advantage over brick-and-mortar stores in that they can do customer service, outreach, and sales 24/7. You can often schedule tasks ahead of time, and automation is ideal for those who want to touch less of the sales cycle and run things in the background.
Automation tools have flooded the marketplace, so do research to understand what’s worth the sometimes-hefty price tag. Many tools feature all-in-one automation suites, and allow you to bundle your most tedious tasks into one slick dashboard. Lead generation, welcome emails, loyalty programs, and even social media management are all prime candidates for automation.
2. MAKE IT EASIER TO BUY
Did you know that 75.8% of shopping carts are abandoned without checking out? This can happen for many reasons, including times when a shopper had no intention of buying in the first place. What does data show?
- 23% of these shoppers found shipping options unsatisfactory
- 34% wanted to purchase without making an account
- 6% were unhappy with payment options
You have control over all of these factors.
Abandoned carts equate to $4.9 trillion in global losses annually, so it’s worth looking at how you can make it easier for your customer to hit the buy button. From offering more payment options to ensuring customers know exactly how to make a purchase, investing time and talent into solving the checkout problem is a smart way to scale your business.
3. INVEST IN TECH
People, of course, make up the heart and soul of every business. But when tech is better positioned to get things done, there’s no reason to avoid implementing it whenever you can. In fact, the right tech not only helps you get more done with less human resources, but it can help you shift your talent to the places that matter, like R&D, consultative selling, brand management, and employee development.
What tasks are best suited for tech? Invoicing and payroll, social media metrics tracking, CRM, ad targeting, and even hiring are some of the top ways companies are utilizing tech. And if you’re an online business owner, you can find a host of tools designed just for ecommerce and shipping logistics. Since many ecommerce and web entities have common pain points, you’ll likely find several of these solutions in one handy, customizable tool.
4. COLLECT MORE DATA, THEN USE IT
Every tweet you post and email you send is a treasure trove of information. Are you using it as you should? While it does take a time and talent investment to glean the data available in every online interaction, the information hidden within can help boost your business in ways other data can’t.
Analytics are truly changing the way businesses scale. They can tell you everything from where most of your sales are coming in to when your customers are most likely to be online (and if they’re shopping at that hour).
Smart SMBs know that not all data is worth dealing with. Instead, they’ll start with information that’s plentiful enough to depend on, and specific enough to be actionable. A tweet with 30 views probably won’t give you the keys to scaling quite like the click-through rates on an email to 10,000 subscribers. Look at passive data collectors for an extra boost.
5. PAY FOR MARKETING
Are you still waiting for your “organic” marketing moment? If you’re trying to hit it big with a viral video or a word-of-mouth campaign, you may be waiting awhile. The odds of finding explosive growth with a low-cost marketing method is poor, and the Small Business Administration reveals that B2C businesses spend, on average, 9 to 12% of their revenue on marketing. B2B businesses spend slightly less, but it’s still significant.
How do you stack up to the competition?
This is often where many companies are reluctant to spend, but the ROI can be great, especially when your customers are already poised to buy, such as during the holidays. Your dollar spent on ads may be just the nudge they need to take action.
6. CONSIDER MORE FUNDING
Speaking of spending, it’s understandable if you’ve hit a wall and can’t grow much further because of tapped budgets. It happens to every business at some point or another, and funding is an essential way forward in stagnant times. It’s not only crucial to have cash on hand for crushing those growth goals, but it’s a must-have for simply staying afloat. Consider that almost half of failed businesses cite lack of money as their reason for not sticking around. That’s a stat you can’t ignore.
Assuming you have a solid plan for spending that money, you may consider any of the following to get you back on track:
- Grants
- Loans
- Angel investors
- Crowdfunding
The Chamber of Commerce reveals that most small businesses are owner financed, while other common funding types include SBA loans, with the average loan reaching $417,000.
You don’t have to borrow that much to scale successfully. You can fund one milestone at a time by identifying the place you’re likely to make the most impact. Whether it's $10,000 for a new set of video ads or $5,000 for a new customer relationship management platform, you’ll likely need to invest a chunk of change to kick off any scaling method, even if the goal is to see bigger returns as time goes on.
The next steps to scale the right way
With so many ways to scale your business, it may be tempting to try them all. This may work eventually, but it’s best to choose just one strategy at the start. Business is much like science, and it works best when you can measure the outcomes of a single change at a time.
Pick one tip, isolate all of the business systems it potentially affects, and test your new method before investing more or adding in the next method. Occasionally, some tools will not give you the desired outcome.
And by trying just one thing at a time, you can evaluate your progress and revert, if needed.
Some of these steps will also require an initial outlay of cash or human resources, so it’s important to document your outputs and very carefully track your ROI. A smaller ROI doesn’t mean that a trial should be abandoned, but you can prioritize those with better results.
The exception to the ROI test should be any practice that puts your customer at the top of mind. If it improves the customer experience and rewards loyalty, even with little to no initial ROI, keep it as a possibility in your scale toolkit.
It’s very difficult to measure certain things, like customer sentiment, but they can have an impact on how well you continue to scale after your first initial bump in growth. In other words, you can’t quantify every factor leading to scale.
