{"id":70423,"date":"2023-04-14T17:43:00","date_gmt":"2023-04-14T22:43:00","guid":{"rendered":"https:\/\/www.success.com\/?p=70423"},"modified":"2024-11-15T13:04:52","modified_gmt":"2024-11-15T19:04:52","slug":"tips-and-resources-to-scale-your-small-business","status":"publish","type":"post","link":"https:\/\/www.success.com\/tips-and-resources-to-scale-your-small-business\/","title":{"rendered":"Tips and Resources to Scale Your Small Business"},"content":{"rendered":"\n

Every great business starts with an idea<\/a>, but actually growing that idea into a viable company has its challenges<\/a>\u2014such as getting the financial support<\/a> you need. No matter what kind of business you want to scale<\/a>, access to advisers<\/a> and experienced business owners can be a valuable tool.<\/p>\n\n\n\n

When Logan Shinholser, owner and CEO of the Contractor Growth Network<\/a> in Charlotte, North Carolina, graduated from college in 2014, he started providing marketing services<\/a> for his father\u2019s pond construction, repair and cleaning business in Maryland.<\/p>\n\n\n\n

\u201cI moved to San Francisco to work at Indeed and was doing digital marketing on the side for my dad,\u201d Shinholser says. \u201cWhen my father\u2019s friends saw how much the marketing campaign was doing for his business, they asked me to do digital marketing for their businesses.\u201d<\/p>\n\n\n\n

Like many entrepreneurs, Shinholser didn\u2019t expect to be a business owner, especially a few years out of college. Eventually, he quit his job with Indeed and became a full-time digital marketer.<\/p>\n\n\n\n

\u201cI saved up six months\u2019 of expenses and built up a pipeline of clients<\/a> before quitting my full-time job<\/a>,\u201d Shinholser says. \u201cNow I have 15 employees and have worked with more than 400 clients on marketing strategies, website design, videos and content marketing.\u201d<\/p>\n\n\n\n

Write a business plan<\/h2>\n\n\n\n

While Shinholser didn\u2019t need investors or to borrow money to fund his business, his savings were an important element of his success.<\/p>\n\n\n\n

\u201cEvery business has different startup costs, but they all have one thing in common: having a financial cushion,\u201d says Bob Marshall, the business growth and strategy executive for the <\/strong>Small Business Development Group<\/a> at Wells Fargo Bank. \u201cFirst, you need to understand what service or product you want to sell and figure out who your customers are. You need to know what your costs will be and whether your business is scalable.\u201d<\/p>\n\n\n\n

A written business plan is crucial to clarify your plans and your finances, Marshall says.<\/p>\n\n\n\n

\u201cYou need to know the cost of your business, how money will move through your business and how you\u2019ll become profitable,\u201d Marshall says. \u201cWells Fargo offers a free business planning resource on our website, but you can also contact a CDFI [Community Development Financial Institution<\/a>] in your area. Colleges and universities often have free business planning resources, or you can ask your chamber of commerce.\u201d<\/p>\n\n\n\n

Shinholser wrote a business plan before quitting his full-time job.<\/p>\n\n\n\n

\u201cMy father-in-law told me to write a business plan just so a bank wouldn\u2019t laugh at me if I needed a loan, which was great advice because it made me think through my market and highlighted what I didn\u2019t know about my business,\u201d Shinholser says.<\/p>\n\n\n\n

Build your support network<\/h2>\n\n\n\n

Shinholser says his business is thriving because of the support of mentors and Mastermind groups. Mastermind groups<\/a>, which are also sometimes called an \u201cadvisory board\u201d are small groups of business owners that provide each other with support and the expertise they\u2019ve gained.<\/p>\n\n\n\n

While Shinholser was fortunate enough to have his father and father-in-law give him advice about starting a business as well as his Mastermind groups, not everyone gets that support\u2014or finds success. Nearly 20% of businesses typically fail in their first year, according to LendingTree\u2019s analysis of data<\/a> from the Bureau of Labor Statistics<\/a>, and almost 50% fail in their fifth year.<\/p>\n\n\n\n

\u201cTo manage the challenges of running your own business, you need a relationship with a lawyer, an accountant and any other professionals specific to your business,\u201d Marshall says. \u201cIt\u2019s also smart to get to know other entrepreneurs through the Chamber of Commerce or other business networking groups.\u201d<\/p>\n\n\n\n

Marshall recommends establishing a \u201ckitchen cabinet<\/a>\u201d or advisory board of three to five people you trust to support you and provide advice.<\/p>\n\n\n\n

\u201cSome may be business owners, but they don\u2019t have to be,\u201d Marshall says. \u201cThese should be people who will give you feedback on your business plan and help you define it.\u201d<\/p>\n\n\n\n

Don\u2019t scale your business too quickly<\/h2>\n\n\n\n

Your advisory board can help you clarify your business strategy and adapt as your business changes and grows. They can also connect you to other resources within their network and provide feedback to help you manage mistakes.<\/p>\n\n\n\n

The biggest mistake Shinholser felt he made was just \u201cgoing with his gut\u201d to scale as quickly as possible. He joined a Mastermind group that focused on coaches and consulting, but that pushed him to scale too quickly. Now he belongs to a Mastermind group of marketing agencies that help him focus on growing a healthy business<\/a>.<\/p>\n\n\n\n

\u201cIt was too much of a strain on my business and we lost money because of it,\u201d he says. \u201cWe learned that the right way was to go slower and take our time to learn what our customers really needed.\u201d<\/p>\n\n\n\n

Secure financing to scale your business<\/h2>\n\n\n\n

Many early-stage entrepreneurs need financial support<\/a> for supplies, marketing or to hire employees to scale their business.<\/p>\n\n\n\n

\u201cThe Small Business Administration offers grants and loans, including microloans of less than $50,000, to help entrepreneurs get started,\u201d says Mark Madrid, associate administrator for the Office of Entrepreneurial Development<\/a> at the U.S. Small Business Administration (SBA). \u201cThe most important thing is to know the difference between loan products and what you may be eligible for depending on your business.\u201d<\/p>\n\n\n\n

SBA programs such as SCORE<\/a>, which provides mentors to entrepreneurs, and Small Business Development Centers<\/a>, which provide technical support to business owners, can connect people to funding sources including lenders and investors in their region, Madrid says.<\/p>\n\n\n\n

Know what the different types of funding are<\/h3>\n\n\n\n

\u201cWhether you choose to borrow money or fund your business with investment capital depends in some way how you feel about debt,\u201d Marshall says. \u201cA loan has the advantage of having terms that you can match to your needs. Once you\u2019ve repaid it, you\u2019re done. But the payments have to be made no matter how your business is doing. And in many cases, you need to pledge your personal assets as collateral, which could mean you would face personal losses and damage to your credit score if you default.\u201d<\/p>\n\n\n\n

If you choose to have investors to help scale your business, you don\u2019t have to pay them dividends immediately and can avoid time-bound obligations, Marshall says.<\/p>\n\n\n\n

\u201cYou can gain insight from your investors if they have experience with other businesses,\u201d Marshall says. \u201cOn the other hand, you\u2019re giving up some equity in your business and possibly some control over how you manage it. Equity costs more than debt because investors assume more risk.\u201d<\/p>\n\n\n\n

Marshall says business owners shouldn\u2019t relinquish control lightly.<\/p>\n\n\n\n

\u201cWhat you pay back to your investors may be more than they put into your business,\u201d Marshall says.<\/p>\n\n\n\n

Connecting with a business banker<\/a> and an accountant<\/a> are crucial steps for any entrepreneur to build a strong financial foundation.<\/p>\n\n\n\n

\u201cYou may want to think about building your business in stages if you can,\u201d Marshall says. \u201cOnce you bring on employees, you have responsibilities to them, too. You\u2019ll need to think about things like health insurance for yourself and any employees, along with retirement plans and other benefits.\u201d<\/p>\n\n\n\n

Plenty of guidance is available for these decisions through financial institutions, government agencies and nonprofit organizations for every stage of business planning.<\/p>\n\n\n\n

More resources to help you scale your business<\/h2>\n\n\n\n