How does an SME take their business to the next level? Scale it up to break the glass ceiling?
This is a challenge I have taken on and been working through in the last year. I am going to talk about the difficulties of scaling up a business with a product that cannot be easily scaled. Here are some of my thoughts on how I have done it with my florist business, Lizzie’s Bundles.
There are three sides to triangle scaling a business.
- Creating the demand
- Scaling the product to meet the demand
- Creating the support structure to administer the business
While a business with a solid triangle should be the most stable, all of its sides may not be equal. It may be more difficult to make certain sides of the business’ shape strong to scale it.
Do you actually understand your product?
What is the product: is it tech-based, service-based or product-based?
Is it easily replicable? This is the Achilles’ heel of scalability. Ultimately if you cannot replicate the product en masse, scaling up will be problematic.
I thought I understood my product 18 months ago. I am a florist. I sell flowers and I had identified working in the national gifting market as a scalable section of my business, working to provide our own in-house handmade bundles of flowers nationally using a reliable carrier.
I had been working in my industry for 20 years and knew my stuff. I thought, ‘My team and I can produce bulk in our peak periods, we burn the midnight oil and we always got the job done’.
Yet in scaling up the business this would be an unsustainable way of working with my existing product lines and production processes. I needed a complete rethink, I needed to identify the pinch points to open up my ability to scale.
Identify pinch points
Next, figure out what is required to deliver the product to the market and the pinch points which may challenge the ability to scale.
Is it the supply and availability of the commodity? Is it distribution? Is it shelf life? Is it manufacturing challenges? Is it people? In floristry, we have a double whammy of short shelf life and a distinct lack of florists.
In order to deliver Lizzie’s Bundles on a larger scale, I had already put in place the infrastructure of supply of the best quality and long lasting flowers, plus swift supply and distribution chain and refrigeration. However, the strength of the handmade-bundle USP is also my weakness and has the potential to create a pinch point. I still do require skilled staff to make the bundles.
For each product, there is a way to scale, though the products may need to evolve. So, for me it was looking at my products and finding a way to deliver a range en masse by simplifying and streamlining the making up process, delineating the key areas and processes and breaking down the production process to utilise the skills of team members in the most efficient manner possible.
“There is a way to scale, though the products may need to evolve”
This has allowed me to scale the production of Lizzie’s Bundles without compromising on quality or service.
I have also looked at tooling, utilising IT and simplifying wherever possible when scaling up. This may appear to contradict the ethos of handmade and skilled production. This is far from it. What it does is to allow my team to focus on producing a quality product efficiently.
Economies of scale can balance two ways
When we apply the term economy of scale, this often refers to efficiencies that can be made through scaling up. Yet, not having a handle on the costs involved in scaling can actually tip these scales into being less efficient and ultimately less profitable.
If you work to scaling up your business without really understanding your product in the realms of bulk orders and scaling with an eye on the profit, you will be doing yourself a disservice.
Working with suppliers
If you have a unique product you may be within your own bubble. However, one or two conversations with suppliers may introduce you to products or services which may revolutionise the way in which you work.
While paying for solutions may seem an expensive option, production internally may not be the way forward. The term ‘busy fool’ comes to mind. Actually, coordinating supply from sources to finish a product can be more efficient. This allows you to focus on supporting your pinch points in order to meet demand which generates an ability to scale beyond demand.
It may mean outsourcing production either in part or for the entirety of your product. Are you really the best person to make the product? This is not necessarily a detraction from a brand to work with suppliers who are tooled and set up to supply in bulk. In the short to medium term this may be the buffer needed.
With the will there is always a way. It is a case of thinking, planning how and why and understanding your product from a different angle. Good luck!