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When you first start a business, growth isn’t always the main focus. Early on, it’s all about getting through those first few months and landing your first customers. But what happens when you’re past the survival stage? The focus turns to managing growth — and the pains that come with it.
According to Intuit’s 2024 Business Solutions Report, 51% of small businesses with the goal of fast or steady growth are having trouble streamlining systems and operations to get to growth. Scaling presents new challenges like manually wrangling growing data, hiring employees and figuring out which digital tools are worth investing in. Here are five strategies to take your growing small business to the next level.
Related: 7 Ways to Scale a Startup Into a Billion-Dollar Business
Stay in control of your cash flow
With more money moving in and out, tracking cash flow can become tricky for businesses trying to scale. It’s not surprising that nearly half of growing small businesses (44%) are still struggling with it, according to a study of Intuit Quickbooks customers. On top of that, 40% of small businesses have had to dip into their cash reserves to cover shortfalls. Building up a solid cash reserve is one of the best ways to protect your business and give yourself the flexibility to take risks that drive growth. Most accountants recommend saving at least six months’ worth of expenses to weather unexpected challenges.
A recent report by Intuit found that 66% of businesses are dealing with invoices overdue by more than 30 days. That’s a lot of money that should be boosting your business. To avoid late payments and keep your cash flowing faster, be clear about your payment terms and stick to a consistent invoicing schedule so there are no surprises. Make it easy for customers to pay by offering multiple payment options and incentivize early payments with small discounts.
Combat rising costs
Rising costs are hitting most businesses today, and small businesses don’t have the same resources as large corporations to absorb these expenses. It’s no wonder 58% of growing small businesses say rising costs are their biggest challenge.
To combat these added costs, start by auditing your current expenses. Cut out subscriptions, software or services that no longer add value and renegotiate with suppliers for better rates. If rising costs are impacting your business’s profitability margins, it may be time to rethink your pricing strategy. You’re not alone — 40% of small businesses have already raised their prices to offset rising costs, and another 35% plan to do the same. To increase your prices effectively, keep tabs on market trends, check out what your competitors are doing, and reinforce the value behind any price increase to your customers.
Like many business owners, Bows Arts‘ Liz Pham, a Quickbooks customer, sought to combat rising costs in a variety of ways based on both assessing the market and having conversations with her top customers and sales reps to make cost-cutting decisions. Rather than have a showroom in a certain region, she realized she could hire a sales representative to sell their line to that market — cutting hard costs but still driving sales.
Additionally, she assessed her pricing strategy based on conversations with high-volume customers and sales reps, which resulted in not only increased profitability but also offered a better pricing strategy that was consistent and easy to understand for customers.
Related: How to Scale Your Team Responsibly and Successfully
Scale your team as you grow
Hiring is becoming more challenging for nearly half (47%) of growing small businesses. Larger companies can offer more competitive pay and benefits, making it harder for smaller businesses to attract top talent. With ongoing talent shortages across many industries, it’s even tougher. To make the most impact, focus on the areas of your business that need the most support. Prioritize hiring for roles that will relieve pressure on your teams and allow you to focus on the bigger picture.
Retaining great employees is just as important as hiring them. According to the QuickBooks Small Business Insights Report, benefits like healthcare, paid time off and 401k plans go a long way in keeping people happy. These perks can show your team that you’ve got their backs without draining your budget.
Invest in the right tools
Now that your business is growing, it’s time to upgrade your digital toolbox. About 29% of small businesses already use eight or more digital tools to help improve efficiency, save time and reduce errors. And with 80% of growing businesses quick to adopt new tech, it’s clear that these tools are helping them stay efficient and competitive.
Automation is a big part of that shift — 89% of businesses say that is crucial for success. Leveraging technology to automate tasks like accounting or inventory management can help power productivity while providing smarter insights for better decision-making that can move the needle. When choosing new digital tools, consider your budget, the learning curve and ease of use and their ability to integrate with other systems and grow with you. The right tech will keep you competitive and ensure your business stays on track to scale.
Related: This Strategy is the Key to Scaling Your Business — and Reducing Costs Along the Way
Diversify your sales strategy
Relying on just one sales channel is risky. If the market shifts, you could lose out. Whether you’re selling products or services, investing in ecommerce even if it’s not your primary sales channel allows you to add new revenue streams that you can invest in existing growth opportunities. According to recent QuickBooks data, growing small businesses are more likely to invest in ecommerce, with nearly half (49%) ranking online sales as their top channel. That’s a giant leap compared to just 33% of smaller businesses.
Overall, 72% of small businesses sell online directly or through third parties, while less than half of smaller businesses (47%) do the same. Start by choosing the right ecommerce platform. Think about payment processing, shipping options and how well it can scale with your business. Make sure your website is optimized for a smooth customer experience — after all, a poor online experience can drive potential sales away. Use social media to promote your products, engage with customers and offer free shipping to encourage bigger purchases. Finally, focusing on customer experience, like adding chat support and getting feedback through surveys and other channels, can improve your offerings and loyalty.
Growing your business brings its own challenges, but that’s where the fun begins. Tackle them head-on, learn as you go and watch your business take off.
