Many of us may have aspirational goals of growing our freelance enterprises or scaling up. Who doesn't want more clients? More projects? More revenue?
Not casting a universal net, but, it is probably fair to say that even if becoming a Fortune 500 company is not your heart's desire, longevity is–and longevity often requires scaling up your business.
What does it mean to scale up?
The concept of scaling or scaling up is actual derived from the math concept of making “something larger in size, amount, etc. than it used to be.”
Something as simple as going from five clients to seven clients can be considered scaling up. Even growing from two employees to four requires a change. Even though these numbers may seem small, or inconsequential, any time we add to what we do, it changes the dynamic of what we do.
As much as the idea of scaling up is appealing, to be successful at it, you need to be prepared.
Here are two details that are easy to overlook, but you may want to consider them as you prepare to expand.
Having more responsibilities, including people to oversee, requires you to understand how you lead
I admit that I love the art and technical side of writing more than I love the commerce side. For many of us, scaling up often includes bringing on extra help. For some, this is a relatively seamless transition. For others, having to take on the added task of supervising or overseeing other people may not come naturally.
To help prepare, try to determine your leadership or managerial style. Leadership styles can range from being an autocratic leader to engaging in more of a hands-on, participant style of leadership.
Because I have a tendency to focus on motivating and inspiring those around me, I consider myself a transformative leader. Before I scaled up, I sat down and I thought about the demerits of this type of leadership style; specifically, I have a tendency to give people third, fourth, and fifth chances after they mess up.
This may be great for intrapersonal relationships, but I knew that it would cause problems as my business grew.
As such, I decided to surround myself with people who were more detail-oriented and results-driven than I am. While I focus on the bigger picture, they make sure that we have met or exceeded our clients’ technical and business expectations.
Their managerial style could be described as transactional, which is “a straightforward leadership style with a focus on work, reward and processes that drive consistent results.”
Knowing that transactional relationships are not my strong point better equipped me to identify what I needed others around me to do. The more that I understood how I led before we grew, the more I was be able to take on this new role without feeling as if I was being compartmentalized or being forced to do something that made me feel uncomfortable or compromised.
As a result, I can be my clients’ biggest cheerleader and still run a company that is results-driven.
As you grow, so does your liability–and your overhead.
Scaling up is not just about having employees. It is also about how the addition of new products and services can lead to greater costs.
For example, initially, I did not take credit cards because most of my clients paid by other means. As I scaled up, I decided to add new products, such as book covers and press releases.
Perhaps it was a coincidence, but around the same time that I added these new items, potential clients started asking about credit card payments. So, we started accepting credit cards. Sure 2.9% to 3.1% of a sale may not seem like a lot, but for large ticket items, the fees can add up and decrease your revenue.
However, this new overhead was necessary for us to grow. Today, credit card sales account for 60% of our payment methods, which means that I now have to factor in processing fees when we do our projected budget.
Another minor detail that often gets overlooked is insurance. Make sure you increase your insurance coverage and protect your assets. Being an entrepreneur has many advantages, but there are also limitations as it relates to your ability to grow and expand.
As such, your insurance needs will often grow and expand as your business does.
Before you scale up, make sure you understand how it will affect your liability. Consult with a licensed insurance agent who can make sure that your coverage is aligned with your needs. He/she will be able to help you understand if your current policy, such as umbrella insurance, is the best option for a business of your size.
You can do it!
Like anything attached to progress, growing pains may be inevitable. By being proactive before you scale up, you can identify the required puzzle pieces before you start putting it together.