50 tips to scale up your business

Small and medium enterprises act as the backbone of Kerala's economy. They introduce innovative ideas, supporting people at the local level in countless ways, are. And most importantly, they create jobs in the country.

However, many small and medium entrepreneurs are unable to move successfully to the next level after the initial growth. Entrepreneurs will have to face various hurdles on the way. Limited resources, be it funds, skilled employees, fierce competition from the market, being rooted to traditional styles and not embracing professional style are some of the things that prevent growth.

Here are 50 tips that new entrepreneurs to veterans must keep in mind to expand their business.

Attention freshers

Everyone starts a business to succeed. But sometimes you fail. How to avoid this?

1. Anticipate the market 

Be it manufacturing, service, trading, farms, start-up or brokerage, investment should be done by anticipating what the market wants. Acquired knowledge or personal interest is not the yardstick to start a business. The question is, does the market need your product or service? 

2. Understand the requirement

Micro-entrepreneurs may not be able to conduct extensive market surveys. The market potential of a product or service can be understood by holding discussions with potential buyers, distributors, sellers, and users. The enterprise should be born out of market demand.

3. Start with a small investment

The motto should be: Start small and grow big. It has many advantages.
•    Starting with less investment will be less stressful for the entrepreneur
•    It will be easy to find the market in tune with the production
•    Production can be scaled up, depending on marketing potential
•    Too much technology is not needed in manufacturing and distribution processes
•    It will be easy to manage sales on credit
•    Better profit margins as microenterprises depend on direct sales 
•    Small enterprises can be converted into eco-friendly family businesses 
•    Production cost can be reduced with the help of family collectives 
•    Can get small bank loans without collateral, if required 
•    Enterprises consuming less than 5 HP power need not be licensed by local authorities 

4. Profit: The primary goal  

Even though the investments are small the aim should be profit.
•    The survival and success of the enterprise depends on profit
•    Profits are needed to make more investments and expand the enterprise  
•    Profit is the benefit that accrues to an entrepreneur. This transforms to reinvestment
•    Financial institutions and others recognise only those ventures that generate profit 

5. Take loans only when you are in dire need

The total investment required should be calculated upfront. The maximum investment must belong to the entrepreneur. Only the rest of the amount should be taken as a bank loan. As per the Reserve Bank's guidelines, bank loans are available up to 80% for fixed investment (excluding land) and 60% for recurring expenses. (Entrepreneur's share will vary depending on the schemes). Entrepreneurs should take care to minimize bank liabilities in the initial stages.

6. Don't take hasty steps, expecting subsidies

Do not take excessive loans expecting government subsidies. In self-employment projects, the gap between availing of the loan and starting the project should not exceed six months. It will be a big relief for the entrepreneurs if they can secure government subsidy for loans, 

7. Know the rules before investing

The existing rules should be well understood to invest. Enterprises should not be started in paddy fields, environmentally sensitive areas, Coastal Regulation Zone, areas reserved by the Town Planning Department and other restricted areas.

8. The nature of the enterprise should decide the building   

The location should be decided, based on the nature of the enterprise. If a manufacturing venture is set up on the top floor, it will incur additional costs to get the goods there. Beginners should avoid places that incur heavy monthly expenses. If you can start the business in industrial parks and sheds under the control of the government and government agencies, it will be quite beneficial.

9. Try to diversify

Enterprises need not do well forever. After starting a business, think of new products according to the changes in the market. Give consideration for expansion, modernisation and diversifying the enterprise.

10. Get firsthand information

Entrepreneurs should be ready to modernize production, distribution, and marketing. Participating in national and international exhibitions will be of immense help in this regard. Even government grant is available for this. Continuous innovation is necessary for the enterprise to succeed and become a role model.

The initial stages: What to look out for   

11. Business models

Instead of relying on just one business model, try to look at multiple business models. A wise choice of suitable models like business to business (B2B) and business to consumer (B2C) will increase the reach of the business and lay the foundation for growth.

12. Income channels

By relying on different revenue models, it is possible to earn income through various methods. Apart from the direct sale of products or services, you should also tap other ways of earning income.

13. Omnichannel marketing

Adopt all marketing techniques, including digital marketing, where constant communication with users is possible and helps to strengthen the relationship. Make a customer-centric marketing style should form the basis of the business culture.

14. Don't hesitate to quit at a loss

If you feel that unprofitable products/units cannot be made profitable, discontinue them without wasting any time. This will enable the business to grow by focusing on the profitable products and units by letting go the loss-making ones.

15. Growth fund

At least 10 to 20 percent of annual profit should be set aside as growth fund. Growth funds can be used to rapidly adapt to technological, marketing and distribution changes happening in the industry and stay ahead of competitors.

16. National and international markets

Do not limit the market to a small region. Aim for growth in national and international markets. Support from government agencies, trade associations, and private agencies can be sought for this.

17. Research & Development

It may not always be possible for beginners to create large research and development facilities on their own. However, consistently observe changes around and develop innovative products and services. It should be a continuous effort. 

18. Production and service costs

Maintain tight control over the costs of manufacturing products or providing services. This will help avoid losses in a ‘price war.’ A professional approach is necessary when selecting raw materials, hiring skilled employees, and utilising resources.

19. Modern technology

Latest technology will assist you in creating competitive, high-quality products at lower costs. Use latest technology while choosing machinery and wherever else possible.

20. Strategic alliances

Form strategic alliances. Efforts should be made to create alliances and partnerships with other MSMEs, marketing and distribution agencies, or any organisation that can strengthen and expand the business.

Check these out

21. Tune your mind for growth 

The first requirement for growth is a collective desire and preparedness of the leaders. In many organisations, while one or two persons may be willing to take risks and grow, others may oppose it.

22. A scalable business model

Not all business models are suitable for a smooth growth trajectory. Therefore, if growth is the goal, a model that supports growth should be chosen.

23. Be technology-friendly

Business growth will be easier if all departments of an organisation, from marketing to customer relationships, are managed with the help of technology.

24. Low-cost growth plans

Capital is often needed in proportion to growth, a challenge for many businesses. However, growth is possible through models like franchising and joint ventures that do not require large capital investments.

25. Explore new markets

The limited size of a market often hinders business growth. Therefore, continuous efforts should be made to think about expanding beyond the current market.

26. Diversify marketing techniques

Growth can be enhanced if you develop innovative marketing techniques that differ from those of the competitors and help build brand image.

27. Systems and processes

If the goal is to expand the business, all operations should be streamlined through precise processes, making growth easier.

28. Bonding with customers and employees

Maintain strong relationships with customers and employees from Day One. Avoid unnecessary stubbornness. Don't waste energy, time, or peace by squabbling over minor issues.

29. Say 'No' to luxury

Don’t rush to acquire luxury cars, homes, or other assets when the business begins to thrive. There’s no need to sponsor programmes merely to show off. Business and brand should always be the priority.

30. Recognise your shortcomings

You should also recognise the shortcomings of your product or service. Always make promises that you can keep. Authenticity and honesty in interactions will be beneficial in the long run.

31. Clarity of vision

Your business journey must have a goal. It should also inspire the team. This is essential for growth.

32. Constant reviews

Market trends constantly change. Continuous reviews will help assess whether your business strategies align with these trends and remain competitive.

Financial discipline

33. Ensure good cash flow

Never take your eyes off the cash flow. There should always be enough money on hand to cover day-to-day expenses and unexpected financial outflows. Running a business without adequate funds in times of uncertainty can be challenging.

34. Control your costs

Expenses must always be tightly controlled to sustain the business. Don’t spend money on anything that doesn’t enhance productivity. There must be a commitment to ensuring every rupee spent gives you an adequate return.

35. Explore modern funding methods

Most people begin their ventures with funds from family and friends in the initial phase. Once you decide to expand, private equity and venture capital should be considered.

36. Treat the bank like your business partner

From the very beginning, establish a strong relationship with the bank/financial institutions. Keep your accounts accurate. If there’s any possibility of delay in loan repayments, inform the bank in advance.

37. Be prepared for financial downturns

Unexpected events can occur in the world of business. Hence, moving forward without taking risks is not the right approach. Always be prepared for scenarios like economic recessions. Maintain a contingency fund.

Technology is key to business expansion

38. Invest in digital transformation

Invest in digital tools like ERP systems. This will streamline business processes and enhance productivity.

39. Data analysis is crucial

Instead of relying on hunches, make decisions based on data analysis. Data analytics will help make informed decisions in areas such as changes in customer preferences, inventory management, and marketing.

40. Automation is a necessity

To save time and resources, introduce automation in repetitive tasks. Everything from accounting to inventory tracking can be efficiently managed through automation.

Make your brand stand out 

41. Be unique

Kerala’s products have a distinctive brand image within India and abroad. "Kerala Brand" is officially recognised by the government. The goal should be to become a strong brand.

42. Every brand needs a story

"The most powerful person in the world is the storyteller," said Apple’s founder Steve Jobs. In 2007 Jobs introduced the iPhone through the art of storytelling. Today, every successful brand has a story that captivates people. Your brand needs one too.

43. Social media marketing: The survival kit

Ensure a strong presence on social media. It will help maintain continuous engagement with your target customers.

Customers and employees: Connect well

44. Provide unique experiences

It’s not enough to offer just a product or service. Each customer should be provided with unique experiences. For this, it’s important to understand their changing preferences, train employees accordingly, and use the right tools for customer service. Complaints and inquiries from customers should be addressed swiftly.

45. Hire employees who gel with the culture

Every organisation has its own culture. When hiring experts and professionals, it’s essential to check whether they are a right fit the company’s culture. New hires should align with the company’s values and culture.

46. Skilling and empowering employees 

Provide continuous training to enhance team members’ skills and empower them. This will boost the venture’s competitiveness and productivity.

47. Growth avenues of team members

As the business grows, the team should understand that they too will climb up the ladder. Outlining the career avenues clearly for each employee will make business expansion a shared goal for the team.

48. Team building

The organisation should foster a culture that encourages teamwork. It should be built on the foundation of collectiveness. This will open the doors for fresh ideas to waft into the business, bringing about change.

49. Recognise the role of employees

Entrepreneurs should give each team member an opportunity to make their own contribution. If the business allows employees the freedom to think independently, make decisions, and take the lead in various tasks, they will manage the daily operations very well. Entrepreneurs can then spend time focusing on the future.

50. Clarity in communication

Even in times of adversity, communicate clearly with the team, bank, and business partners 
about what’s happening in the business, in a composed mannerr. Transparent communication and strong leadership will help entrepreneurs and ventures navigate the challenges that they face frequently.
 
The tips given above have been sifted from national level studies and with inputs from entrepreneurs and consultants.

Contributors: TS Chandran (Former Deputy Director, Department of Industry and Commerce), Dr Sudhir Babu (Founder & Managing Director, De Valor Management Consultants), Jimson David C (Director, Hanhold Consulting Pvt. Ltd.), Baiju Nedunkeri, Founder and Managing Director, Technolodge Piravom)