When is the good time for your startup or solo venture to grow in size?

First, let’s ask ourselves what are the logical growth expansion options entrepreneurs face: in order to grow, a company need to scale, create systems and processes, lower costs and increase capacity to produce or deliver a service and in most cases, increasing the capacity means increasing costs. It can be by expanding to new locations, hiring or buying new equipment for example

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Your current capacity VS Marketing Opportunities

If you find yourself at a crossroads where you think you could be helping more clients and that you need to increase your capacity to deliver, maybe you should consider this first:

Increasing your capacity to serve clients, even though it sounds like the logical next step to any organization, can be counterproductive and might endanger the integrity or your business.

As David C. Baker says (“the expert’s expert”), the concept of “right sizing” depends on your ability to judge the gap between the opportunities and your capacity to fill said opportunities.

If you are getting close to the limit where your capacity and the amount of opportunities meet, you will find yourself in a situation where every transaction counts. When that happens you will start losing the ability to say NO and will need to bend and adjust to every client’s need to stay afloat and cover your new capacity expenses, losing then your integrity and leaving your positioning controlled by the fluctuations of the market.

Leaving a comfortable gap between the demand and your offer it’s very important. You can control your offer, but you can’t control demand.

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What does integrity mean to your product/service?

Being able to say NO to a client that is not the right fit is extremely important, if you never say no, that might mean that you would do anything for everyone, and this is the best way to become a commodity.

A commodity is a product/service that is bought without caring about the brand or who is selling it, and that is extremely compared to competitors, mostly on price. That means you will need to be cheaper to compete, leaving once again your offer vulnerable to market fluctuations.

Integrity and positioning are great tools to tell your audience what you do, and especially what you don’t do. It allows you to control your offer, your price and who you serve.

Did you define that clearly ?

Defining is no enough, you need to communicate it externally and internally. Your niche audience has to feel like your brand is made just for them and that you understand their problems. But you also need to cultivate a culture inside your company so that everybody know what the brand stand, this will help create a consistent experience for your customers.

So before you consider hiring or increasing your production capacity, make sure you have nailed down your positioning and that you can clearly state what is your core offering and niche.