How elastic is your business? (Why scalability is key to surviving peaks and troughs)

What goes up must come down – right? So how do you set up your business to be able to cope when demand is high, without risking huge financial investment when it all slows down?

The trick is to develop processes and systems which allow your resources to stretch when needed, without overextending financial risk, so your capability can expand and contract according to demand, without needing to constantly readjust the underlying staffing levels. You want your business to have the elasticity to flex – and relax – without too much impact.

So how do you do that, then?

Scalability

You’ll hear the term “scaling up” a lot these days. It’s often applied to the startup business model, which begins with one or two people working manually on a small scale before hitting that period of expansion where things need to get better fast to cope with demand.

So far, so “nothing new”. This, surely, is the basis of every business model in history, give or take.

But what differentiates the truly scalable model is that it happens in a highly efficient and agile way: it puts into place systems which enable rapid expansion of capability without necessarily needing expansion of resources to let it happen.

In effect, it’s about doing more with less.

Can you give me an example?

Think about how travel companies used to work.

You’d go into a high street branch and take a seat, flicking through a few catalogues while you wait. Soon enough, an advisor invites you over and you have a chat about the kind of holiday you’d like, where you’d like to go, how long for, who’s going, etc. You might look through more brochures or look at some websites to see what’s on offer. You narrow down your options, start getting some prices, and then you go away to think it through. You make your choice, you get it booked, you pay. All done.

Now think about how many travel companies operate today.

You go to a website, plug in your dates and details and your options are given to you, with pricing and all the extras on offer. You click, you book, you’re done.

In the time it took one advisor to take a brief from one family, 200 families could have booked their holidays.

Of course, it’s not always the same experience or level of service but the end result is often the same. And – critically – not everyone wants the in-depth experience these days. Some do, of course, but the majority want a different way. Customers are changing, and systems of serving them must adapt to keep pace.

Changing expectations

In merchanting, you don’t want to drop the whole customer experience part of course. But it is worth considering what customers actually want these days. Recent research and reports suggest that the rise of online trading, accelerated by Covid, has changed customer expectations irrevocably – tradespeople don’t want to return to a world of manual selection and in-branch browsing every time. They like the ease and convenience of online information, pricing, browsing and booking, and they aren’t always looking for the personal touch.

That doesn’t mean that service isn’t just as important as it always was. It’s just that the definition of service is shifting. Convenience and time-saving have become as important, if not more so, than price and personal focus.

Do more with less

Back to the point in hand. If you’re using a website to attract more customers, and demand is through the roof, how do you make sure you can meet that demand without leaving your business riskily over-exposed financially when the boom fades away?

Better information

One of the key factors is better information. Fully integrated, real-time information across the business, so you can see instantly what’s where, and what needs to go where, when.

When you can trust the information your system is telling you, when red flags are waved fast, and when you know where to focus your attention, you can be more productive and ensure better availability and service.

But of course, better information only goes so far by itself. And to leverage the value of it, you need….

Better accessibility

Better information is no good if you can’t access it, so great accessibility is also critical. Being able to see the information from anywhere at any time is a major step change. No longer do you need to be at your desk, or calling the office to check whether a particular delivery turned up on time.

Better accessibility means better visibility, and that leads to…

Better communication

Effective communication is essential in any business, and when things are busy, you need to know that everything is where it should be, and that issues are being dealt with fast. When your information is easily accessible, up to date and accurate, it enables better communication within the business, but also with suppliers and customers.

Taking the appropriate action when anything (good or bad) happens in the business relies on great communication, which in turn enables….

Better responsiveness

Everyone makes mistakes. We’re all human, and things go wrong from time to time. But being able to act fast to rectify errors is an essential part of successful business. You can’t fix what you don’t know is broken, so having systems in place which alert you to the issues and give you a heads up in good time means you have a fighting chance of fixing it before it gets out of control.

No-one has the headcount in a business to be able to constantly monitor every potential issue or pre-empt everything that could possibly go wrong. And that’s why you need….

Better focus

One of the core principles of an agile, scalable business model is that you are able to focus on the areas of the business where focus is most needed at any given time, rather than trying to do everything at once.

Using an intelligent ERP system which flags the issues, pre-empts the gaps and alerts you to the things which really need urgent attention is a huge part of making your business scalable. Better focus helps you manage stock more efficiently, ensure smoother logistics planning and ultimately, provide better service – without needing twice the number of staff to deliver it.

Better business

Better business is essentially about being able to deliver the best possible service with the least possible resource. If every member of your workforce is equipped with tools to help them accomplish every task more quickly, and more accurately, then it stands to reason that the compound effect is pretty significant. Productivity goes up, efficiencies increase, waste reduces, profits go up. When customers get great service, they are quick to spread the word – which often brings in more business.

Efficient, effective systems are the lifeblood of good business.

And your ERP system can help it flow better.

Better ERP

If you want to scale up, without extending risk, your ERP system is a great place to start. Investing in a cloud ERP system like Merchanter facilitates every one of the steps outlined above, laying the foundations for effective eCommerce and helping every member of your team work more productively with less effort, freeing up the time and resource to focus where focus is needed, and deliver better service for your customers.

Try it yourself

If you’d like to take Merchanter out for a spin, just register here for login details and you’ll get 30 days of cost-free, pressure-free online demo time.