Scalable suppliers - Does your business size up

The day has come. You’ve received a huge order, larger in scale than you ever thought was possible. First will come the excitement and celebrations. “We’re that good! Finally, the recognition we deserve!” , You dance around the office in fits of joy. Then reality hits. “We can’t possibly do it! We don’t have the equipment, the staff or the time.”

If this kind of panic-stricken scenario rings alarm bells for you, then it’s time to get to work on the scalability of your business. You want to be ready to implement your scalability strategy if that coveted, game-changing customer wants to do business with you, you need to know how you’ll make it happen, and how you do that quickly.

A positive outcome from the massive order is that you’ll finally have the funds to buy the equipment you need to deliver it. However it’s a bit like putting the cart before the horse. You must start the right way around.

Get your ducks in a row

Establish your starting position. You currently have what you need in place to satisfy existing demand. This includes adequate equipment, personnel, office/factory space, technology, expertise, inventory, insurance and a range of systems from sales and account management through to marketing, manufacture and delivery channels. Now … what if you had to increase output by thirty per cent? Sixty per cent? One hundred per cent?

Scalable suppliers are those who have done their homework and know what it takes to accept a business-building order and fulfil it with ease. Implementation can often be a vastly different reality than it appears during the theoretical planning stage, but thanks to these painstaking calculations, fulfilment is attainable.

Raising capital

How quickly can you access capital to fulfil an order? It’s vital to explore your options well in advance and have funding available to draw on at short notice. This could entail a visit to your bank manager to discuss such contingencies, or you might seek investors who are willing to finance your first big contract. Alternatively, you might want to approach Indigenous Business Australia about the possibility of a capital loan. There are plenty of options. You could contact the financial institutions that are Supply Nation Members and see if they can point you in the right direction. What matters is that you weigh them up and have them ready to proceed when appropriate.

Keep your head out of the sand

When contemplating scaling a business, it is vital that no rose-tinted glasses are worn. The financial commitment required can be frightening. However balanced against the potential for additional revenue, it is certainly worth exploring. A brand new business plan will help to clarify the reasons for choosing growth and will become a critical document to be presented at strategy meetings with accountants, bank managers and solicitors, not to mention the more tangible providers such as machinery manufacturers, telcos and freight forwarders.

Seek professional advice

Just as you’ve sought the expertise of a range of business specialists to reach your current position, you will have to consult with professionals, who are better equipped to advise on your ability to achieve your target. They will be practiced in dealing with organisations whose turnover and net worth are significantly higher, and of course, whose risk and liability are greater. Ask trusted associates for recommendations on accounting and law firms, insurance providers, IT specialists, financial advisors, human resources and risk management consultants.

Consider a partnership

If growth and scalability seem out of reach given your current level of experience, it may be wise to seek a partnership arrangement with another Indigenous supplier. As the saying goes, two heads can be better than one and together, you can take advantage of each other’s strengths and absorb each other’s weaknesses. As long as the arrangement is formalised by the appropriate professionals to avoid any legal wrangles, the resulting partnership can remove the barriers to growth and ultimately reap success.


You can also consider outsourcing elements of the work so that they are managed with the correct degree of expertise. For example, if your business owns three buses that transport tourists around to scenic locations and a lucrative opportunity comes your way to serve five times the number of tourists during peak season, then you simply hire the additional buses required on an ad hoc or seasonal basis. Keep in mind that this arrangement has to be formalised in advance so that you can count on the buses being available when required.

Naturally, owning the additional buses would deliver a higher profit margin, but this needs to be weighed up against the capital outlay required, and any interest rates for loans secured to finance the purchase.

Know when to fold ‘em

Scalability is a natural ambition for any business. But it doesn’t mean go for gold at any cost. Astute business owners and entrepreneurs know how to differentiate between sensible opportunities and the potential for disaster. If in any doubt, then the requisite wisdom can come from a selection of objective, experienced advisors who will not mince words about your business’s capacity for growth in the time frame you suggest.

It doesn’t hurt to be armed with all the black and white facts you need to make an informed decision. Allowing the details to simmer away in your mind until you feel ready to proceed will provide the fortitude to simplify the decision making process when the time is right.