Many owners of small businesses are scared to scale up their businesses. Fearing that they will need to invest in the company could lead to financial ruin. Although this is true in certain situations, some solutions offer low-risk options for most businesses.

Many economies are supported by small and medium-sized businesses (SMEs). They account for 99% and 99.9% of all businesses in the European Union. Many of these businesses struggle to scale up their efforts and have productivity problems. This is particularly true for companies in the early stages, which are often short on cash.

According to a study by McKinsey & Company, SMEs can be sub-segmented into six categories to give you a better understanding.

1. Start-ups in the early stages of development
   1. Plans for early business growth
   2. Stage of proof-of-concept
2. Established & successful start-ups
   1. Minimum viable product (MVP), established
   2. Marketing, sales, and other processes
3. Medium-sized businesses can be grown
   1. Minimum annual revenue of $10 million
   2. The solid business model that allows for medium growth
4. Medium-sized businesses that are struggling or insolvent:
   1. They have grown to the point where they are no longer viable
   2. Staying profitable is difficult
5. Small businesses that are locally focused
   1. Employing less than 10 people, and earning less than $1 million annually Annual revenue
   2. Demand is strongly linked to growth
6. Informal micro businesses
   1. Most freelancers and home-based business owners    
   2. Credit is often needed to expand a business.

This blog post will focus on the second group, but some home-based businesses may also be able to benefit from the following tips. The only one requirement is that the owners are running a digital business.

1. Productize your services 

Selling digital products/services to small businesses is a clear advantage over selling physical goods. Scaling up your output is much easier than investing in large capital. There is nothing to produce.

Nevertheless, some companies have already produced their services. Some of these companies don’t even know it. Let’s take the example of book publishing. This industry has seen a wide range of professionals leave the publishing industry to start their businesses. They have started their businesses. These three are the most common in publishing.

1. Book Designers: They specialize in interior design, covers, and typography. Some might also be able to create book trailers and social media graphics.
2. Editors, They will ensure that your book flows smoothly, hooks the readers, and is free from errors.
3. Marketers will attempt to get your book into the hands of anyone who may be interested.

They all know how much they cost. They can bundle their services together into one-time fees. A monthly recurring service model could be set up by marketers in New York if a book is to be promoted over a prolonged period. Let’s look at recurring services next.

2. Change to a recurring services model

At times when they feel like they aren’t able to grow, small and medium-sized businesses might run into a problem. Many times, growth is affected by moderate cash flows. When you sell one-off services, it is difficult to plan. While one month may be a great time for revenue, the next might not.

A recurring service model is a way to predict the future. Or at least to offer it alongside one-time services. A recurring service model, combined with modern payment options, has two benefits, as mentioned in this SPP.co blog post.

1. They enhance the customer experience.
2. They can reduce the manual workload for businesses.

Let’s now look at some examples of service types that are recurringly successful. These are some of the ideas that digital companies already use:

• For small businesses that need graphic design, designers offer recurring design packages. These can be on a monthly, quarterly, or annual basis. These packages can be used for social media campaigns, blog posts, or infographics.

• Content writers combine their one-time writing services to create bundles. Clients can subscribe to a recurring program that allows them to request a set number of blog posts per month.

• For a monthly fee, social media experts manage whole social media accounts for clients. Each monthly package contains a small number of profiles.

Design Pickle is a well-known recurring service provider. Design Pickle offers unlimited options in exchange for a fixed monthly/annual price. This is a unique business model, but it must be carefully calculated. Each service should have a defined scope and some kind of limit that doesn’t cause financial problems. Some providers limit their work to one project at a given time.

3. Analyze your current prices

Many small-business owners fear increasing their prices. However, it is not cheap to invest in new processes, tools, and other quality-of-life improvements. These costs will eventually have to be recouped.

It’s hard to decide whether to raise prices. However, business owners can maintain the same price for existing customers. The grandfathered customers will continue to be covered, but new customers will be able to take advantage of the new pricing structure.

Another difficult decision is: If we create new features/products do all customers get them? The grandfathered plans must be canceled at some point. Loyal customers will then move to a new pricing structure. Customers are often upset about higher prices. However, it all boils down to your value proposition. These are some things that you can communicate to your customers:

• Let the customer know that they have been with an old recurring plan for X number of years and have saved X amount.

• Remind your customer that they have access to some new features you have been working on.

• Make loyal customers feel special because they have stayed with you for so long. For example, you could offer to include them as part of a case study.

Keep in mind that a small business’s most important goal is to decrease churn and retain customers for as long as possible. If recurring revenue is lost because of canceled plans, a new pricing structure won’t be beneficial.

4. Behavior-based onboarding reduces churn

A happy client can be a loyal customer for life. It’s not easy to do, but businesses need to invest in processes that will ensure a long-term commitment.

Most companies have trouble with retention after signing up for a free trial. This is how their leadership journey might look:

• Lead land on a landing page that is marketing-focused.

• They sign up for a trial after being convinced by the page or through marketing emails.

• They should experience a trial period that leads to an “aha” moment and then they will be able to convert into customers.

During the trial period, friction moments are common. It doesn’t always lead to the “aha” moment. Here are some reasons why this is so.

• The trial period is too brief and cannot be extended.

• To test a product or service, leads must set up too many things.

This issue can be solved by creating an onboarding experience that combines self-service and human support. If the lead logs into a client portal they will see links to the help center, tutorial videos, and contact information (via chat or email).

It’s possible to trigger automated emails based on user behavior with automated campaigns. A nudge could help a leader to move on to the next step if they have completed one step but not the second.

This can be done by using an analytics platform like Heap and a powerful marketing tool such as Marketo. Segmenting users can be done based on their behavior. This allows businesses to send emails when users have completed a specific action (or not).

Last Thoughts

Owners of small and medium-sized businesses have more options to scale up and grow their businesses. It’s becoming more difficult than ever to keep ahead of the competition in every niche.

Every company is unique, so it must weigh all options and decide which tips are most useful.