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How to Scale Your Business Without Overtrading

By 14/07/2022June 12th, 2023No Comments
Scale Your Business

When it comes to growth, the natural focus is on selling more. However, when it comes to scaling a business, it’s not quite as clear to see where the focus should lie.

That’s because, while the two terms are often used interchangeably, there is a difference. ‘Growth’ refers to increasing revenue at the same time as increasing resources. As you sell more, you utilise greater resources to manage the demand.

‘Scale’, on the other hand, refers to increasing revenue at a quicker rate than you’re increasing resources. It’s hugely beneficial. But it’s important to remember that scaling too quickly can result in overtrading; a major risk to any growing business.

What is ‘Overtrading’?


Overtrading occurs when businesses boost sales and increase revenue beyond what they’re able to handle. It may be that there isn’t the necessary stock to satisfy the number of orders coming in. It might be that a business doesn’t have the cash to handle the additional demands that come with growth. Or it could be that there’s an increase in workload that cannot be managed effectively by the existing team.

Whatever it is, overtrading can be devastating. It can result in low profit margins, lack of cash flow, excessive borrowing, loss of supplier support, and reduced customer trust. Ultimately, overtrading could contribute towards business failure.

Trading for growth? Absolutely. Trading for scale? Not so much. While sales obviously play a big role in scaling, it’s important to consider other ways to scale in a more sustainable way that drives long term success in the future, rather than risking it.

Sustainable Scaling Solutions


Through the utilization of more sustainable scaling solutions, businesses may find it easier to increase revenue at a quicker rate than they need to increase resources.

Here are 4 simple solutions to get started:

  1. Set realistic targets

Setting realistic and achievable targets for scaling can help businesses to increase revenue without going beyond their current capabilities. It provides organizations with the freedom to scale in ways that best suit them, while simultaneously providing entrepreneurs and leaders with confidence that they’re not taking on more than can be accommodated. Remember… It’s OK to say ‘no’ to growth opportunities.

  1. Focus on CLV

When growing, it’s important to bring in new customers. When scaling, however, it may be a smarter approach to focus on maximizing customer lifetime value (CLV); on squeezing more value from those that are already onboard. Ask yourself: how can products, services, solutions, and processes be optimized to improve CLV and generate more revenue without the need to manage a larger customer base?

  1. Utilise automation technologies

If you handle operations manually, you’ll soon discover that a rapid increase in revenue means a rapid increase in workload… and the need for more resources to handle it. That’s why it can be a good idea to look into automation technologies that minimize the need to bring in additional resources. Xero, for example, can send invoices automatically to 1 customer, or 1000, with the same amount of ‘effort’.

  1. Seek support

Of course, every business is different. The scaling solutions that are best for one may not be right for another. That’s why sustainable scaling relies on having access to the best possible support. Working with an accountant, like our team here at Direct Peak, can help. We work with organizations to generate real time insights into business and financial performance, helping to identify viable opportunities to scale.

Selling more isn’t always necessary for scaling up. To uncover more about sustainable growth and small business scaling, get in touch with our team of experts.

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Great Reasons To Outsource Your Payroll

At Direct Peak we know how tricky it is as a business owner. There is so much to manage, including marketing, sales, suppliers, customers, employees, pay roll, cash flow and more. We are a small business ourselves and we know how busy things can get – and how many plates business owners feel they need to keep spinning!

This is why we offer a service so you can outsource your payroll. We can take one of those many spinning plates away from you so you can focus on your business. There are other ‘spinning plates’ that we can take away from you so you’re able to spend time doing what you enjoy and what you’re good at. However, in this blog post we would like to talk about just some of the reasons to outsource your payroll.

  • Large businesses may have the budget to afford and maintain a large payroll department. But as an SME business it can be costly so why not outsource your payroll? Calculate the time, effort and cost of doing payroll in-house. This includes the payroll software costs, admin time, training costs, printers, printing and payslip distribution. Then take a look at a quote for out outsourced payroll services. You’ll quickly see you can save time, effort, money and stress by outsourcing your payroll.
  • Training staff can be time-consuming and costly, especially if there is nobody in the business to offer the training. When you outsource your payroll you are giving it to the professionals. We manage payroll for businesses day in and day out. You’ll know you’re in safe and fully trained hands when you use Direct Peak for your outsourced payroll.
  • Payroll doesn’t need to stop when someone goes on holiday, which can sometimes be the case when it is managed in-house. We have a team of payroll specialists that will look after your payroll for you. It doesn’t matter when you choose for your employees to be paid. We will make sure they are paid on your chosen date. Our holidays and time off will not affect your business or payroll.
  • There is not much worse for an employee than payroll mistakes. These can be painful, upsetting and stressful for an employee. If a payroll mistake happens more than once it can risk the loss of that employee to your business. Mistakes happen when people are doing more than one job or have multiple roles in the business. This is where outsourcing your payroll can help as you will have someone dedicated and focused on your payroll to ensure there are no mistakes.

If you’d like to know more about outsourcing the payroll for your business then why not call us now. We would be happy to give you a quote and tell you how we can help.

    Steve Marshall
    Steve Marshall
    The whole team at Direct Peak have been amazing to work with. Everything we have been looking for from an accountant. Thank you from Acoustic Associates
    Luke Tyler
    Luke Tyler
    The Direct Peak team are exceptional in all they do. They demystify my questions on accounting, offer clear, sound advice, and help me to make informed decisions about my business.
    Don Wiid
    Don Wiid
    Karl Newman and his team help us with our Xero accounts system, making sure it is accurate and up to date. The real value though, is Karl's experience as a management accountant, providing indispensable advice on a monthly basis to ensure we keep growing.
    Craig Sawyer
    Craig Sawyer
    Direct Peak are the perfect accountants for me. Always helpful and friendly. They take away any of my accountancy headaches which allows me the time to focus on my business. Would highly recommend them and do to any business owners I can. Thank you all !
    Kelsey Brace
    Kelsey Brace
    I've worked with Karl & Direct Peak for years. They have always provided great service and advice. Highly recommeded!
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    Sana Hanassi-Savari
    Great service, I would highly recommend them. The team are friendly, always around to help and very knowledgable.
    Simply Antivirus
    Simply Antivirus
    Direct Peak was the right choice for us. Outstanding friendly service. The team are highly knowledgeable regarding tax and financial matters, and they have been an asset to the running of our business. Very approachable and have an answer to all my questions. Highly recommend them! Very well done guys!
    catherine Johnson
    catherine Johnson
    I recently changed my Accounting to Direct Peak, mainly due to Karls brilliant support with advice regarding making Tax Digital and around my business growth intentions. Having run my own small business and being with my previous accountant for 13 years, I have been SUPER impressed with every aspect of the move - the advice, the support, and mostly the friendliness of the team and their willingness to want to help. Eve has been so amazing at supporting me to make the transition to Digital VAT returns - I cannot recommend Karl and his team at Direct Peak highly enough - Thanks Guys!
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    Peter Baker
    Karl has been outstandingly patient and generous with his time. I cannot recommended Karl enough. He has helped massively in starting up my own company.
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