There is a difference between scaling and growing a business – and it’s this that may be the crucial factor in ultimate failure or success. If you’re keen to ensure that your enterprise grows and you’re ambitious to take it beyond just a single state it’s important to be able to combine the two. One can also affect the other – for example, how scalable your business is can affect the way that it is able to cope with growth.
Scaling vs. growth
Growth tends to be an aspiration for the business. It may be something that comes in spurts and which is often driven by sales and marketing. Growth is a goal – an end result. Scalability, on the other hand, is a structure that can be created for the business if it has been set up in the right way. For many enterprises, scalability is a capability that never actually gets exercised.
How to scale your business
There are some great examples around of how to scale a business, such as huge multi national brands like McDonalds. There are now more than 37,000 branches of McDonalds across the world, representing incredible success in scaling terms. The model that the fast food giant has used is built on the functionality and replication of the business. So, how do you create something similar for your own brand?
- Look at the leverage that you have. This is essentially whether you can do the work once and then benefit from it repeatedly. If your business needs you to be at the heart of it in order to be successful then it’s going to be very difficult to scale – you would essentially need to replicate yourself each time you wanted to scale up, which is likely to be impossible. It’s important to look at the leverage your business has and where it needs more of it. Then identify how to make each sale cost less to create more.
- Identifying the opportunity. What is the size of the opportunity that exists when it comes to scaling your specific business? Are you going to experience ease when it comes to making a sale or is your product or service the next big thing but no one is aware of it yet.
- Will your product or service sell itself to a certain extent? If a lot of heavy marketing is required in order to generate sales for your business then it might be difficult to scale up. The key is to reduce the reliance that you have on something like advertising or marketing in order to make sales. If you want to achieve market share and become a brand name then your product or service needs to have a route to market that doesn’t necessarily involve a huge marketing budget in order to get it there.
Every business is different but many experience the same obstacles and opportunities when it comes to scaling up. Once you’ve worked through the opportunity, leverage and a route to market, the way forward to scaling up should be clear.
