How to Scale a Business: The Complete Step-by-Step Guide

Scale a Business

Keys to scaling a business

The concept of scaling a business is often used interchangeably with growing a business, but these are two distinct concepts. Take successful startups or new small businesses: Without a clear definition of scaling a business, we mistakenly think of these companies as successful because they achieved massive growth in a short period of time. The reality is, when a company grows too fast, it makes itself vulnerable to a range of problems stemming from not having created a sure foundation to support rapid development. Learning how to scale a business mitigates these risks by ensuring that foundational operations are created that will support growth in the long term.

What is scaling in business? To create a working definition of scaling a business, first consider what it means to start and grow a business. You started your company to fill a need in your market, make a profit and likely fulfill a dream. You need to grow your business in order to keep it profitable and expand your market reach. Many people think of business expansion as “hockey stick growth,” where there is an initial period of linear growth, but once the business hits an inflection point, revenue shoots up sharply.

As alluring as rapid growth can be, entrepreneurs often place their focus on achieving it right away and lose focus on what matters. The problem with that sort of tunnel vision is that it diminishes the importance of the period of linear growth that comes before the rising handle of the hockey stick – that is, the blade. The blade typically lasts about three to four years, and it is where the most important work is being done.

Scaling a business means utilizing this “blade period” to put systems and procedures into place that will prepare you for lasting, profitable development. The blade period is where you establish your core values, your company culture and your brand identity . It’s also where you will develop the client experience you want to provide and create the initial business model when you take your product or service to market. In short, it’s the make-or-break period of any business.

Scaling a business is not easy to do, which is why it should be done as thoughtfully and meticulously as possible. Because in the long run, when you do hit that surging growth curve, you need as solid of a foundation as possible to hold you up. Here are the most important things to keep in mind when figuring out how to scale a business in a mindful manner.

Growing vs. Scaling

Scale a Business

Growing a Business

When a business grows, it can mean its operations expand, its sales increase, it adds more locations, or all of the above. As one part of the business grows, another part grows at the same rate. For example, a business hires more salespeople and so it generates more sales.

Scaling a Business

So, what does it mean to truly scale a business? Scalability, by definition, means the next sale gets easier and costs less. When we talk about business scaling, we are talking about increasing sales while reducing costs and efforts.

The key differentiator between growing and scaling a business is the ease with which you expand. If you can grow sales at an increasingly easier rate, that’s scaling. The business is not necessarily scaling if, as it grows, it gets more challenging to run.

Let me give you a few examples of leverage. If you write a book, you write it once but can get paid every time someone purchases it. If you create a song, you make it once but can get paid every time someone listens to it or uses it in a commercial. If you develop a software, you do so once, but you can keep selling it over and over again. With every additional sale, your profit only increases.

4) Embrace the Zen of Business

An aspect of the business world that’s often overlooked is the importance of perspective. People get caught up in specific projects or campaigns, as they should–it makes for good work and happy clients. But sometimes, it’s helpful to take a step back and look at the bigger picture.

Consider, for example, how much a single consulting job moves the needle for a corporation with $48 billion in annual sales. Not that much, right? How about the significant turnover that big, successful companies experience on a regular basis? Success at scaling your business can be a difficult thing to judge and measure.To truly embrace the notion of scalable growth, an ability to see beyond the “self” is a minimum requirement.

Once a company’s systems reach a certain level of sophistication, there are enough built-in redundancies and fail-safes that the company’s collapse is is far less of a possibility. A highly successful business entity can eventually sustain itself, regardless of who is in charge.


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