There’s no such thing as a healthy, stagnant business. Your business is either growing or declining – there’s nothing in between. And while we can all agree that it’s better to grow than decline, the reality is that not all growth is created equal. If you want to set your business up for long-term success, you must be very strategic in your approach. Scaling should always be the objective.
Growth vs. Scaling
On the surface, they might seem the same. However, business growth and business scaling are actually two separate things.
When a company grows, they’re heavily reliant on cash and other resources to enable the increase. In other words, expenses are growing in lockstep with revenue. A company may gain $50,000 in annual revenue, but it’s taking them $45,000 to $50,000 in new expenses to do so. Gains and losses are evened out, which means the company hasn’t actually gained much value. Scaling a business is different.
“When companies scale, on the other hand, they add revenue at a faster rate than they take on new costs,” Lighter Capital explains. “A company that is scaling may gain $50,000 in new revenue for which they spent only $5,000 on marketing automation tools to allow more efficient marketing to a wider audience. The company’s gains outpaced its losses, allowing it not only to grow but also to scale.”
Growth is linear and resource-intensive. Scaling happens exponentially. It strategically leverages available resources to maximize output. At the end of the day, this should be the goal for every business.
4 Tips for Scaling a Business
Scaling a business isn’t easy. It takes a lot of strategic planning and disciplined execution. The following tips will prove helpful:=
1. Set Goals
It’s always helpful to start with very specific goals in mind. Don’t just say you want to scale up. Attach numbers and timelines. Based on these goals, you can work backward to figure out where you need to be in 30 days, 60 days, 90 days, one year, etc.
The key to setting good goals – aside from being very specific – is to make your entire team aware of the goals. Print them out, post them on your Slack channel, send out progress updates, etc. Develop a culture that’s obsessed with reaching your goals.
2. Hire Scalable People
Growth-oriented companies hire lots of people to artificially accelerate growth. (The only problem is that payroll expenses eat up most of the revenue gains.) Businesses that want to scale hire people who are scalable.
A scalable person is someone who is willing and able to learn and adapt over time. They might not be the best in the world at what they do (right now), but they have a capacity and desire to constantly improve over time. This can be leveraged to maximize value within your business without dramatically elevating payroll costs. (There will come a time where you’ll have to decide how much you’re willing to pay them to keep them on board, but you can cross that bridge when you get there.)
3. Launch a Digital Marketing Strategy
You can’t rely purely on advertising and other sources of paid lead generation forever. What you really need is a digital marketing strategy that helps you get organic exposure and “free” traffic.
This is one of those areas where it pays to outsource. Try finding a digital marketing company that operates in your specific market. For example, if you’re in Long Island, look for a Long Island digital marketing service. You want a partner who understands your market and niche.
4. Create Standard Operating Procedures
Companies that scale understand the importance of process efficiency. And one of the ways they live this out is by creating standard operating procedures (SOPs) for any task that will be performed more than once.
An SOP – which is preferably a written document – contains step-by-step instructions for how to carry out a task from start to finish. This allows the task to be easily delegated to anyone with basic experience.
Adding it All Up
It’s important that you adjust your focus from growing your business to scaling your business. It might seem like a small shift, but it can have profound effects on the future of your business. Implement a few of the tips outlined above and see what happens over the next six to nine months.