What Does Scaling Your Business Operations Mean?
Imagine that you are a service-based business who has just signed a new client. You increased your revenue by signing that client but now you don’t have the resources available to fully serve them. So you hire a new employee to help your business manage the workload more effectively.
Yes, your business may be growing but it isn’t scaling. Although you grew your revenue when you signed on a new client you also increase your expenses at the same rate. The reality is, if every sale you make requires the same amount of time and effort as the previous sale then your business model is not scalable.
Your business scales when it can cope with an increased amount of work while maintaining or increasing its efficiency. When it comes to scaling your business, here are some great predictors of success:
Having diverse income streams
High customer retention rates
Creating a value ladder of products to offer for your customers
According to this article in Fortune, companies scale their business when their revenue increases while their operating costs remain low. If a company increases their revenue but increases their costs at the same rate, then that business is not scaling. But how can you focus on quickly scaling your business while still building a strong organization.