What is Scalability in Business?
The word sounds great, but what does scalability mean? According to Corporate Finance Institute, “Scalability can fall into both financial and business strategy contexts. In both cases, it stands for the ability of an entity to withstand pressure as a result of growth, without being hindered by its resources or structure.” In other words, it’s the process of optimizing your business so that it can grow in the most efficient manner possible.
4 Tips for Greater Scalability in Business
You’ll be hard-pressed to meet an entrepreneur or business owner who isn’t interested in making their business more scalable. The challenging part is executing on this desire. Here are a few tips you may find helpful for scalable businesses:
1. Develop an MVP
Each time your company wants to add a new product or service, there’s a tendency to overdo it. You want to get it right, so you pour a ton of resources into perfecting it. And while there’s nothing technically wrong with this, it’s not a scalable model. It bogs you down in the details and takes too much time. And once you realize that new products take months to release, you’ll become a little gun shy about the process. A better strategy is to stay lean and develop a minimum viable product (MVP) first. With this approach, you strip out anything that isn’t absolutely necessary and focus on a core feature or value point. Then, after getting some initial adoption and feedback, you can iterate and add new features. This is a much more scalable approach.
2. Invest in People
People are the lifeblood of a good business. It’s easy to find a new building, invest in a new piece of equipment, or sign up for a new software solution, but it’s challenging to hire good people. At the end of the day, investing in people who will show loyalty to your business is an absolute must. And, contrary to popular belief, this doesn’t always mean hiring full-time employees. Low overhead is the mark of a scalable business. And if you want access to the best talent without beefing up your expense sheet, outsourcing is the way to go. Take graphic design and web development as an example. While you could hire a full-time person, you’re (a) on the hook for their full salary regardless of output, and (b) always limited by the number of hours that employee can give you in a given day or week. A better approach is to partner with an outsourced design agency, like Superside, which offers 12-hour turnarounds, cheaper costs, and a host of other benefits that you can’t get when everything is handled in house. When you need designers, they’re there. When you don’t, you aren’t stuck paying for something you don’t need.
3. Build a Smart Tech Stack
Technology can be the driving force in business scalability, or it can be the thing that ties you up and holds you, hostage. The goal is to make it more of the former and less of the latter. And you do this by thinking more intentionally about how you architect your tech stack. A good tech stack consists of tools that integrate with one another, have rich APIs, and have affordable price structures that allow you to move up and down without long-term contracts or commitments. If your tools fit these criteria, the tech will become a blessing to your business.
4. Develop Processes
Stop thinking in terms of tasks and begin dreaming in terms of processes. Steps and tasks stand on their own merit, whereas processes are about bringing these steps together in a logical progression that maximizes efficiency and promotes more consistent and predictable outcomes. Whenever you achieve something positive in your business, work backward and identify the steps it took to get there. Then weave them together into a standard operating procedure (SOP) that can be replicated again and again.
What’s Your Long-Term Vision?
When it comes to your business, having a forward-facing posture is always important. You need a long-term vision for where you want to be in a year, three years, or even ten years. You won’t always achieve these goals, but it at least gives you something to strive for in the process of growth. So as you invest for scalability in business, make sure you’re looking at it through the correct lens. This vantage point will set you up well for years to come.
