Scaling your business is not a harmless experiment.

It is a dangerous proposition fraught with pitfalls.

A solid two-thirds of companies that grew too fast consequently failed. (Ultimately, those that grew more modestly survived.) 

Your head might be in the clouds, thinking of fantastic revenues, only to be smacked by reality down the road.

So in this post, we look at ways a business can safely and sustainably scale.

To do that, let’s first make a quick differentiation between “growing” and “scaling.” 

“Growing” Vs. “Scaling”

Although these two terms are often used interchangeably, there are important differences between them.

“Growth” is considered an arithmetic progression. A growing business will land more clients/customers and get more sales. As a result, its revenues will also grow.

But in the process of doing so, it also had to hire more people, get more agents and incur more costs. It might very well be the case that a high-growth company, as seen from the outside, will *only have only very modest profits.  

Scaling a business is a little bit different. It is an exponential approach to things—not just a gradual addition, but a multiplication of forces. (And because of this very nature, its effects, both good and bad, can pack a wallop.)

Another important difference between “growing” and “scaling” is that the former incurs a comparative cost, while the latter incurs a very little cost, if at all. Sometimes, by following specific strategies and due to economies of scale, a company might even lower its expenses.  

So for example, “growing” a business would mean hiring more agents. The company will have to pay not only the salary of each of these agents (additional costs) but also their perks and health benefits etc.  

A business that scales, on the other hand, can institute a referral program or an online affiliate program that multiplies its sales and revenues, with only marginal costs to the organization.

That said, let’s look at some of the ways a business can safely scale.         

How To Safely Scale A Business

#1 The move should be demand-driven.

Hope (or dreams) should never be the driver and rationale for scaling. Unfortunately, most scaling decisions come from this place. 

This often leads to mistakes such as premature scaling and over-scaling—where, oftentimes, businesses had to burn precious capital or take on too much debt.    

Scaling safely means moving the business based on evidence and data. That is, with feet on the ground, not with head in the clouds. So the reason for scaling can only be honest-to-goodness sustainable, high demand. 

A restaurant owner might think, “I still have space outside my restaurant. If I put more tables and chairs there, I will increase my capacity. This means more customers and more money. Let me take out a loan to buy tables and chairs.”

(He will be in for a rude awakening. Demand is not that strong and there might even be empty tables inside his restaurant. He’s simply mesmerized by the idea of increased capacity.)

An imagined situation is not a solid reason for scaling a business. It could very well be just in your head. And that’s dangerous!  

Any time I hear a pitch like “The X business is worth $100 million annually. If we can get 1%…just a measly 1% of that…that would be a million dollars,” I do not invest.     

The situation would be different if the restaurant is overflowing with people, and the line is snaking around the block. That is clear proof of demand.

But even then, you need to make sure that the demand is sustainable. Or else you will be chasing the demand, and just when you have all your tables and chairs ready, the demand is gone.

(If you scale too much, you will then be forced to “right size,” just like what the tech companies are doing right now.)  

#2 Optimize

Scaling must also look to additional expenses and manage them as closely as possible.

To scale safely, a company must ensure that revenues are rising faster…much faster than costs. There’s no point in going after extra revenues if they’ll only be offset or wiped out by the extra costs. (If your profit on 100 customers is $50,000 and your profit on 1,000 customers is still $50,000…why bother?)

One of the most effective ways of controlling costs is by optimising the parts and the whole

Here are some ways a business can optimise:

• niche down and focus on the most profitable part of the business
• eliminate weak or losing products
• evaluate and streamline processes
• reduce waste in its operations
• closely manage inventory
• cross train employees etc.

#3 Delegate

Scaling a business means introducing a myriad of changes in the company. Yes, you are hoping for more profits, but you are also increasing the complexity of the company. Things that you used to do, you most probably won’t be able to do anymore.

So if you used to be so hands-on and oversaw every aspect of operations, from product development to testing, marketing and customer service, you will not be able to do those very same things.

By scaling, you would have new activities to oversee, and novel situations to look into, so you need to delegate things off your plate.

Do not try scaling if you’re married to the idea of being a one-man show.

You just might be the biggest stumbling block and just slow everybody down. You could be the bottleneck that can ultimately cause failure. Because if you don’t delegate, and insist on doing most things your way, then things will be missed and you won’t be able to dot the i’s and cross the t’s. It will backfire on you big time.

It takes a village to safely scale.    

#4 Make use of available technologies

Scaling is almost synonymous with tech and no scaling can ever be done without leveraging available technologies and equipment.

Whatever your business, tech can:

• Accelerate speed
• Increase efficiency
• Boost accuracy
• Multiply reach
• Simplify decisions
• Foster innovation
• Simplify processes
• Improve communication
• Boost productivity
• Reduce costs
• Provide real-time insights
• Automate tasks
• Streamline operations and so much more

Each one of the items above is an important feature of scaling safely. So what are you even doing in business if you’re not leveraging available technologies?

I’m talking about the internet, apps, software tools, cloud computing, data analytics, AI, Internet of Things, VR, RFID, etc. –all of which require only minimal investment, compared to the innumerable advantages it brings your company.

Every day businesses are finding new and different ways of applying available technology to their operations, and these are the same businesses that get a leg up against their competitors.  

#5 Hire well

You might think, with all the software applications and tools coming out of the woodwork, that you can scale solo. That’s true up to a point.

But again, you will be the bottleneck that determines the speed of everything. But you only have two hands, one brain, and two eyes…that sleep.

Remember that your business will be competing against teams, who are probably working round the clock, with each member focused on some part of the business they’re good at. Meanwhile, there’s just you, spread too thin, and running to the store because you ran out of coffee.

Instead of going at it alone and burnout early, look to build your “Dream Team.” Get people with world-class skills so they can put their talent to bear on your vision. Hire great minds that you can collaborate with and ping ideas off each other.

Tech is for collaboration and communication—not isolation.

Earlier we talked about the importance of delegating. This is the next part of the puzzle if you want to scale safely, knowing who to delegate to.

You’re always going to be needing the help of other people, and as the team leader, you’re going to be delegating some part of the business to someone better and more efficient than you.

Kinetic Innovative Staffing understands how important a team is—especially in business. We help companies, big and small, bring together a group of people for a common goal.

Companies come to us when they’re looking to hire remote professionals. Say, a business is looking to hire social media managers, graphic designers, writers, sales associates, customer service etc. They’ll tap our services and we help them zero in on their ideal candidate.

Hiring remote workers ticks several boxes for scaling safely. Not the least of which is the significant cost reduction a company enjoys when working with remote workers. On average, our clients enjoy a 70% decrease in labour expenses for every month they are employing remote workers.

If you want to explore this opportunity as a means of scaling your business, do not hesitate to contact us.

Kinetic Innovative Staffing has been providing hundreds of companies in the Asia Pacific, North America, the Middle East, and Europe with professionals working remotely from the Philippines since 2013. Get in touch to know more.