Rutherford Cross’ Laura Montgomery looks at what it takes to scale your business successfully in the first in our Business Scalability blog series.
There is often confusion around the concept of scaling a business, and indeed whether or not it is possible for a business to be scalable. So let’s be clear from the start, scaling your business is not the same as simply growing your business. Scaling your business requires a business to have operational leverage, i.e. to be able to keep operating costs stable, whilst exponentially growing revenue.
Some types of business are intrinsically more scalable than others, for example technology businesses where a significant amount of investment in a product is required upfront, are more scalable than a consultancy firm where increased revenue requires increased headcount.
It is also important that your business is well managed before you look at options to scale. Scaling your business won’t solve any problems you are dealing with, it will amplify them. Make sure your business is in good health before you look at options to scale.
Once you have identified whether your business is scalable, how do you go about ensuring that process is successful?
- Be prepared to take risks
- Be prepared to invest in your business, and look for others to do the same
- Develop a scalability strategy that includes reducing operational costs
- Ensure employees are on board with your strategy
- Surround yourself with a core team to advise at every stage of the process
- Incentivise employees to deliver and reward them for hard work
- Build your network and use it to your advantage
As ever, people are key to the success of any scalability process. Without the buy-in of all employees, and a strong management team – particularly in finance, to deliver the changes required, success is by no means guaranteed. However, if you work to attract the right people and set clear objectives for the process, you are on your way to successful scalability.
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