How many times have you heard business coaches and influencers say you should be focusing on scaling? It’s one of the most common goals I hear as a CFO. However, it seems this term “scaling” can mean a variety of things, most often associated with the fast growth of a company. But is that really the meaning? Let’s explore this…
Scaling, in business terms, means to increase capacity without proportionately increasing costs. So if you want to scale your business, you’re looking to grow without adding a lot of extra expenses. This can be done in a number of ways, but typically includes automating processes, delegating or outsourcing certain tasks, and improving efficiency in your systems and operations.
Scaling is often confused with growing, but they are not the same thing.
Growth refers to an increase in revenue or size of the company. This could be through expanding your customer base or selling more products/services to your existing customers. Unlike scaling, growing your business often requires additional investments such as hiring more staff, buying more equipment and building more offers.
Growing your business is really about focusing on building the proof of concept and ensuring it is successful. It may involve trying new things, expanding your scope and adding more. Most entrepreneurs claim to be scaling their business, but they are often adding on more offers, most custom options and are inflating their overhead in the process. They claim to be scaling but are investing more of their own money and time into the business. Growing is good, but eventually you will hit capacity without being able to scale.
If you are finding success in business and want to bring in cash flow without spending more time, you want to be focused on scaling. If you are trying to scale, your goal should be to remove yourself as much as possible from the core processes through delegation, documentation and automation. You want to create a proven process you can replicate, standardize, and teach to others. If this is your goal, then you actually want to be simplifying your offers and reducing what you sell. Sounds like the opposite of what you want to do, right?
Not only does simplifying your offer make it easier to scale, but your customer will have much more clarity over what you sell. As a customer, isn't it much easier to choose from a menu of five dishes at dinner than be faced with a Cheesecake Factory menu the size of Pride and Prejudice? And as a restauranteur, it is also easier to buy materials to cook only five different dishes and predict the volume of sales for each to be able to order accurate inventory and train chefs.
Even if you are not currently scaling, it is a good idea to curate your offers with scalability in mind. How much of your offer could be standardized into an offer package versus custom or a la carte? How could you build out a standard enrollment or onboarding or offboarding process for your customers? These things will help take the pressure off of you as the owner and keep you focused on the business instead of in the business.
The goal here is to define success for your business. Would you prefer to be a solopreneur technician or do you want to create roles and processes to grow? Both are totally fine. There is nothing wrong with not trying to scale. You can have a successful boutique hotel without trying to replicate the business model of a Ritz Carlton.
Are you looking for ways to grow and scale your business without adding a lot of extra overhead? Schedule a consult with us and explore our CFO packages, where we deep dive into your pricing and offers to optimize your revenue.