Why Do You Need a Scalable Business Model?
Nobody starts a business to see it crashing after a couple of years. Nor does any excited entrepreneur dream that their business will stay small forever or that they will have to throw in the towel when a recession hits. Of course not. Every business owner wants their business to generate sustainable revenue, one that funds the lifestyle that they want and creates a comfortable future for them.
However, when opportunity knocks you will not be able to take advantage of it if your business is not able to scale up quickly or steadily enough. Scalability equates to an inherent flexibility within your business to adapt to new scenarios with confidence and poise. Ironically, the flexibility required to grow is the same quality that builds the resilience your business needs to draw from when the bad times hit.
So how do you do this? And how do you know if your business is scalable?
What is a scalable business?
Firstly, to know whether your business is scalable, we should establish what that means. What we mean by scalable, is one that can continue to perform well, even when its structure is put on under increased pressure due to circumstances such as an increasing workload or demand. A business that can grow into new markets and territories without buckling under the strain.
How to check you have a scalable business model
The recession brought about by COVID-19 has put many businesses under pressure. Despite that, now is the time to check if your business is scalable, or what you can do to improve in this area.
Here are a few questions to ask:
1. Is your bottom line growing faster than your top line?
2. If you went on holiday for a month, would your business still grow?
3. Can your current systems/processes/ways of working support your business being twice or 3 times as big?
4. Can your current ways of working produce predictable new client wins?
5. Can your business win work without you being involved?
6. Is there enough of a marketplace for your firm’s services to scale to the level you want?
If you answered yes to all these questions, you have a scalable model in place. If you answered no to some or all these questions, then you have a bottleneck that is limiting the growth of your business and you need to address those areas.
Why do I need a scalable business?
The difference to surviving the recession and thriving in it is whether you have a scalable business model. There are plenty of fast-growing, cash-burning companies that are going to be vulnerable during this time, but if you have a flexible model in place, then you can not only adapt to the turning tide, but you can also quickly take advantage of opportunities to grow comfortably when the economy is on the upturn again.
Here are a few tips on creating a business that can sustain the level of profitability as sales volume grows:
- Refine the company’s growth trajectory
- Communicate and cultivate a growth culture
- Streamline processes to boost efficiency
- Set and monitor goals
- Hire strategically and invest in technology and training
- Define jobs clearly
- Build trusted partnerships with businesses that share an interest or audience
- Don’t forget marketing and raising your business’ profile
- Outsource when it makes sense, there’s no need to rebuild the wheel
If you’d like to discuss your business’ scalability potential or how to improve it, just get in touch. We can assist and guide you through the steps you need to take.