Scaling Versus Growing Your Business

 In today’s technology-driven business world, few ideas are more imperative than growth.

Most entrepreneurs dream of taking their business to the next level through eventually scaling. It is possible that your business has carved a niche for its product and services in the market; maybe you have even established your company in a myriad of locations and are serving globally. However, the truth is that less than 1% can actually make it. So, what is your business's ultimate goal – growing or scaling?

Some businesses prefer to grow whilst others like to scale. Let's delve deeper to learn the difference between scaling and growing and which is the best fit for your business!

What Is Scaling?

Simply put, scaling means increasing revenue rapidly by investing the least resources. When you scale a business, the ratio of increasing the revenue will be exponential and other significant resources such as time, money, and workforce for scaling will be kept low.

For instance, you have a company with $20,000 monthly revenue. Within the next two months, you have 2x the revenue without incurring any additional costs such as expanding the team or significant resources. This is termed scaling i.e. revenue is boosted within a short span and without shelling out much money.

For instance,

Good Example of Scaling

One outstanding example of scaling is the tech giant Google. Google significantly increased their revenue by offering the opportunity to pay for advertising through their search engine.

What Is Growth?

Growth simply refers to an increase in revenue; however, it may also include increasing the number of employees, clients, or offices in additional locations, etc.

For instance, consider running a small advertising agency that recently acquired three new clients. In order to accommodate the increase in clientele, you would need to hire more people to handle the workload. This also means an increase in resources.

Therefore, you are required to spend sizable resources to attain growth.

The Difference Between Growth and Scale

As discussed, growth and scale are parameters for companies’ improvement but the method and the goal of obtaining the goal are different. Here are the top five differences between scale and growth:

Focus of the Company

Growing companies pay heed to survival as the gross profit for growth is not high. While scaling companies primarily focus on offering quality solutions, consistency, and services, in contrast to just zeroing on survival. Hence scaling companies’ basis is increasing the revenue without adding new resources.

Founder’s Role

Growing companies' founders pay heed to myriads of tasks such as implementing growth strategies, different department involvement, setting offices in different locations, and employee benefits strategies. Scaling up founders will focus on completely different aspects including mentoring the employees, strategizing the growth, assigning the essential decision-making to leaders of the department, and much more.

Employee Hiring Priority

Growing companies will employ people to tackle their problems. For instance, if an organization doesn't have a good marketing team they will invest to hire marketing experts and leaders to overcome their weaknesses. Scaling companies will hire individuals to strengthen their present team. For instance, any startup that focuses on AI (artificial intelligence) will pay heed to hire AI experts with years of hands-on experience in the domain.

How to Scale Up

Some companies are not meant for scaling; therefore, it is imperative to know if your business is scalable or not. Let’s dig deeper to find out!

• Business Current Stage

Before scaling up, take a closer look at your business's weak areas, and try to strengthen them. For instance: if you acquire two to three new clients, will your current staff be able to handle the additional tasks? If not, then you may need to hire more staff.

• Planning

Once the evaluation is completed, it's time to plan for scaling such as monthly targets, yearly budget, how many resources for new projects, and calculating profits.

• Procuring Money

For every new resource, you need to have the required funding to pay for it. So an investor is required for a business to sail smoothly.

• Technology Is Must

When a business scales, the work also amplifies. There are a plethora of automation services that offer great value for money. For instance, if you plan to advertise your business on social media, using automation tools will make planning and publishing content a seamless process.

How to Grow?

Once you have an ideal market-ready product or service, the next step is to grow.

• New Customers

To acquire new customers you can use myriads of options like discount coupons, promo codes, or cash coupons.

• Digital Footprint

Don’t underestimate the power of social media. A crucial prerequisite of becoming a new age is having a strong digital presence. Use advanced tools for marketing along with employing automation tools such as CRM, QuickBooks, Business Budgeting, etc. Gain a competitive edge by staying ahead with these new technologies.

• Acquisition

Another effective method to grow is acquisition! For example, Facebook acquired the leading social media app Instagram and messaging app WhatsApp. Facebook integrated both of them into their platform, helping them obtain a huge customer base. Therefore, you can buy a competitor to grow your customer base rapidly.

• Branch Out Team

According to project requirements, expand your team. It is vital to include a talented workforce in a leadership position that can do wonders. In other words, one good team lead can pull out the best from every team member.

Conclusion

To take your company to the next level and ensure expansion, It is imperative to understand scaling and growth, if you are looking at budget, timings, and most importantly cash flow for your business.

If you are in need of assistance, look no further. Black Swan Consulting, Inc. is one of the leading companies providing quality services such as consulting, technical assistance, training, and speaking, with a mission to help entrepreneurs build long-term strategies for unprecedented success. To learn more, simply visit our website!