What does your business take from startup to big business? Of course, an attractive offer and a sufficient market are required. But that’s not enough and if you want to become unstoppable for real, the organization needs to be optimized for growth; the company needs to be scalable. At OnGrant, we want to help all entrepreneurs develop, which is why we have put together this guide to scalability, aimed at those who want to start a growth company, or develop your current business model.
What is scalability?
A system is scalable if it is designed to continue delivering as the workload increases. The scalability of a business model means that it can handle 10,000 customers as easily as it could previously handle 10 customers.
Robert Sutton and Huggy Rao, who wrote the book “Scaling Up Excellence: Getting to more Without Settling for Less”, believe that many entrepreneurs confuse scaling up and growing. Growing means increasing turnover and workforce, while scaling up incorporates more. This means that the business model and organizational structures are improved before and in step with growth. The authors use a human metaphor to explain what they mean. They compare growing the company with an arm getting bigger, a change we can easily see. Scaling up is more subtle and means not only that the arm gets bigger, but that the heart that pumps the blood gets stronger and that the arteries find their ways, so that we can continue to use the arm without losing functionality.
In other words, the entrepreneur who wants to create a scalable company should look inward from a holistic perspective and ensure that the organization has support functions such as pallets as the pressure increases. Harvard Business Review writes that companies that actively work from a scalability perspective succeed 65% better than companies that focus solely on growing. Not all companies will face the same challenges as they grow, but there are some aspects that all entrepreneurs can take into account when optimizing for success.
Streamline with technology
Technological development means opportunities to streamline by applying new solutions to old problems at lower costs. Digitalisation has revolutionised opportunities for entrepreneurs who want to create scalable business models, which has resulted in sharing and networking services such as Uber, Airbnb and Facebook growing exponentially in a short time. The key is that they exploit network effects that make them more efficient with more users. Companies do not need to invest in more assets, because they only communicate contacts and create opportunities for people to find each other.
Digitalisation and other new technologies obviously provide opportunities to create sustainable growth in companies based on more traditional business models. When you develop scalability in your business, the technology is your best friend, especially if you work proactively to implement scalable processes. Look around and identify what tasks you and your employees do on a daily basis.
Then imagine that your business is ten times larger and see if you have the capacity to handle the workload for each specific task. Then you know where the technology can be implemented. Do not be afraid to standardize processes through business systems, it frees up time for creativity and development.