Transforming your start-up to a large-scale corporation is a lengthy and demanding process. When mapping out this development an important question to contemplate is:
Are you aiming to grow your business or to scale your business?
These terms are often used interchangeably, but they are two distinctly different approaches you must consider and understand in order to effectively build your business.
Generally, growth refers to the end result of increasing revenue as a result of being in business. It can also refer to other aspects of the company that may simultaneously grow, like the number of employees, offices and how many clients it is liaising with, these are all almost always linked to the growth of revenue.
What’s problematic about this however is that it takes a large number of resources to maintain constant growth. For example, you may decide to open new offices overseas to capture a foreign market, but you will also have to hire more personnel and spend more in resources to accommodate this expansion in services. So, although you are making more money, your profit margins remain the same because of the additional cost that are being spent to support that growth.
By contrast, scale is achieved by increasing company revenue without incurring additional costs. This may seem like a close to impossible task at first, but in today’s age of technological advancements, it is much more easier to achieve than before.
A great example of a company that has successfully figured how to competently scale is Google. As of 2017, it had seven products with over a billion active users each, while only employing an approximate of 88,000 people. From this, it can be confirmed that scaling your business is an approach that requires a lot of patience and time (Google has been around for many years) but likewise it also guarantees success with longevity.
Note that the distinction between growth and scaling will become more critical to you when your company is not a start-up anymore, but is not a large corporation yet, either. It is typically at this middle stage you will have to decide whether you want to grow at a regular rate or adopt a faster scaling method.
If you choose to scale, how can you do so productively? Focus on making your processes more efficient by introducing systems and standard procedures. Think about how the delivery of your product or service can be automated so that you can deliver it faster and cheaper for every additional customer, without compromising on quality. A successful scaling plan will ensure an exponential increase in your company’s value for years to come.
