When starting a business, there’s going to be one word that keeps popping into your head: growth. As a business owner, you want to be able to grow your company as quickly as possible, ensuring you’re reaching more customers, generating more revenue, and expanding your footprint in the market.
Growth feels exciting – it’s a sign that your idea is working, and that your hard work is paying off. But there is a catch. That is, not all growth is good growth. If your costs are rising just as fast – or faster – than your revenue, you might be growing, but you’re not building something that’s sustainable. This is where another crucial word comes into play: scalability.
Growth vs Scalability
For many business owners, growth and scalability mean the same thing. But that couldn’t be further from the truth. While both involve progress and expansion, the way they impact your business and your resources is fundamentally different. For instance, while growth means your business is increasing in size or revenue, scalability means you’re increasing your business’s capacity.
Let’s look at insurance as an example. Your business is expanding – you’ve opened two new locations and hired ten new employees, but the insurance you had in place now doesn’t cover those new locations or team members. You’re growing, for sure, but you’re not ensuring you’re growing a scalable model. On the other side of the coin, if you’ve opened two new locations and hired ten new employees, and then looked for cheap business insurance that can cover these new elements – and, even more importantly, adapt as you grow – that’s scalable growth that will build a foundation for long-term success.
How to Make a Business Fit For the Next Level
Adaptable, tailored Insurance is just one example of how to make a business fit for the next level, but there are many more. Reaching that next stage of growth doesn’t happen by accident, of course. It requires thoughtful planning, systems that can evolve, and a mindset that prioritises sustainability over speed.
One of the first ways to do it is to build systems that don’t break under pressure. One of the common reasons why so many new businesses fail so quickly is because they don’t have the systems in place to deal with substantial growth. Manual processes, for instance, might work in the beginning, but they won’t hold up when your client list doubles. For this reason, you need to be investing in tools and automation that reduce friction, freeing up your team’s time to focus on more high-value work. Think CRM platforms, workflow automation, and accounting software. Whatever helps things run smoother, you’re going to need it.
You should also focus on strengthening the core of your company before you expand outward. Before launching new products – or expanding into new markets – it’s your job to ensure your core offering is as solid as it can be. Is your customer service reliable? Are your logistics dependable? Scaling an unstable foundation will only multiply your problems, so you want to do so knowing that you have a strong, dependable core to fall back on.
Looking more specifically at customer service, for instance, you might have a really strong idea for your expanded business. The product could be genius, the route to market effective, but if your customer service is only so-so, that’s going to have a big impact. According to recent reports, the cost of poor customer service is $75 billion a year, with many customers not returning to businesses if they’ve had a bad experience. Quite simply, you can’t afford that to happen, so your customer service core needs to be as strong as possible before you put more pressure on it.
Lastly, if you want to grow scalably, you need to be able to monitor cash flow. There’s no two ways about it: growth eats cash. With this in mind, your priority is to watch where everything is going and keep a tight grip on all of your expenses, margins, and working capital. Financial readiness is what allows you to move fast without tripping up – so keep those laces tied and make sure your business always remains grounded!
