A scalable business is essential for those who want to grow and increase revenue, but many companies have doubts about implementing this concept. After all, what do we need to do to leverage the venture without it representing an increase in expenses?
Scalability creates the conditions to expand productivity, sales, and revenues while keeping costs in check. Regardless of the demand, the enterprise manages to adapt, and expenses do not rise proportionally to the organization’s growth.
You will understand scalability and the six best practices to put this concept in your business next. Read on!
Table of Contents
What Is Scalability?
The Personal MBA, Josh Kaufman’s bestseller, provides a clear definition of the concept of scalability:
Scalability is the ability to duplicate or multiply a process as volume increases. Scalability determines your maximum potential volume. The easier it is to copy or reproduce the value provided, the more scalable (or expandable) the business.
A teacher who gives face-to-face classes has an activity that could be more scalable. There are limited hours in the day and energy available to provide the service, and he can only assume one class at a time.
A distance education teacher relies on scalability. It is possible to multiply the content for as many students as are interested with little or no additional cost, facilitating the growth of the business.
What Are The Benefits Of A Scalable Business?
Scalability provides excellent value ratios. It is possible to maximize productivity, revenue, and sales and minimize the processes’ costs, time, and energy. See below the main advantages of implementing this concept.
Reduce Costs
Every scalable activity is characterized by restricting costs, even in the face of increased demand. This only sometimes implies zero additional cost, but there will always be a disproportionate relationship in which the expense is significantly lower than the gain in productivity or revenue.
A simple example is data stored in the cloud. It may be necessary to purchase a more robust plan if the demand for the service increases. However, the cost difference differs from the expense of acquiring servers, paying for licenses, and other measures necessary to store in the organization itself.
Improve Productivity And Profitability
Scalability makes the business more productive and profitable. Imagine a graph in which one line represents the inputs and the other the process outputs. In the scalable business, increased demand leads to a scenario where the line of inputs stops rising at a certain point while workers continue to grow indefinitely.
A Robotic Process Automation (RPA) solution often works with a fixed fee per hour of work, for example. Thus, if 1,000 tasks are worth the cost and the solution delivers 2,000 in the period, the surplus would be free of additional expense. Hence, a scalable business is more beneficial than operations in which every increase in demand causes extra costs.
Preserve The Quality Of Products, Services, And Processes
The scalable business has the reliability of the multiplication of deliveries as a premise. In this model, the increase in production can be accompanied by the depreciation of the quality of the product, service, or process. Therefore, it is possible to grow with the interested parties satisfied with the deliveries.
Be Agile And Flexible
Agility and flexibility are also characteristics of the scalable model. Activities tend to be elastic, contracting, or expanding as the volume of demand changes. Therefore, the company responds to different moments and business situations, which is fundamental given the uncertainty that characterizes today’s world.
How To Implement Scalability In The Business?
Scalability can be implemented by updating existing systems, infrastructure, processes, and practices or by expanding these elements. Check out six tips now to get the concept off the paper!
Developing the work system with an automation starting point is to deal with the bottleneck of repetitive tasks. Activities with this profile have a scalable demand, such as:
- Register orders
- Issue invoices
- Identify payments
- Search for keywords in your resume
However, the work system adopted could be more scalable, for example, the manual.
Hire Technology As A Service
Software as a Service (SaaS) is a relevant concept to make your business scalable. With this characteristic cloud computing model, the technology becomes a digital service, usually by subscription to plans or monthly fees.
Thus, data processing and storage is the supplier’s responsibility, while the company uses the solution with a simpler IT infrastructure, with mobile applications or platforms.
Follow The Market
Benchmarking is also a way to find good practices and models to make the business scalable. Evaluate what organizations, inside or outside your industry, are doing to deal with challenges similar to yours.
Then, compare the successful models with internal practices, identifying the gap between your activities and best practices.
Finally, define goals to gradually approach market references, creating action plans to promote internal changes.
Adopt Emergency Action Plans
The company can also adopt emergency action plans, having defined protocols to deal with situations of increased demand. Hiring temporary professionals, having a well-structured hour bank, and having technology partners that expand services are examples of what can be included in these projects.
Develop An Expansion Strategy
The company’s growth must be planned so that, as demand increases, there is a response to deal with the situation. The long-term vision should think about how the business model will change to remain valid in the face of growth, for example:
- Entry of partners
- Franchise model
- Search for investors
- Marketplace implementation
- Service transformation into a digital product
A strategy that considers growth with scalability will be essential to guide decisions and assess whether the company is on the right track.
Measure The Results
Create a routine to evaluate results, adapting plans and measures according to challenges, opportunities, mistakes, and successes. As scenarios are uncertain and change quickly, programs can only retain validity if updated to keep up with changes.
With these practices, you have a set of measures to make the business scalable, transforming management and using technology. Soon, you can implement changes and reap the benefits, improving the expansion capacity of the enterprise.
