Scalability 101 – How to Run a Scalable Business

“I want to stay as a small business forever”, said no successful company ever. 

The primary goal of a business is to grow and increase profits, whether it’s a SaaS business or a more physical one.

But this goal isn’t really one to achieve with ease.

The path to growing as a business and increasing company size has many obstacles and each step must be calculated very carefully. This is important because you don’t want your business to just get bigger, what you really want is for it to scale.

Scaling and scalability are terms that people like to use in an important meeting, and you are probably familiar with if you do anything related to business and management. Moreover, scalability becomes more and more important each passing day with further advancements in technology. That’s only natural since scalability has ties to technology in its core. Technology is what makes efficient scalability possible. 

So, scalability is about technology and enhancing business, but what is it exactly?

What is Scalability? 

In the context of business, scalability describes the ability of a business to cope with challenges efficiently and maintain or increase profits as it grows, in the simplest terms. So, in a way, it refers to the meaningful growth of a company, in which profits go up as the expenses go down. If the opposite is what you are dealing with right now, you might want to keep reading.

what is scalability

How does a Business Scale (or Collapse)?

What most businesses do not notice in the pursuit of business growth is that they may not be able to keep up with it.

This is especially true for smaller businesses that receive their first wave of demand. In such cases, what is normally done easily may require more workforce, more material, and overall, more money. In the end, if the business can’t meet the requirements of demand, there is the danger of not being able to serve the customer properly.

But the danger of not being able to scale accordingly can be disastrous as well. In the face of increased demand, you might want to hire more staff to meet the deadlines or end up paying more than necessary just to serve the customer. In such cases, most of the time, the expenses end up being more than the profit and this is a big problem in business. This occurrence is related to diseconomies of scale, a microeconomy term. And it reeks of business collapse.

Scalability is in fact closely related to economics, however, the idea behind it is not complex at all. 

More growth, more profit, fewer expenses. 

This is the key to efficient scaling. However, one point is important. Every business scale in one way or another. What matters is to scale efficiently. Only then, it is possible to reach growth in the long run. 

A business that scales efficiently is one that uses the right sales techniques and management strategies, accompanied by the right tools and technology. It is complex, but it pays off.

Automating User Onboardingthe key to becoming scalable today

How well can you scale if you have to onboard each user by hand with a limited team?

scalability automation

Lack of automation is the biggest barrier to becoming a scalable business.

A well-structured series of automations that bind core processes together is a must for any business wanting to go big.

Undoubtedly, the key part of a user journey that needs to be automated is user onboarding, because an automated user onboarding opens up the opportunity for unlimited customer acquisition. It means that as new customers pour in, they won’t be held back by staff shortages or lack of support; each user will be onboarded smoothly with a well-designed user onboarding UX as if they were onboarded by a master salesperson/customer success member.

Becoming self-serve with automated product tours and user onboarding checklists, which you can create today with no-code apps, is your best bet in automating user onboarding.

Read: How to Become a Self-Serve Business Today

8 Crucial Tips to Scale Efficiently

It would be stating the obvious to say that every company has its own approach to sales and management, according to their business size, customer count, and many other factors.

However, when we talk about scaling, there are certain do’s and don’ts that would apply to all types of businesses; whether it’s big or small, SaaS-based or delivered goods based, in the technology industry or the beauty industry. There are certain similarities in all business’ scaling, and those similarities make up the following tips.

1- Choose your path

As a startup or a small business, or even as a big company, what you want is simple: growth.

We now know that growth is dangerous if you can’t scale efficiently, so the best way to adapt to growth is choosing the right path from the very start. This means that you decide how, when, and where you want to see the company in the future. At this very first base, you must choose wisely, and decide your strategies accordingly because you may end up growing too much all of a sudden and this means efficient scaling is harder.

Instead, what you need to do is lay a foundation that will steadily lead the company to grow while also making sure scaling is possible.

Recruiting the right personnel, purchasing the least costly and most efficient technologies and services, and also creating a customer base are the most important things to keep in mind at this stage. 

There are a lot of middle-market businesses out there that want to go back to being a small business once again, just to play their cards right this time. So, don’t give in to the hardships of small businesses but make use of the opportunities.

2- Set realistic goals

Any department of any company has certain goals, but the goals in our case are the ones that will make you scale efficiently. 

We cannot talk about scaling when there is no growth in question. So, the first thing you want to do is to make sure you actually grow as a company. By setting certain goals for each team and department in the company, you make growth possible. However, it is important that these goals actually prepare the company for answering demands as well. So, it is important that the goals are realistic to get everyone working towards a steady and easy to handle growth. 

3- Adopt strategies and technologies

Without a solid sales or marketing strategy, growth is a mere dream.

However, it is important to adopt the right strategies as well.

To scale efficiently, the decided strategies must be fitting to the size and the industry of your business. This is also true for the technologies you use to optimize workflow. For example, if you purchase a very complicated CRM tool as a small company, you not only waste your time trying to teach the employees what they don’t need to know but also increase expenses. Business tools are really similar to scalability, the benefit-profit must always be higher than the expenses. 

This similarity is only natural because technology is essential for efficient scalability. With a proper set of tools, you get to recruit fewer employees, waste less time, and pay less in general. Let’s look at it this way, as your company grows, you get more demand and thus you need to work harder. At times like this, communication is the key. Using certain tools like team collaboration software or CRM tools, you can be in great harmony with the whole company. Such tools are especially important for customer retention as well, which can potentially be one of the key pain points during the growth phase. So, make sure you optimize your tech and use the right strategies.

4- Monitor growth

All businesses monitor growth but monitoring it in terms of scalability is the goal here.

And of course, monitoring only won’t do any good and you have to make meaningful decisions in accordance with the data you get from the growth reports. By evaluating the data, what you see is whether the business is scalable, which is the most important factor for you to decide your next step. However, this decision may be a tough one. Because at certain times, the market may be unstable, and the data may be unclear. When this happens, business decisions could turn into a gamble.

Still, one thing is for sure, scaling is a hard time’s activity. Growth can be a painful process and only through growth can scalability be achieved. So, the decisions you make at uncertain times must still be good enough to guarantee that the business can scale effectively. Choose wisely.

5- Be ready

Most of the time, businesses know when to expect growth.

Just as Zoom became the boss of quarantine, some products seem to be just right for certain times and occasions. However, if your business’ product is more of an all-timer and doesn’t really have a special wave of demand (since not all products are Halloween candy), growth analysis can get a bit tough in your situation. Obviously, it’s not completely unforeseeable but you must be ready at all times. And that goes for all businesses. 

The principal problem with ineffective scaling is not being ready when growth comes. If your business doesn’t have the means to answer demands or the flexibility to still profit as production increases, then efficient scaling is not really possible. This is why there are certain things you must consider before it’s too late.

6- Defined work for everyone

Ambiguous titles and job definitions make everything harder on the part of the employee and the employer likewise.

What every company needs to do, is to define specialized jobs. This might be hard as a smaller business, but a generalist approach to job definitions in relatively bigger businesses can cause pure chaos. So, it is important that companies have “specialists” for the necessary posts. It is better to pay the employees slightly more than to have all the money flow into the expenses of ineffective scaling. 

7- Get digital wherever you can

As one of the tips above suggests, technology is the lifeblood of scalability.

Thus, it is important not only to get certain tech into the company but also to use it wherever you can. If a business software is one that can be used by all departments, you can’t just buy a 1 user membership. Almost all the time, the small fee you pay for online or offline tools can save you way more. But the “get digital” strategy is not just about business tools. It means that you actually do turn physical things into digital. What you need to do is create a mental picture of things that cost you the most money and find solutions to turn them into less costly things, keeping in mind to “get digital”.

For example, marketing used to be really costly. You’d have to hire staff or get an ad on a magazine or website. Today, companies don’t even bother to outsource, and they handle marketing inside, with a marketing team that administrates social media and websites. We see the importance of getting digital as well as specialist jobs here. 

8- Focus on strengths and weaknesses 

It is important that a business shows effort to better its core strengths, however, turning a blind eye on the weaknesses is one big misstep.

The best thing to do here is to focus on the strengths and the weaknesses of your company likewise. And again, this is all about being ready for growth and scaling. Working on your strengths makes growth more achievable while working on the weaknesses gets you ready for the challenges of growth and working on both means you will scale efficiently.

how to become scalable

Scalable Business Models

You might not be a big company or maybe you aren’t even a company yet.

We got you covered.

If you have a genius idea for a startup but you don’t know how exactly you can apply scaling to your business plan, here are some business models that scale more efficiently than most. 

1- Software and tools

It is pretty obvious that technology is profitable.

This is so because the product is actually produced once at the beginning and then sold countless times for a long period.

Sure, it needs maintenance and updates, but the initial production is the phase your profits can get lower than your expenses. If the software is good, most of the time the expenses don’t even get really close to the profit. Another advantage of digital production is that you don’t have to store and transport your product. It can fit in the tiniest device and can be sold via the internet. Thanks to these advantages, SaaS businesses and other software companies have relatively fewer problems with scalability.

2- Idea and knowledge-based products

“But all businesses are idea-based, what do you mean?” could’ve crossed your mind for a second.

But what we mean by idea or knowledge-based products is that the business’ funds are the ideas or knowledge.

So, let’s take blog writing for example. Sure, if you coded your own website it might require maintenance and but apart from that, there are almost no expenses to it. The fund is your ideas and knowledge and you make profit out of them. Giving courses is similar to this. Especially when it’s online, you might use a third-party tool to hold classes and all you have to spend is your time. the funds are the knowledge you have, and everyone wants a piece of it.

 3- Premium membership

This one applies to all the startups, small businesses, and the biggest ones.

People want premium memberships. And companies know it.

A premium membership that works on the principle of service for a period of time has been an important business strategy for some time now. Almost all of us are subscribed to one thing or another. Whether it’s for music, watching series, or food delivery, such memberships are now things that we have to have in our lives. we simply want to be treated like kings and queens, right? As human beings get lazier and lazier, the demand for these memberships can only go up. That is exactly why such a business model is highly scalable. Not only the demand goes up, but also thanks to the fact that these services are mostly on digital platforms, scalability increases as well. Spotify must be making a lot of money, huh?

Conclusion 

Scalability is not too hard to achieve when you know your way around it.

And in almost all cases, that way leads to technology.

Today, with good technology and the specialists who know how to use it, scalability is easier than it has ever been. Just make sure your company is ready when growth comes.

Mert Aktas

Mert is the Marketing Manager of UserGuiding, a code-free product walkthrough software that 2000+ companies trust in their user onboarding.

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