Question: How Do I Know If I Can Scale My Business?
Ikechi Onyeka, Aba
Answer: As used here, to scale a business means growing it to a bigger size, in terms of the key indicators of performance.
While some businesses may lack the opportunity for scale, but remain lucrative with a small and regular stream of revenue, others may possess the capacity to grow revenue exponentially. In the latter case, with sufficient demand for your product or service, you may make a strategic decision to scale the business.
If you want your small business to become a big player in your industry, you will have to scale it. To do this, you must determine how big you want to become. You must also assess whether your business can realistically grow to the size you desire.
How do you decide whether to proceed with your decision to scale your business?
From your analysis of the industry in which your business operates, here are some of the issues you must consider in answering the question whether you can scale your business:
- Determine the presence or absence of big players in your industry. The presence of big players suggests that there is a good chance your business can scale and also become a big player like them.
- Identify the things that set apart the big players that are thriving in your industry. You should determine the things that the successful businesses are doing well. It is a good sign if your business is in a position, or can be re-tooled, to act similarly, even if on a smaller scale. It means your business is ready to scale or can be positioned to scale.
- The knowledge from these inquiries will reveal the gap between the present state of your business and its future state after the scale. It will also point out the practical challenges you must overcome in order to scale the business from where it is to where you want it to be. For examples, getting ready to scale your business may require re-thinking your business model, raising money for expansion or giving up your control of the business.
- With positive signals from the foregoing considerations, you are in a position to set a new sight to move your business to a higher height.
- Finally, outline your plan of how to grow the business to the size you want, and work the plan.