Running a thriving, local business is great.
Having a business that scales? Even better.
Scaling your business is different from growing your business.
When one grows their business, their revenue increases at a steady rate with resources being added proportionally at the same rate. The profit margin stays the same but the overall revenue is higher.
Scaling your business means that you don’t necessarily need to add additional resources, but your revenue increases. Your profit margin increases as well as your revenue stream.
Take Pinterest for instance. Pinterest has generally been the same platform from inception to present. Before Pinterest completed their first year in business, they had 10,000 users on the platform and 0 revenue. Pinterest now offers advertising options to brands but they waited 4 years before making that an option. In the last 7 years, Pinterest has grown to over 150 million users and $300 million in revenue.
In order to scale your business, you need a business model that lends itself to scaling. Not all businesses will be able to scale the same way though. A product-based business will need an entirely different strategy than the service-based business.
For the product-based business, scaling is a much easier feat than your service-based business. (Not to deter the service-based business at all. We’ll get to your strategy in a minute) Being able to scale means that your product can be replicated costeffectively and quickly. Scaling a product-based business is easy to do if you have a system in place to replicate or manufacture the product. Where you achieve scale, and not just growth, is in the sales process. This product is listed on your website or in your store without needing a sales team to secure this purchase. Think of any online clothing store. No one is directly pitching you on an item of clothing. You simply purchase it.
Our service-based businesses may have it a little more difficult. Think about marketing firms for a second. Typicall they are working with clients on a 1:1 basis. How can they scale? They can only grow, right? Well not necessarily. Creating a system for pre-qualifying clients is an easy way to scale your business. Creating a pre-qualifying, high-converting sales funnel is an excellent way to take pressure off of a sales team and your bank account. Instead of spending time on the phone with people who may never work with your business, spend your time letting the leads come in to you hot. Let them schedule their appointment to meet you. While a sales funnel is labor intensive to set up, once it’s set up effectively and automated, you can watch the leads pour in without hiring more resources.
Consider a hybrid between the product-based model and the service-based. Let’s go back to our marketing firm. While a sales funnel is a great way to pre-qualify clients, it’s still not going to give you the same scaling results as your product-based counterpart. Consider mixing in passive products you can sell to potential clients at a lower price point. For instance, if most of your clients come to you with a problem that has a simple solution and it is something they could accomplish on their own with a little guidance, create a paid resource for them. Create a video course, a book, etc. a lower price point. This will do multiple things. One, it’ll save you time when working with clients because you solved a problem before you even met with them 1:1. It will also allow you to scale. If your product or service is a hefty investment, you are limiting the amount of people who can work with you. By offering a lower price point product, you are able to reach more people and solve more problems all while doing the work one time. This is something that can be worked into your sales funnel, so it sells itself.
Scaling your business is a great way to increase profits and retain clients. Your business will start working for you when you create a business plan that scales.