Last editedNov 20222 min read
Successful businesses must usually decide between growth vs scaling, as each involves a different focus and different goals. The goals are related and can overlap, but the initial focus is where the terms truly differ.
What you focus on to scale your business differs significantly from what you focus on to grow your business. Ultimately, scaling a business encompasses much more than just growing a business. Scaling facilitates further growth, but is not usually possible without some initial growth in the first place.
This guide explains the difference between growth vs scaling, and how you can scale your business to achieve even more success.
Growth vs scaling
In simple terms, you scale your business in order to provide it with more capacity to grow. Growth can happen without scaling though, so let’s dip into the intricacies of each term so you can better understand the right focus for your business.
What is business growth?
Business growth represents the increasing value of a company over time. The value can be measured in different ways according to what represents success for a business. Some of the most common metrics include:
net or gross profit margin
average order value
new customers acquired
average sales cycle length
Companies in highly competitive markets or those seeking to expand quickly usually focus on growth over scaling. Such growth-focused businesses typically invest more time and money in marketing and sales in order to boost immediate sales and acquire new customers.
Scale your business: definition
Business scaling involves the process of increasing a company’s capacity for growth. To scale your business requires a longer-term strategy than a mere focus on immediate growth. There are a number of ways to scale your business, including:
expanding into new markets
launching new products
broadening marketing efforts
investing in technology such as automation
A scaling focus typically involves reinvesting company profits back into the business in the form of new product development and expansion into new markets. It could also include maximising operational efficiency to reduce costs and improve profit margins.
How to scale your business
Trying to scale without having the capacity for it is one of the common business scaling mistakes, so it is crucial to understand how to scale your business before implementing any changes. Here we describe the three main steps towards scaling a business, so you are prepared for success.
Identify scalable areas
The first step is always identifying what parts of your business can be scaled. A product range could be expanded, or additional services provided. It could be more internal, with operational processes streamlined or marketing efforts broadened. Once you know what to scale and how currently able you are to scale it, then you are ready for the next step.
Invest in scalable areas
Investing in the areas that can be scaled to support your capacity is vital at this stage. There is no point designing a new product if you do not have the capacity to manufacture and market it. Offering an additional service without trained staff to provide it is also pointless, as is expanding marketing efforts without the proper resources.
Create a support framework
Scaling also involves creating new or updated processes and systems to support the new business framework. This could be in the form of a new inventory management or accounting system, as well as a reliable payments system offering more payment methods and secure payment processing.
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We can help
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