Your ability to SCALE is an indicator of growth potential

One of the cornerstones of a business that experiences healthy growth is its ability to scale or increase its volume without impacting the contribution margin (Contribution margin= revenue - variable costs). The ability to do more with less. If you haven’t created scalability in your business, you’ll always struggle with growth and especially with breaking through revenue ceilings. If this becomes an issue then it doesn’t matter how much marketing or sales support you may have. If you’re business isn’t set up to scale, you’ll max out on the number of customers you can serve and cap out on revenue.

Even before you launch your business, you’d have a difficult time getting an investor or bank to bank you if your revenue potential was limited.

Here are some key areas you may want to avoid as a start-up or small business:

1. Trading time for dollars.

You may have started out getting paid for your individual services but at some point you’ll want to be compensated for VALUE, not time. If you want to put a price on your time, it would then become a premium item. This could include moving into group facilitation and away form one-to-one experiences. Perhaps turn a process or instruction into an online automated activity, a book, or audio/video experience. The opportunities to transform a talent into a scalable product or service are bountiful. People will then be able to compensate you for value, not time.

2. Intellectual Property that serves a finite purpose.

The technical word here is obsolescence which is when something loses values because the world around it (tastes) have changed. Streetlamps and streetlamp lighters became obsolete when electricity was invented. The pet rock became obsolete after it’s first wave. Whatever your “it” is, make sure it has the ability to expand, grow and evolve as time goes on. Rather than a title for one book, Jack Canfield and Mark Victor Hansen created an anthology franchise of Chicken Soup books that are still breaking records. Over the years, how many variations of Windows have you had to purchase for your computer?

3. Lack of automation.

If your dream is to help as many people as possible, then you’ll want to serve your market without limitation and in a way that is most cost effective to the business. Virtually every area of your business can have some type of automation to increase efficiencies and output--- more people being served! Start with manufacturing then on to the delivery of your goods and services. Order processing, follow-up and marketing are key areas to look at as well. Also, is there any continuity with existing customers or does your relationship end after a sale? This is why even a follow up email Autoresponder system can make such a difference.

4. Lack of trained personnel.

That’s often a bottleneck in a business…especially if the CEO is wearing all the hats and hasn’t taken the time to train & delegate. Make sure there are people around you that you can offset responsibilities too. Outsource these functions initially if you’re a start-up but treat it as a priority, not a secondary thought.

5. Undefined business model.

It’s difficult to create scalability if you’re just trying make money from a variety of sources but haven’t tied it all together. What’s at the core of your business? Is it just you or is there a website or some other presence that’s independent of you?

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