Is your business scalable? 6 tips you need to think about
Walking out of the Africa rising narrative of the mid 2010s comes as a breather for many people in business. Not because the narrative didn’t work, but because the narrative was anchored on a mirage, too much public relations but not much tangible output. The narrative of Africa rising was so strong that some people became famous for being famous, with titles like “award winning entrepreneur” readily available. The launching of businesses that actually weren’t valuable to anyone became the trend. While some so called entrepreneurs simply fizzled out of the public eye, this wasn’t so for some like Wilkins Fadhili. Business success isn’t simply based on the idea, but on the ability of the market to pay for your solution. If there is sufficient demand for your product or service then you can make a business out of it. But can you scale it?
Some businesses models are scalable, meaning that they can grow revenue exponentially. Others are less open to growth, generating instead a reliable but possibly less lucrative income stream.
Not everyone needs or wants to create a large, highly scalable business. The majority of small businesses today are small to medium family businesses, which can be very successful, satisfying, and small by design. But to scale can be an important strategic decision towards growth. If your drive is to dominate, scale is the only way to do it.
Businesses however successful pick up on the personality of the founders, and if you the founder desire a small quiet life, thus will be your business. Similarly, if you are the go getter “sitting on top of the world”, your business will mimic the same.
You need to consider what your business can achieve. What is the outcome you want? Is it possible to scale? Will scaling up rely purely on personal effort? This is more of an issue in service-based businesses than in product-based businesses. There is nothing wrong with an income stream that satisfies some of your objectives; the mistake that people can make is to have greater expectations of their business than the scale that they are functioning at can actually fulfill.
Your creativity as a business director will determine your success and how far you can scale. Creativity is individual and therefore hard to replicate. Beware of the “me too” kind of business ideas out there. Most of them will face a handicap in the ideas part.
It’s important to determine how big you want to become and assess whether your business can realistically flourish at this size.
So, before you start your business, think about these tips to assess whether it is scalable.
- Analyse the industry in which your business sits. Does your industry sustain both large and small businesses? How do the winning businesses look like?
- How practical is it to scale your business? What are the practical issues that could block your plans to scale up?
- If you are in a service-based business, is it possible to package your services while maintaining consistency? How will this packaging be implemented and measured?
- To grow you have to give up time, ownership or control. Which of these are you prepared to give up in order to grow?
- What ambitions do you have for your business in 3 or 6 years from now? Clarity of purpose and time determines your success.
- Once you are clear on this yourself, have an experienced and objective mentor take a look at your business model so you can analyze the potential and the pitfalls of scaling up.