In recent years, several companies have emerged and grown at a pace never seen before. This phenomenon has increased the pressure for new entrepreneurs to high returns in a short time, but the results are not always as expected. But why do some companies grow fast and others don’t? The answer is simple and it is within the concept about scalable business.
Organizations that focus on scalability of their businesses succeed grow exponentially without compromising your processes and resources.
However, not every business has the right characteristics to be scalable. Want to know what a scalable business is what it takes to do that? Keep following the post!
What is a scalable business?
Scalable business is a company capable of multiply your billing without having to increase expenses to the same extent.
This is because she can reproduce your product on a large scale at a very low cost, obtaining a revenue increase inversely proportional.
For example: if you sell brigadeiros and have a considerable growth in the number of customers, your production costs will increase in the same proportion. After all, you will need to buy ingredients and more and spend more time preparing the sweets. That is, your business no is scalable, because revenue is proportional to the investment.
Within the concept of what is a scalable business, the increase in production costs does not happen. For this reason, this type of enterprise has a high growth potential and can even be internationalized, but in a shorter time and with a lot of less investment than traditional businesses.
What makes a business scalable?
A scalable business model has some fundamental characteristics. Are they:
- high demand in the market;
- expandable business model;
- standardization of the product;
- teachable production process;
- process automation;
- smart logistics.
Check out more details below and see if your company has the potential for scalability to achieve rapid growth!
1. High market demand
One of the main characteristics of what is a scalable business is having a product or service that is innovative or fills a gap in the market.
Offer something that people really want or need it is the basis for the success of any company, especially within this scalable business model.
2. Expandable business model
Thinking big is key. From the beginning keep in mind where the company wants to go, planning to dominate the market beyond regional or even national borders. Some elements are important in this process, among them:
- do a market analysis;
- understand the competition;
- see if your idea is scalable and capable of producing recurring revenue.
3. Standardization of the product
Personalized products or services no are indicated for those who want to have a scalable business.
This type of delivery requires more time and investment, in addition to hiring specialized professionals. To do this on a large scale, it would be necessary to increase production costs.
To grow fast, structure a business plan based on standardized products and services, which are easy to deliver in large quantities.
Netflix, for example, understood what a scalable business is and offers the same streaming service to all customers, whether they are 100, 1,000 or 100,000.
4. Teachable production process
Once the product is standardized, the production process becomes easily teachable. Thus, all employees are able to deliver exactly the same result, without dropping the quality.
A good example to illustrate this is the franchise system. In this model, franchisees acquire, in addition to the brand concession, a ready, tested and approved management model. S[oyouwillneed:[oserápreciso:
- learn the processes;
- pass it on to employees;
- replicate the service according to established standards.
5. Automation of processes
In addition to being replicable, processes must be automated. Look for the right technologies to accelerate deliveries without increasing labor costs.
The big secret of a scalable business is Do more with less, obtaining great results in a short time.
6. Intelligent logistics
There is no point in standardizing production if the logistics do not work efficiently.
The organization must be able to meet the demands of the sales team without difficulty, making all deliveries promptly. Again, automation tools are essential to achieve this goal.
Read too: How to assemble a sales team step by step
What are the benefits of having a scalable business?
Now that you understand what is scalability and what is a scalable business, let’s delve into the benefits of creating this type of company.
We know that a scalable business is capable of growing faster, but how does it happen? Check out the main advantages below and implement this management model.
Better delivery quality
As the processes are standardized, activities are better performed by employees. The more the production model is replicated, the more it evolves, which allows a continuous growth quality of deliveries.
Increase in market value
When a business achieves scalability, its market value tends to increase.
Companies with this management model are highly valued by the financial market, being able to attract investors and injections of resources to further expand their operations.
Scalable businesses are more likely to expand nationally or even globally. In addition, due to its agile and efficient production, this model is able to retain customers more easily.
What types of businesses can be scalable?
Previously, we cited Netflix as an example of a scalable business, as it manages to distribute its service on a global scale at a very low cost. But what other business ideas can achieve the same result? Below are some examples of what a scalable business is, so you can be inspired. Check out!
Softwares and apps
Computer software and smartphone apps are great examples of scalable ideas. The production is low cost, since it is all done online, without the need for large physical structures.
In addition, it is possible to deliver a standard product to all customers, obeying the logic of inversely proportional revenue generation.
Just identify a niche, a market need, and work with it creatively.
Collaborative economy services
Companies with collaborative economy services are also great scalable business cases.
THE Uber, for example, has become one of the largest transportation companies in the world without owning a single car.
The same occurred with the Airbnb, which stood out in the tourism sector without building any hotels.
In both businesses, everything was done with a app and a service of great adhesion. It worked so well that these companies grew rapidly and paved the way for the emergence of other apps along the same lines. That is the essence of what a scalable business is.
Ebooks and online courses
Infoproducts are one of the cheapest and most effective ways to build a scalable business.
The costs to produce an ebook or online course are very low: just invest in a good recording and video editing, or bear the costs of designing the material.
Then, just execute a good marketing strategy and look for a reliable online distribution platform. If your content is relevant, the idea has everything to work perfectly.
Read too: How to assemble a marketing team | Contraction manual
These were our tips on how to make your business scalable. Now that you are familiar with the subject, and you know what a scalable business is, how about putting what you’ve learned into practice? That way, your company will have much more chances to stand out in the market and achieve incredible results!
You can also choose to use the technology for other purposes, such as automating some sectors to reduce costs and increase business efficiency, such as, for example, adopting the automation of HR processes.
THE HR Consultant UK is a Human Resources platform that reduces the time spent on HR activities and people management and optimizes its processes, by automating functions such as admission, dismissal, recruitment, payroll and more. Talk to an expert and find out how to reduce your HR costs by 30%.
Did you like the article? Share with us in the comments what is your experience with this business model. We are available to answer any questions you have on the topic!