As of last year, more than 60% of small businesses in the United States reported revenues below pre-pandemic levels.
Businesses are struggling to grow as nationwide shortages of materials and staff increase.
If you want to help your company succeed, you must know how to grow and scale.
Keep reading if you want to discover the differences between growth vs scaling in the workplace!
What Is Growth?
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When comparing growth vs scaling, most people relate growth to the size of the business.
The size of the business can be dependent on a few factors. Revenue, assets, and capitalization should all get considered when evaluating the growth of a company. You can even use the number of personnel working overtime to determine the company’s improvements.
The purpose of growth is to increase revenue for the business. Unfortunately, you’ll have to invest money to see the results. When you invest in the right things, you can grow revenue and quickly pay your accounts back.
Ultimately, business growth only comes at the expense of larger losses. You must take risks to watch your revenue grow.
Examples of Business Growth
Growing a business involves increasing top-line revenue.
During the investment stage, you might not feel the growth, but once you’re ready, you will see an influx in sales. Common examples include adding locations, franchising, or extending your products and services.
It’s common for businesses to grow by offering their products through multiple platforms. For example, businesses that only had brick-and-mortar stores are now offering online sales.
You can read in detail below about strategies for growing your business.
Product Development
Adding a new collection or providing more services are great methods for growing your business.
Keeping up with innovations and trends can ensure that your business is relevant. When you meet the needs of the community, before they get a resolution, you will see your revenue grow.
Product development is a fun strategy for growing revenue since it requires creativity. Don’t be afraid to have fun and let the skills of your team show with new products!
Diversification
A great way to grow your business is by focusing on diversification.
When you can reach a broader audience, your number of customers will increase. If you’re trying to connect with a market you’re unfamiliar with, speak with someone that can give your guidance. You won’t diversify and grow your business if you aren’t connecting with other potential groups.
Clothing stores try to diversify and grow by offering options to men, women, and children. You can also put your efforts toward connecting with other cultures and regions in the country.
Technology
Restaurants are a perfect example of an industry using technology to grow.
Investing in new tech can help your team recieve and process more orders each day. Without poor and slow systems, they can work more efficiently and increase revenue.
Another way that tech can help grow your business is that it can automate processes. When your staff isn’t held up on small, repetitive tasks, they can focus on connecting with the customers.
More than 80% of small businesses in the United States were using at least one digital platform. Providing info to customers and streamlining processes has helped many organizations.
Increasing Education
Whether you want to go back to school or send staff to classes, increasing education can contribute to company growth.
With advanced degrees and certifications, your team can offer other services and products. The more knowledgeable your team is, the more independent your company can be. When you’re constantly outsourcing work, you will spend more than you can make.
Hiring from within also increases when you support your staff through education opportunities. Partial reimbursements, time off, and pay raises can help your business in the long run with better staff.
Physical Growth
Does your office or shop feel cluttered and chaotic on the average work day?
Some businesses must grow in size before they can increase their revenue. Restaurants often have this problem when they don’t have enough space for tables. By adding a patio or addition to the building, they increase revenue by getting more sales.
If you’re having to decline orders or services because of your building, you should stop limiting yourself. Investing in more property can quickly pay back the bills.
What Is Scaling?
You might wonder, “what does it mean to scale a business?”
Scalability references the value that a business repeatedly provides to its customers. When you can generate new business by making small modifications and efforts, you are successfully scaling.
As revenue increases, the goal of scaling is to limit resources. Only by increasing resources slightly, companies can make more money. When you are adding revenue at a much greater rate than the cost, you are in the scaling phase.
Examples of Scaling
If you are an architect or engineer, examples of scaling can be found in everyday work.
Turning a small concept into something larger is considered scaling. When you build small replicas of a building to convince a buyer, you will need to scale it to its full size.
Other examples of scaling are growing tech businesses, like Google or Salesforce. These companies have increased revenue without having to change or offer much more than they already were.
Methods for Scaling Your Company
There are several types of scaling that your company can focus efforts toward.
Fractional and ratio scaling is used for representing objects and landmarks. For example, if you are increasing your building space, this would be an effective use of scaling. Linear scaling refers to the distance between landmarks and data.
Verbal scaling refers to using simple words and phrases to describe a feature. When you convert information, this is verbal scaling.
Below are a few helpful methods that can help you scale your company for more revenue.
Evaluate Your Business
Are you ready to start growing your business from the inside out or are you just doing your research?
Before you put money into scaling efforts, you must determine your current status to create a baseline. You should also look into your company’s finances at this time to determine if you can afford to spend more on materials, labor, and marketing.
If you don’t have a starting point, you can’t determine if your efforts are effective. Monitor and document when you start using new tech or automate processes.
Invest in Better Tech
Technology has transformed many businesses and increased productivity.
Investing in the right software, machines, and devices can speed up processes and help your company meet the needs of scaling. The great thing about investing in tech is that most items can get written off in your taxes.
Work with your team to discover what resources and technology they need to keep up with orders and projects. Cloud business phone systems are highly recommended for increasing revenue. They increase communication between your team and customers.
Automate Inventory
Most people are unaware of all the apps for inventory tracking that are free or low-cost.
Automating inventory processes is an effective method for scaling your business. When you don’t have to spend hours each week entering inventory manually into the system, you have time to focus on growth. Inventory software can act as a tool to give you more time to work on marketing and finding customers.
By streamlining the inventory process, fewer errors will occur and your entire team for work more cohesively. A great way to imagine how automation leads to scaling is that it takes the same effort to send an email to 10 versus 200 people.
Improve Company Culture
When you have a diverse team contributing to growth, you can more easily scale your efforts.
It’s common for company values to decrease when your scaling. Some get concerned that they are overcharging customers for the amount of effort going into the work. You should look for the best talent to staff your teams so that they don’t lose sight of what’s most important.
Try not to push sales over morals, since this can lead to employment problems and more.
Can You Differentiate Between Growth vs Scaling?
Learning about growth vs scaling can push your company further than it’s ever been.
Growing often comes naturally and easily if you’re marketing your brand. If your company has started to plateau, or can’t keep up with orders, however, scaling should be considered. Scaling can help you develop your business into something more without investing too much money or resources.
Don’t wait to speak with your team about tech and software that can help them complete projects. You can watch your revenue and customer database grow while planning your next steps.
If you want to learn more about the benefits of scaling and improving your business model, read our blog for the latest info!
