Many small- to medium- business (SMB) owners / executives would consider a consistent, linear rate of “growth” to be a success. But to get an SMB to a large enterprise takes “scale.” And knowing the difference between the two terms is the key to understanding what is possible for your company.
Exponential Growth vs. Linear Growth
To grow, SMBs must be built on a scalable growth model. Scalability increases profits by increasing revenue faster than costs. If the business is growing at a rate where costs are commensurate with revenue, then you are growing in a linear fashion. While your business is (technically) growing, it is not scaling.
Scalability enables exponential growth – the kind of growth that lands you on the Inc. 5000 or gets a write up in Fast Company or makes investors take notice.
Companies can grow in a linear fashion, but it will be slow and expensive (and maybe not even sustainable). Therefore, SMBs need to find ways to push beyond any type of linear growth model.
5 Steps to a Scalable Growth Model
When you started your business, you may not have even focused on building a scalable business model; you had a great idea and you set out to monetize it. It might not be easy to make the change to a scalable growth model, but all companies have scalable aspects of their operations that make the process easy to get underway.
- Focus on your foundation. Even small businesses need technology systems to allow them to grow into a much larger company. Technology should always enable and never inhibit. Having robust, integrated cloud systems, such as Financials Cloud, Sales Cloud, Commerce Cloud (if applicable) and Talent Acquisition Cloud will allow you stop working in your business and work on those areas of your business that will drive scalable growth.
- Embrace automation. Automate any process that is time / resource intensive and/or is prone to human error. When you automate business processes, you have the opportunity to get your product / service to market faster, respond quicker to customers, and reduce operating expenses so that ― if pricing remains flat ― margins improve. The right software can support the workflows that will make employees much more efficient. It may be a upfront cost, but as your company grows, that software can minimize new hires, keeping costs down over the long term – the very definition of scalability.
- Eschew point solutions. Issues always arise as you grow, and it can be tempting to address every problem with a quick fix and a credit card. In addition, purchasing cloud apps to solve every problem as they arise is not a long-term solution (it is a band-aid, if you will, and pulling it off is going to hurt). Resist the temptation to slap together a myriad of inexpensive and inadequate options that will inhibit your growth (due to integration issues, security issues, data redundancy, and a lack of comprehensive reporting). Think as if your business is 10-20 times larger than it is right now. Never assume you are “too small of a company” for a solution that can help you today and tomorrow.
- Let some things go. Focusing on your core strengths and hiring or outsourcing the rest of the tasks associated with running your SMB is essential to scalability. If you cannot step away from the minutia of running day-to-day operations, you will be the company’s biggest bottleneck. Scalable business models are run by executives who know how to leverage resources.
- Realize everything is a work in progress. We have all heard the sayings, “Rome was not built in a day.” It is true. Rome was not built in a day. In fact, the citizens of Rome never stopped building their city. The same will be true with your growing company. Building a scalable growth foundation is never a “one and done” activity. As you travel up the growth curve, you will need to maximize the systems, processes, and people you rely on. That way when opportunities present themselves, your business is ready to grow.
Want to know more about how to just stop “growing” and start “exponentially growing”? Well, we would like to continue the conversation.
Download our ebook, and then click to chat with one of our SMB experts. They can help you to get your company firmly set up on your own exponential growth curve.