What Does Scaling a Business Mean?

What Does Scaling a Business Mean?

I get told all of the time, “Brad, I’m ready to scale my business but am not sure what to do…”

I then ask them about how many countries they are looking to launch in, and the typical response is that they’re just looking to add another store in the next town over. 

That’s not scaling. Shift your mindset to scaling to 30X as opposed to thinking of growing by 30%.

Scaling is a critical part of running a successful business—a commercial, profitable enterprise that works without you. It is the part that helps you reach the point where the business “works without you”.

You’re probably familiar with the term, but you may not know what scaling a business truly means, how it’s different from regular old growth, and if your business is ready to scale.  That’s what I’m going to cover today.

Let’s get started.

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What Does it Mean to Scale a Business?

Scaling a business means producing more output with less input; ever-more with ever-less. I also like to call this leverage. When you can leverage something once and get paid for it forever, that’s scaling. 

The Definition of Scaling a Business 

The art of scaling your business involves putting systems in place and people in place to run those systems so profit comes easier and the business can eventually run without you. I’ll teach you how to do this below. 

Growing vs. Scaling 

Scaling is often used interchangeably with growing, but they aren’t the same thing and the distinction is important. Scaling is growing, but growing is not scaling. Let me explain: 

Both growth and scale require an investment on the front end i.e. more space, more people, better tools and technology, etc. but the difference is that scale produces a far greater return on that investment on the back end.

It’s possible to “grow” and not experience an increase in profits or returns, but it’s impossible to “scale” without experiencing increasing profits or returns. 

Although “growing a business” always sounds great, scaling a business is far better. Scaling is what produces more output and less work. How do you know if you’re scaling or growing? If the next sale gets easier and costs less, that’s scaling. 

What Does Business Growth Look Like?

A business that’s growing may be expanding locations or making more sales, but in order to do so, they’re purchasing more real estate or hiring more salespeople. From an onlooker’s perspective, this business is growing, but as their presence and revenue grow, so do their costs. 

What Does Scaling a Business Look Like?

A business that is scaling, on the other hand, may be making 10x more in sales totaling $100,000, but in order to do so, it invested in software that cost them $5,000.

Now, the incredible increase in sales far makes up for the expenditure on the software and increases the profit exponentially. This is the kind of expansion you can expect when you seek to scale, rather than grow. 

5 Signs it’s Time to Scale Your Business

Scaling is an important goal to have for your business eventually but a premature focus on scaling your business can be catastrophic. You have to have certain practices in place and proven sales before you consider scaling. Here are five signs it’s time to scale your business: 

1. You Have a Product or Service that People Want

You can’t scale without a successful product or service that has a proven track record. If you aren’t making sales now, more salespeople or sales technology won’t help.  

2. There is A Demand For Your Business

In addition to having a sellable product, you have to have a target audience to sell it to. If your target audience is large and demand for your product or service is increasing, it could be time to scale in order to meet the demand and reach more people.  

3. You Have a Strong Team You Can Depend On

Your team doesn’t have to be large, but it has to be committed to the business and ready to help it scale. Scaling will initially require a team that is willing to put in more work, integrate new hires, and adapt to changing systems and technology.

If your team isn’t invested in the business or already diligent with their work, you need to invest in the team members and the company culture to ensure they are when you’re ready to scale. 

4. You Have The Right Experts 

As a business scales, it will need more legal and financial professionals to support expanding operations. A lawyer and an accountant are essential to ensure your business is operating legally and continues to do so as you scale. 

5. You Don’t Have Unsolved Issues

Scaling won’t solve your problems (unless they are related to efficiency). In fact, it will only make them greater. If you’re struggling with your sales platform, it will only buckle under more pressure with scale.

If your finances aren’t in order, they will only become messier with scale. Resolve any seemingly “small issues” before you scale and they become big problems. 

A good gut check on the scalability of your business is to ask yourself, “If you walked away from business for two weeks, what would happen to it?”

How To Scale Your Business

If you’ve checked off all five signs, you can answer the question “what does scaling a business mean”, and you will put in work now in order to scale so you don’t have to work in the future, you’re ready to continue. 

There are 9 steps to learn how to scale a business

  1. Determine the vision for your company
  2. Craft your mission statement
  3. Establish your culture statement
  4. Set specific business goals
  5. Build a future organization chart
  6. Create clear descriptions for every position
  7. Set measurable KPIs
  8. Develop how-to manuals 
  9. Create “the loop” 

I’ve created a guide to walk you through each of these 9 steps that you can grab here. 

Now, if you’re not sure if you’re ready to scale your business, that’s OK. I want to help you face your challenges and discover your strengths, wherever you’re at. Determine your next step and discover a clear, proven path to success by watching this video. 

Learn more about scaling and setting yourself up for success in business without making costly mistakes with my exclusive Apprentice Billionaire membership.

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