Many a consultant, coach and guru will promise to help you grow and scale your business, but what does that really mean? What is the difference between growing and scaling and which one is right for you? In this blog we’re going to look at why growth and scale mean different things, and how to use a business plan to inform the right decision for you and your business.
Let’s start with ‘business growth’. Traditionally this means adding in additional resources, such as more staff, or larger premises, to serve a greater number of customers or clients. Whilst growing your business should hopefully result in higher revenues, your expenses will rise as well.
Scaling your business, however, is when you look to increase existing revenue or open up additional revenue streams, without necessarily increasing the resources required. For example, you could raise your prices or create passive income streams. The key difference with scaling as opposed to growing, is that you’re increasing your revenue while maintaining or reducing your expenses.
Now let’s talk about you. Are you in growth mode or scale mode? Here are some top tips to help you find out what your business needs to deliver on your vision:
- Revisit your business plan. What is your goal for the next 12 months vs the next 36 months? Your business plan should be your north star. Consider whether more growth might be needed before scaling is possible.
- How much time do you want to be spending in your business? If you’ve been growing for a while, you might have been spending a lot of time hands-on. Could it be time to look at scaling so you can get some of your time back to do things you enjoy?
- Consider your mission and purpose. Do you have something established you’re looking to reach more people with? Or something new you’re looking to test out? Think about the legacy you want to leave with your business and let this guide you.
- Think about how you can work smarter, not harder. Whether you want to grow or scale your business, bigger is not always better – especially when it comes to premises! Regardless your business priorities, you should always be reviewing your expenses and trying to reduce them where possible.
Is a premises move on the cards for you?
Adding more floorspace in order to grow is also adding a slug of fixed overhead the business has to pay for each month before making any surplus. Think very carefully before adding overhead and be sure there aren’t other ways of growing your bottom line first. The time to be making that move to a bigger unit is when ‘not having that space’ is holding the business back.
Working from home or a small premises may be fine for you for a while, but if headcount is increasing or another production line is required, you are probably going to need accommodation that is better suited to your needs. If you need support finding the right premises for your growing or scaling business, I can help with the end-to-end premises and lease negotiation process. We’ll do it in a way that works for you, so you get the right premises on the right commercial terms.