Growth or scaling – which one should you focus on in your business?
There’s been a lot of talk about scaling in the online business space lately, and at times it’s been used interchangeably with growing. This means that sometimes business owners may turn to the wrong type of strategies, or focus on the wrong things, when they want to increase their revenue.
I don’t want you to spend your time and energy on activities that don’t fit the current season of your business. Knowing the difference between growth and scale will help you make better decisions on the advice, support, and strategy you seek out.
A quick distinction between growth and scaling
Both are ways for businesses to increase revenue, but…
Growth is a fairly linear thing – it’s when a business adds new resources to be able to produce and sell more of their service or product.
Scaling is more exponential – it’s when a business takes steps to increase revenue with a minimum increase in resources.
So what does this mean in practice?
Growing your business
Growing your business means that you’re looking to increase your revenue by increasing the amount of resources that go into delivering on those sales. This might mean for example increasing your hours, hiring others to increase the hourly capacity of your business, or investing in software or platforms that allow you to reach more people or make more sales.
One of the women I worked with has an online shop where she sells self-care products. The more product she wants to sell, the more goods she has to buy to be able to create more stuff to sell. Because it’s not sustainable for her to keep up with growth selling physical products on her own, she’ll have to get help before the orders exceed her capacity to make products. Growth for her means both spending more money on the products she makes, as well as hiring someone to help her increase production.
The tricky part about constant growth like this, is that it also takes a constant increase in resources/expenses.
This is where scaling your business can come in handy.
Scaling your business
Scaling your business means that you’re looking to increase the amount of revenue you make, without having to increase the needed resources, time, or effort than you (and your team) already do. This might mean streamlining services or offers to be able to deliver on more of them in the same time, or making a 1:1 offer into a group experience, membership, or course.
Scaling your business can look very different depending on where you are in your business, *and* what type of business you run.
For example, someone who has a service-based business could scale by raising their prices, or coming up with a way to spend less time per client so that they can take on more clients in the same time. For a coach it might mean running a group coaching experience instead of working with people 1:1. Something that’s been popular lately is creating an online course that teaches what you normally would do with your 1:1 clients, so that after creating the thing you can be more hands off.
Scaling is generally not possible in your business until you have a larger pool of potential customers coming your way. Even if you create a course that you can in theory sell to thousands of people, it won’t happen unless you have a large enough audience.
The step many entrepreneurs miss as they grow or scale their business: maintaining
Many business owners run into trouble when they’ve sold more services than they have the capacity to deliver on.
This can result in them
not having time to market their business anymore, and seeing a dip in sales for future work while tending to their current clients
not having time to deliver on the services they sold, and they end up falling behind on deadlines and disappointing customers and themselves
And this can feel depleting because we’ve been told that growth is a good thing – and there’s a pressure to make more (and more) sales. But it can put us out of business if we’re not paying attention.
So the solution? After a period of growth or scaling, spend some time maintaining.
The goal during this period isn’t to increase your revenue, but to elevate and simplify the operations and systems inside your business to match a recent growth spurt. This allows you to make sure that everything’s working, that there aren’t issues arising from having grown or scaled your business.
update systems, practices, and workflows inside your business (make sure that each step in any new or added processes is accounted for)
streamline and simplify tasks, activities or offers that are taking up too much time and effort
iron out any issues that arise that you hadn’t anticipated as you were ramping things up
How long should you maintain?
How long you stay in maintaining mode is very dependent on what type of business you have, what kinds of strategies you’ve used to grow or scale, and how long it takes to get your business practices caught up with the changes. Could be a month, three months – or six.
It’s also possible that even if a business owner hasn’t reached a point where they’re booking enough client work, they might need some maintaining. Evens if th'e’re still growing towards their wanted full-time income, they might be overwhelmed and frazzled with marketing and admin tasks already. If they can’t keep up with their current situation, it’s hard to carve out more space for client work.
Taking a bit of time to allow yourself to get your business operations and practices simplified will help you make space for more revenue-generating work. It doesn’t have to happen over a period of several months It might just mean taking a couple of days to get a big picture view of all the things you’re doing. Identify a few things you could stop doing, and a few key things that you could do in a more streamlined way.
Being in maintaining mode from time to time might lead to a bit slower revenue growth in the short term – but it’ll be more sustainable in the long run, because you’re increasing your revenue and investing your resources at a more sustainable pace.
Not to say you can’t increase your revenue quickly! When you notice that things are taking off, make sure that you’re building in time to catch up with your growth, too.
What if you’ve had enough growth?
At some point, you might simply choose to maintain the level of revenue you’re at, because it’s enough for you.
Maybe you don’t want to take on more work or more responsibility in terms of hiring more staff or spending more resources on more revenue.
Maybe you’ve grown where you want to grow, and are happy staying there.
Maybe you just want to simplify inside your business a little bit so that you can keep your current revenue but spend a bit more time away from your business.