Scalability is a business’s ability to adjust and adapt to growing or shrinking demands. For example, a hotdog stand can serve 10 to 100 customers in a single hour without letting a single customer go away because of long wait times or poor customer service. Another example is a business that suddenly becomes profitable and popular that can manage to provide its service or products to a sudden influx of customers.
Of course, not all businesses can adjust or scale by default. Going back to the hotdog stand example—a one-person operation can’t easily cater to a sudden influx of a hundred customers. Having a scalable business needs a lot of investment or operation. And for a hotdog stand to be scalable, the owner must prepare and anticipate the sudden rise in demand. For example, the hotdog stand owner may have spare part-timers to help the business when many customers want to eat.
At a glance, having a scalable business can result in massive profits. However, are there other reasons why scalability should matter to every business? To know, continue reading.
Scalability Allows A Business To Grow
The sudden rise in market demand isn’t always just a fluke or a fluctuation. Sometimes, it can become a long-term trend. Being capable of scaling during these moments can allow your business to grow.
When market demands go up or become favorable to you, it becomes an opportunity for your business to grow. After all, being more profitable than usual is one of the key drivers to business growth. You must grab the opportunity to have the chance again.
Know that one of your many competitors can take advantage of that opportunity. And if they dominate the market, you may lose customers. There’s a great read here, particularly if you’re in the e-commerce industry.
Scalability Prevents Expansion Failure
Aside from that, having a scalable business can prevent your plans of expanding your business from failing. Using the hotdog stand example, trying to grow it by buying more hotdogs to accommodate all customers but failing to have extra employees to help you sell can only lead to failure and losses. After all, unsold hotdogs can only spoil if you get rid of them fast.
Your business can serve your customers without making drastic moves if your business is scalable. And even if you suddenly make potent moves to expand your business, preparing your business for scaling can prevent you from failing or, even if you fail, experiencing massive losses and problems with sudden issues with your business taxes.
Scalability Prepares Your Company During Low Points
If there are high points in the market, there are low points. These low points are when the market slows down and the demand for your services or products tremendously decreases. Scalability enables your business to adjust for these situations and prevents you from, as usual, experiencing losses.
Aside from preparing your company during low points, having a scalable business allows you to only spend the right amount of resources depending on the market trend or your business situation.
Scalability Teaches You To Run Your Business Efficiently
There are a lot of lessons to be learned when making your business scalable. However, one of the biggest lessons you can learn as a business owner is how to make your company run as efficiently as possible.
For example, scalability lets you understand that there are a lot of opportunities for you to run your business successfully. Running a scalable business can help you identify those opportunities and know when to grab them with reduced risk.
Another thing that you can learn is the concept of the period of hypergrowth. The period of hypergrowth is when scalability shines the most. Know that each company can initiate this period. If your business is not scalable, it can immediately hit a roadblock, as discussed in one of the previous sections above.
Scalability Improves Your Management Staff’s Ability To Handle The Business
You can’t just decide to make your business scalable. Know that everyone from the ground up should adjust to it, particularly your management staff. Keep this in mind, as it’s one of the crucial traits of having a scalable business. Mainly, below are those traits:
- A business is scalable if it has an established team of chief executives, stakeholders, and advisors that can guide the company in the right direction.
- A business is scalable if it has established and selected the right tools to measure its growth and efficiency.
- A business is scalable if it has established brand messaging and follows through with it consistently.
Conclusion
Those are the reasons why scalability matters to every business. Primarily, scalability is about ensuring business growth, meeting market demands, and becoming efficient regarding business operations. And definitely, every business needs those three aspects.
