An idea can only take your business so far if it is not scalable

I was watching a Shark Tank episode the other day on a subscription based service geared towards children. The concept seemed like a great idea and opportunity, yet Kevin O’Leary would not give them a deal. He believed they weren’t going to be able to keep up with demand and fulfill their orders at the pace they were going. In order for their business to be scalable, they would need much more money than they were anticipating in order to have a sustainable business. The episode started me thinking about the importance of preparation for scaling a business. 

Having a growing business sounds like a problem every business owner would like to have. That is, until you realize you may not be able to meet the increased demand. When you are bringing in more money but don’t have the time or the resources for additional clients, you have created a business model that you can’t scale. Below are four key ways to ensure that you have created a scalable business.

1. Automation
If you are considering a business idea that is both labor and staff intensive – it is not scalable. The first question you should ask yourself when developing a business plan is: “Will I be able to automate parts of the business as sales grow?” When determining your business’s operation efficiency, you must figure out a way to ensure your processes can be learned and trained. Document these processes and create handbooks and videos so that new people can be on boarded quickly and consistently. Automate the process so you don’t lose control of your operations.

2. Value
Does your business product or service have a unique value proposition? Another essential aspect in scaling a business is finding something that cannot be commoditized. If anyone can do or replicate your product or service, it’s not really yours. 

3. Recurring revenue
Your customer purchases your product or service. Now what? Is there another opportunity for your customer to purchase again? If so, how quickly? If your product or service is a one-time purchase your business you will not be able to grow at a rapid rate. There is a reason only few Shark Tank contestants are selling services. Services may be great for a business owner, but it is not a great opportunity for investors due to its lack of scalability.

4. Outsource
Especially during the start-up phase, entrepreneurs want to keep everything in-house. They are determined to have complete control of their processes and intellectual property. When scaling a business, however, it is essential to leverage outside resources. If you try to have your hands in everything, you will create bottlenecks and stunt your business’ growth.

No matter who you are, how much money you have, or who you know, everyone has the same 24 hours in a day. Time is an equal opportunity for everyone and it is up to you to make the most of it. The points above are all essential to guaranteeing your business can reach its maximum operating capacity. The Sharks are not just looking for an interesting business concept. They are looking for entrepreneurs who can handle more than their initial success and that they have the systems in place to maintain consistent growth. That way, they can get a return on their investment and you can have a successful business. 

Not sure if you have a scalable business plan? All Systems Grow is here to make sure you have the processes in place to take your business to the next level. From management consulting to business training and development All Systems Grow will make sure you have processes that can’t fail.


About All Systems Grow

We understand the importance of systems and processes in a successful business. Systems and processes provide a foundation for the company to operate and for its employees to properly function and execute the company’s plans effectively. Sounds boring and incredibly tedious we know, however, we also know the most successful companies operate from systems first. As a matter of fact, effective systems provide the framework for growth! Learn More

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