Conditions for scaling a business
Posted: Thu Jan 23, 2025 3:18 am
The general scheme for scaling a business looks like this:
launch of one business unit;
bringing it to a stable income;
repeating these actions sequentially for new business units.
Another scaling option involves opening a small retail outlet and then expanding it into a supermarket or chain of stores.
But it is important to understand gcash database that not every business can be expanded. For example, a family bakery, where the owner himself bakes bread and sells it, cannot be scaled, since it is impossible to expand a specific employee. At the same time, an insurance company or travel agency can be zoomed, since the owner is most often responsible for organizational and management issues, and hired employees are directly involved in selling tours or policies. With a stable increase in profits, you can create a network of agencies.
However, you shouldn’t rush into creating a network of antique boutiques, even if the shop brings in a good profit.
Conditions for scaling a business
A business that can be scaled has the following characteristics:
Financial success. For example, catering establishments are considered successful with a profitability of 20%.
The concept is understandable to a wide range of people. Elite projects designed for a small number of aesthetes are more difficult to scale.
Repeatability. The business concept can be easily used when opening a new point of sale. This means that in the process of scaling up you will not have to look for a famous designer or order special materials that are produced at a single enterprise in Europe and wait six months for their delivery.
Low or medium price segment of the business project being expanded. The purchasing power of the population remains at the same level, which is due to the growth of inflation and the lack of indexation of wages. It is easiest to expand stores offering inexpensive goods, fast food restaurants, etc.
Business is scaled primarily to increase income. In addition, a network of enterprises will in any case bring more profit than a single point of sale. And besides, as the enterprise grows, the brand value also grows.
Scaling allows companies to conquer the market and play by the rules that are favorable to them. In this regard, in some cases even not very profitable businesses are expanded to increase their profitability. This approach carries certain risks that are justified with a competent approach.
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It is worth considering scaling business processes if the flow of clients, and with it the income, is growing steadily, for example, by 5% or more weekly. If you do not expand such an enterprise in time, you may encounter a number of problems:
Depletion of inventory will result in products running out faster than they arrive in stock. If customers do not receive what they want, they will start looking for similar products from competitors.
A shortage of staff may result in no one to accept, process and send orders. The second option is that employees are overloaded, which will lead to errors and, as a result, to customer dissatisfaction.
Problems with product supply and delivery due to the inability of the existing infrastructure to cope with increased volumes. Such delays result in loss of customers and reputation for the company.
Download a free selection of tools for calculating KPIs and increasing marketing metrics
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
Download for free and implement today:
Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
Find out what metrics are needed to properly optimize your website
40 Services for Working with Blog Content
We have collected the best services for working with content
How to define your target audience without mistakes?
A proven guide to defining a company's target audience
Download the collection for free
launch of one business unit;
bringing it to a stable income;
repeating these actions sequentially for new business units.
Another scaling option involves opening a small retail outlet and then expanding it into a supermarket or chain of stores.
But it is important to understand gcash database that not every business can be expanded. For example, a family bakery, where the owner himself bakes bread and sells it, cannot be scaled, since it is impossible to expand a specific employee. At the same time, an insurance company or travel agency can be zoomed, since the owner is most often responsible for organizational and management issues, and hired employees are directly involved in selling tours or policies. With a stable increase in profits, you can create a network of agencies.
However, you shouldn’t rush into creating a network of antique boutiques, even if the shop brings in a good profit.
Conditions for scaling a business
A business that can be scaled has the following characteristics:
Financial success. For example, catering establishments are considered successful with a profitability of 20%.
The concept is understandable to a wide range of people. Elite projects designed for a small number of aesthetes are more difficult to scale.
Repeatability. The business concept can be easily used when opening a new point of sale. This means that in the process of scaling up you will not have to look for a famous designer or order special materials that are produced at a single enterprise in Europe and wait six months for their delivery.
Low or medium price segment of the business project being expanded. The purchasing power of the population remains at the same level, which is due to the growth of inflation and the lack of indexation of wages. It is easiest to expand stores offering inexpensive goods, fast food restaurants, etc.
Business is scaled primarily to increase income. In addition, a network of enterprises will in any case bring more profit than a single point of sale. And besides, as the enterprise grows, the brand value also grows.
Scaling allows companies to conquer the market and play by the rules that are favorable to them. In this regard, in some cases even not very profitable businesses are expanded to increase their profitability. This approach carries certain risks that are justified with a competent approach.
Read also!
"Marketing Tips: How to Show That Your Product is the Best"
Read more
It is worth considering scaling business processes if the flow of clients, and with it the income, is growing steadily, for example, by 5% or more weekly. If you do not expand such an enterprise in time, you may encounter a number of problems:
Depletion of inventory will result in products running out faster than they arrive in stock. If customers do not receive what they want, they will start looking for similar products from competitors.
A shortage of staff may result in no one to accept, process and send orders. The second option is that employees are overloaded, which will lead to errors and, as a result, to customer dissatisfaction.
Problems with product supply and delivery due to the inability of the existing infrastructure to cope with increased volumes. Such delays result in loss of customers and reputation for the company.
Download a free selection of tools for calculating KPIs and increasing marketing metrics
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
Download for free and implement today:
Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
Find out what metrics are needed to properly optimize your website
40 Services for Working with Blog Content
We have collected the best services for working with content
How to define your target audience without mistakes?
A proven guide to defining a company's target audience
Download the collection for free