Scale allows companies to achieve potentially unlimited revenue by growing current income streams, find new ones, and improving the efficiency of their current offerings.
Think about it as if you were going into the restaurant business—you could buy a location and build a 3-star Michelin rating, or you could convert a vehicle into a food truck.
At a 3-star restaurant, you’ll have much higher overhead. You’ll need a world class chef, extensive training for your waitstaff, expensive decor, lots of permits, and a host of other costs. In addition to the infrastructure and food-related costs, you might want to invest in public relations to create a high-profile brand. If you succeed, you will have a tremendous revenue stream and possibly even some influence among the city you’re based in.
With a food truck, your overhead is low. Your strengths are your location flexibility and your agility. Your marketing costs are low because you have the ability to be in the right spot at the right time—you meet your customers where they are. If you succeed, you’ll have a great revenue stream that is fairly liquid.
Or, you could combine the two visions into a scalable process driven by data. Start with a food truck and get a solid understanding of both the market, the customers, and the logistics required for food production on a small scale.
Then, take this learning and move your operations to a brick-and-mortar. The transition comes with a new set of challenges, but because you understand that innovation is built upon constant change, you're able to apply your learnings as you tackle new challenges.
After succeeding in the brick-and-mortar, you use the experience to out what you're best at and how it lines up with what people actually want. Scale your business model to several brick-and-mortars while maintaining a focus on quality.
Now you have a healthy profit and awards—smart scale FTW!
As you grow, you’ll inevitably encounter growing pains. For example, increased pressure on systems that worked at one size, but can no longer succeed in a larger stage.
In an office setting, this usually comes down to people, process, and technology. If you’re not thinking into your future needs when you’re planning those pieces, you could be stuck in a situation that stunts your growth.
In this post, we’ll look at the importance of planning your business architecture when creating a scalable business and give some real-world examples. Let’s go!
Planning For People
There’s a reason we listed this one first—no amount of process or technology will allow a company to scale without the right people in place. One of the biggest questions business owners have when starting or growing a business is if they need full-time employees or independent contractors.
Independent contractors are typically more cost effective overall. Without the overhead of insurance, equipment, and even training, contractors are a great solution if you know exactly what you need. The two drawbacks you need to consider with independent contractors are their availability and the ability to accomplish tasks outside their area of expertise.
Full-time employees are generally more expensive, but you have a lot more control. You can shift deadlines and priorities around as needed, and you can also provide training so they can grow and learn new skills you need to accomplish your business goals. FTEs are likely more effective in situations where you’re looking to scale your product or service through innovation, not volume.
In many situations, a company will grow a core base of FTEs and then incorporate specialty contractors. In this way, FTEs can focus on more complex business objectives while contractors can add value through specific channels and modes of expertise.
Instacart showed great foresight into their people planning. Knowing that they would need an army of grocery shoppers to be able to deliver on their brand promise of grocery delivery, they hooked into the HelloSign API to avoid having to manually transact all those contracts and W-9’s. Read the full case study of how HelloSign allowed Instacart to scale their onboarding process.
Planning for Process
Enterprise Architecture Planning (EAP) is a system developed in the 1990’s to help companies design their technology around business strategy, allowing them to create processes that were driven by business need, as opposed to software capabilities. As business evolves over the years and things speed up, a new concept of capabilities architecture planning (CAP) is emerging.
While EAP was seen as a function of the IT department, CAP starts with strategy to marry technology to organizational practices to drive competitive advantage.
Digitalization is a problem that every company will eventually run into. It might create new operational models and technologies that will affect employees, customers, and vendors. By starting with a digital transformation strategy, companies will be in a better position to use process to their advantage.
Planning For Technology
Technology has certainly evolved over the last decade, but so has the way in which companies rely on it. Increasingly, there is a demand for a type of ‘just in time’ IT to support your business needs while remaining cost effective.
Cloud computing like Amazon Web Services are a great example of how you can scale your capabilities without actually buying a bunch of servers. It’s flexible and you don’t really ever need to buy more than you need.
On the desktop support side, it’s becoming more common to pay for managed services rather than employ a full IT staff. This allows business to bring in additional expertise and manpower when they need it, but remain lean in terms of full-time technical employees.
The ability to dynamically deliver the right amount of IT to support whenever and wherever you need it is the new model for technology at work.
The preparation needed in order to be able to scale quickly is essential for success, and that means a well-rounded knowledge of the digital landscape. Strategy and design thinking are paramount to reaching true digital nirvana. To help you develop your inside-out and outside-in approach to digital transformation, we’ve created a program to guide you along your path to success.
Learn more about Digital Strength, a free 12-course educational program that provides motivated changemakers with the knowledge and resources needed to push change initiatives forward