3 Things to Analyze When Scaling Your Business

When you want to scale your business, you’re really talking all about economies of scale. Economies of scale occur when you increase revenue faster than you add costs, making the per-unit costs lower as you grow. Often, when we talk about growth, it looks more linear so as you increase revenue, your costs increase at the same rate.

Here are 3 things to analyze to create a plan for scaling:

1. Margins – how can you make more money with what you have already created? How can you reduce the cost per unit as you sell more? In other words, how can you sell more but not spend more to do it?

2. Systems – what process improvements, systems, and automations do you need to serve more customers in the same or less time?

3. Product/Service – can you focus on one thing and do it really well? Reduce complexity? Niche down further? How do you make it so simple that it is easily repeatable?

Scaling is also about economies of personal time & effort.

Here are 3 things to think about to prepare for scaling on a personal level:

1. Time – how does this plan increase the number of hours you will work? Does that align with your personal goals?

2. Team – do you have the right team to get you there? A support system? What will be required of you and where will you need to offload?

3. Exit strategy – where does this end for you? What would be your fairytale ending? Does this get you there?

As we continue to think about location #3, we’ll be working in lock step with our CFO (Sierra) to make sure that we understand:

1. The (goal/milestone) numbers we need to break even.

2. What items need to be purchased immediately and what can be an upgrade as we grow.

3. The (goal/milestone) numbers we need to hit BEFORE we take action on those upgrades.

Planning for growth requires knowing your numbers, but it also takes being clear on how you want your life to operate. For the numbers, we recommend aligning yourself with a good Accountant/CFO because they will take the emotion out of it. For personal alignment, we recommend getting around other Entrepreneurs (Haven & Collective groups) to have support from people who really understand this lifestyle.

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