What Makes for a Scalable Business?

by / ⠀Entrepreneurship Startup Advice / January 4, 2021
scalable business

There’s no textbook formula for building a successful scalable business. There are, however, sound principles that lay the groundwork for success that make it easier to build a thriving company. One of these key building blocks is something entrepreneurs refer to as scalability.

If you can build a scalable business, you’re dramatically increasing your odds of building a successful business. In this article, we’re going to explore precisely how you can do this.

What is a scalable business?

“Scalable” is a word that gets tossed around a lot in the business world, but what does it mean?

The simplest definition for a scalable business is a company that has the potential and flexibility to meet increased demand and multiply revenue with minimal and predictable incremental cost. In other words, it’s easy to grow your business quickly when the opportunity arises (without dramatically increasing expenses).

Most small businesses are clunky and take years to respond to demand. Scalable businesses, on the other hand, can pivot and grow in a matter of weeks. And to go from the former to the latter, you simply have to make tweaks to your business model, approach, and expectations.

5 Tips for Making Your Biz More Scalable

A scalable business doesn’t happen by accident. Here are a few tips you can use to get your company on the right track:

1. Automate as much as possible.

Time is not scalable. There are only so many hours in a day, and as your business grows, you must learn how to operate within the same limited timeframe. One of the ways you do this is by automation processes.

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Process automation is more practical and cost-effective than ever before. Thanks to SaaS software and artificial intelligence, you can streamline almost any task and make it relatively hands-off. The key is to actually do it. (Most companies never take the plunge.)

For best results, pursue automation in administrative areas that typically require a lot of your time and mental energy. This includes accounting, HR, system security, ransomware protection, communications, marketing, etc.

2. Create SOPs for everything.

If there’s a process that’s unable to be automated, you should take the time to develop a standard operating procedure (SOP) for it.

An SOP is basically a written document with step-by-step instructions that explain how to execute a particular task, responsibility, or process. It’s developed in such a way that you can hand it off to someone and they can immediately take ownership over it.

3. Outsource and partner with other providers.

Just because you can’t do something in-house, doesn’t mean you shouldn’t do it. In fact, there’s a case to be made that you should do as little as possible in-house – outsourcing and partnering with others on most tasks to keep overhead down and risk low. (Best of all, your customers don’t even have to know.)

You see this a lot with marketing agencies. Many marketing agencies are able to stay lean and scalable by outsourcing their services. For example, a marketing agency might be really good at web design, but unskilled and inefficient at SEO. By partnering with an SEO reseller program, they can basically white label SEO service, sell it to their client, and then take a little profit off the top. It’s a highly efficient (and legal) way to provide maximum value to clients without becoming internally bloated.

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4. Maximize each customer.

It costs far more time and money to acquire a new customer than it does to retain an existing one. Scalable businesses find ways to efficiently upsell and cross-sell their clients as a way of maximizing revenue and saving time. If you want to eliminate unnecessary bottlenecks in your own business, you should look for opportunities to do the same.

5. Set aside cash.

One of the defining characteristics of scalable businesses is flexibility. And it’s impossible to be flexible if your business takes months to execute when an opportunity emerges. This is why it’s highly recommended that you set aside adequate cash – enough that you can make important shifts and investments when opportunities arise.

Putting it All Together

A scalable business is more efficient, more profitable, and more valuable. Should you ever decide to sell your company, the systems and investments you make on the front end will dramatically increase your value on the back end. Be meticulous, intentional, and poised. The proactive decisions you make today will positively impact your business for many years to come!

About The Author


Nate Nead is an avid online marketer, financier and tech executive, helping startups to Fortune 500 companies scale content marketing initiatives that provide significant value to bottom-line profits.