How scaling a business is often talked about online, in books, and in seminars bears little resemblance to the oldest mention of the word found in business. Rather "scale" jargon has taken on many meanings in the business world.
Since the true meaning of scale seems to be lost, I'll cover what it means in relation to the growth and health of any business—the one that matters most.
Both 'growing' and 'scaling' refer to an increase; however, the distinction is in how each is achieved. The difference lies in the relationship between revenue and expense—specifically, gross profit.
The term 'scale' is a way of describing how well we increase our revenue/profit in comparison to expenses.
When we grow, expenses increase at the same or similar rate as revenue.
When we scale, revenue increases with little impact on expenses.
Scaling aims to increase profitability without significantly (if at all) raising costs, allowing the business to grow. We scale based on how efficiently we manage our business.
A scalable system is not simply defined by employees generating income for the business. It's about how employees get things done and how few are needed to do it.
Scaling is about manufacturing. Manufacturing is about production. Production is about efficiency.
The goal is to manufacture profit.
Scaling is not about our next big marketing campaign. It is not about reaching an ever-increasing number of people. Scaling refers to how we make internal decisions to increase our revenue/profit.
I've been teaching how to scale since I first introduced "Efficiency as Strategy" 24 years ago. It was 1998, and the company was an internet startup with $1,500 out-of-pocket, which sold for $30 million 18 months later, allowing it to roll up into one of the world's largest telcos today.
The term "Snipescale" refers to a method of scaling that is more focused and precise than traditional scaling or blitzscaling. All three have the same goal in mind but differ in how they get there.
If you were under the assumption that you needed to ramp up advertising and marketing to scale or hire more employees, now you know that is not the case. That allows you to concentrate on the most important aspect of your business:
how efficiently you run it.
"It's much safer to scale the company in relation to the leads you can generate than it is to hire new people to generate leads," says Balloon Works's Sidney Conn. "When we scale up, it's in manufacturing. Our sales staff can take on new orders without many new people."
—Hal Plotkin, INC’s Guide to International Business, Fall 1988
So, are you trying to grow or scale? Because that matters in how you proceed.
*I make no claims of completeness for any content found on Jack Pauhl. Instead, I’ve chosen to focus on the principles most often overlooked, forgotten, or heedlessly swept under the rug in favor of something else of less importance.