Grow your business: Scalability
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Taylor Swift is a recent example of achieving scalability. She made some very savvy, yet intentional, business decisions that took her to the top of the entertainment industry. Here is what she did and how she did it, in order to expand and grow her brand.
Upon reflection, it is easy to see how Taylor Swift became a superstar and a super successful businesswoman in the process. She achieved both fame and fortune, not to mention providing a perfect example of scalability. Swift began with her Eras Tour and took it around the world. Then, just when fans thought the concert performances were ending, she pivoted and announced the Eras movie version being released in theaters. “Swifties” around the world clamored to see the movie, because they were not able to attend her live concert, or they couldn’t get enough of the entertainer and wanted to see the concert again.
Regardless, the timing was perfect, and her revenue numbers immediately switched from the live concert to the movie version. And if that wasn’t enough, once again, her timing was impeccable. As revenues from the theater venue peaked, Swift pivoted and announced her streaming version of the Eras tour on Disney+.
Being the owner of a business is one thing, but taking it to the next level of growth is an entirely different matter. Author Paul Graham describes scalability as the “potential to grow exponentially.” In order to achieve growth, first of all, there needs to be the potential for growth.
According to Abdo Riani in Forbes, there are many businesses this day and age that do not have the potential for growth. Riani said, “Traditional brick-and-mortar businesses, like local restaurants or service providers, often operate within a geographical area and have finite growth potential.” Other businesses have the ability to expand beyond their geography without incurring significant additional expenses. He cited an example, “consider the difference between a local bakery and a software-as-a-service (SaaS) startup. While its physical location and production capacity may constrain the bakery, the SaaS startup can potentially serve millions of users worldwide without significantly increasing its operating costs regardless of where it’s based.”
Graham focused on businesses keeping low marginal costs in order to accentuate growth. “As these businesses grow and acquire more customers, the cost of serving each additional customer tends to decrease.” he said. Obviously, he was describing economies of scale, which provide for greater profit, allowing those increased profits to be reinvested into more growth. He went on to describe Amazon Web Services and Google Cloud, by saying they “benefit from economies of scale by spreading their fixed infrastructure costs across a vast customer base. Their efficiency amplification enables startups a to outpace competitors and capture a larger share of the market.”
Author John Kitchens has identified four ways for achieving exponential business growth:
-Identify what obstacles exist that are preventing you from growing. Simply put, Kitchens asks “What’s limiting your growth? What’s holding you back from achieving your desired outcome?”
-Consider new opportunities, versus maintaining the status quo. While it is easier to be comfortable when things are familiar and you are in control, it is far too easy to become complacent and unwilling to change. According to Kitchens, “If you’re looking to scale, to 10x your business, it means you are willing to push yourself beyond what you think you are capable of and take risks…you have to be willing to try new things, explore new ideas and take on challenges that may seem daunting at first.”
-Think long range. In other words, be farsighted, not nearsighted. It is so easy to be caught up in the daily operational needs of your firm. Short term thinking is necessary, but it will provide you with short term growth. Kitchens encourages “funnel vision.” “Funnel vision represents a broader perspective that resembles the shape of a funnel,” he says. Begin by identifying many opportunities, refining them as you proceed through the “funnel” until you are able to identify one or more viable growth alternatives.
-Prioritize your actionable alternatives. “Your time is valuable,” Kitchens says, and you should be spending it on high-yield tasks that move the needle instead of getting bogged down in menial tasks.”
In order to sustain growth, business owners and managers need to understand the concept of scalability and apply it to their business model in order to achieve increased expansion and have a positive impact on their particular market.