What do we mean when we say a product is scalable? How does it work? Is it applicable in every business setting?

Growth is essential in our day to day life. It shows progress and of course enhancement. When you talk about growth in business,you talk about validating 8 products. 

Today, here’s what we will look at:

  • Defining Scalability
  • Important tips for building a scalable startup.
  • Activity

 

Quickly, let’s get started!

A lot of entrepreneurs think that their startup is the next big thing when in reality they’re just building a small business. 

How you can tell if your startup has the potential to be the next BIG THING is whether the founders are aiming for a scalable startup.

Looking at Africa set up, you realize that there are just a few start-ups that you can say have global relevance. Now, the big question is what exactly are you building? 

Myles Munroe once said that “ when the purpose is not known, abuse is inevitable”.

There’s nothing wrong in building your small businesses. Small businesses are not necessarily minor businesses, no! they are businesses that are limited (its operations and presence) to a certain geographical location.

Again, What exactly are you building?  A small business for your community, state or country or are you building a product that you want to grow fast? 

It’s best to define what exactly you want to build. For instance, imagine how long it took aircraft to reach 50million users, then compare it with the time it took Google and Facebook to reach 50million users. 

Investors will tell you that they love to put money into startups that are scalable, and ready to scale. But what does that really mean?  Simply stated, it means that your business has the potential to multiply revenue with a minimal incremental cost. 

You are ready to scale when you have a proven product and a proven business model, about to expand to new geographies and markets. A software product is a classic example of a scalable solution since unlimited additional copies can be quickly cloned for almost no incremental cost. 

I know some of you might probably be asking questions like; What if my business or idea is not a software-based business. Does it mean it’s not scalable? How do I make it scalable?

If you have been around the startup up ecosystem, you would notice that every startup up has a website. The reason for this is to aid automation and scalability. But there is more to scalability than just having a website, especially if your startup is not a software product. One would quickly ask, what is the difference between a startup and an actual business? The answer is …scalability. 

How fast can your startup grow? How many customers/users can your startup accommodate within a specific period of time? Can your startup acquire more customers/users without incurring additional cost? Would your customer/user require additional manpower? Etc.

These are some of the questions you may need to answer if you must build a scalable business. Remember I said earlier, you must not build a scalable business! 

Over 90% of businesses across the globe are not scalable…yet most of them are doing very well. Our friends in Yaba, Onitsha, Aba and Kano can attest to this fact…The Ojukwu and Sons limited etc. You get the idea… All we are saying is that you have to be clear about your visions…whether you want to build a startup or a regular business.

9 Quick tips on how to transform your business or idea into a scalable business.

I) Start by automating your product/service.

  • Create a standard operating procedure, aka user story.
  • Build a website where you can deploy your standard operating procedure – a virtual version of your business where you can automate your user/customer onboarding and product/service delivery process.

II) Convert your regular services e.g consult etc., to an online product/service. For a product-based business, leverage partnerships, franchise, and licences rather than building from scratch.

  • Focus on reducing the amount of labour it will take to make additional product/service available.

That is the additional cost of acquiring a new customer.

III) Building an MVP to validate your product/service before looking for an investor.

  • Make sure you have a scalable product/service before looking for an investor.  Build a strong team to take yourself out from the critical path, so you can work “on” your business rather than “in” your business. You don’t have a scalable business if it cannot run without you.
  • Every member of your team should be a marketer…ie, everyone should be involved in the sales and promotion process of your products/service.
    • Every member of your team should be a marketer…ie, everyone should be involved in the sales and promotion process of your products/service.
    • Don’t employ someone who cannot sell or promote your product or brand in their network!Don’t employ someone who cannot sell or promote your product or brand in their network!IV). Outsource what is non-strategic, focus on your top 5%.V). Build with real(paying) customers, not free users. You don’t have a business until someone is paying for it. Don’t waste your time on free users, you don’t have the luxury. Don’t validate your Product/service with free users except the users are the product. (Check Google and Facebook for more details). VI). Focus on marketing and indirect channels to get the message out quickly.
      • Every member of your team should be a marketer…ie, everyone should be involved in the sales and promotion process of your products/service.
      • Don’t employ someone who cannot sell or promote your product or brand in their network!

       

      VII). Build your business to be open-ended. Don’t seek to satisfy all your customer’s needs at once, give room for additional features, updates, and versions.

       

 

 VIII). Create a milestone – have a clear picture of where you’re going and how you intend to get there.

  • Be ready to retire any strategy or model that is not yielding results, even if is the core aspect of your business.

IX).  Attract and relish investor funding. If you must scale, you need to give up some of your business shares to investors. Not just for their money, but also for their expertise and network.

Automate your production….build a strong team so your business can run independently, …focus on your top 5%….focus on marketing and attract investors as soon as possible to scale up!

 

 

 

Activity

  1. Go back to your drawing board and apply the tips we listed above to turn your business to a scalable venture.
  2. Restragise (if need be).You must not build a scalable business
  3. Come back and discuss your new strategies with us.

 

 There you have it guys!

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