Growth without a large increase in cost is tricky. Studying and crafting a scalable business model can help in both the short term and long term with the end result being both growth and profitability. The overall goal is to increase revenue without a cost growth. There are various ways to make a company scalable including moving towards the cloud in lieu of other options.
Here are some of the ways to achieve scalability:
1. Outsource whenever possible. There are some tasks that you may want to have control over in-house, but many jobs can be outsourced. There are many countries outside of North America that offer skilled populations savvy both in technology and English-speaking skills. Do you really need to hire someone at $20 per hour when you could hire an equally qualified candidate for $5 per hour? While you should use the same interviewing and screening process with an outsourced applicant, as you would use with someone local, you can find great talent elsewhere in the world if you look.
2. Cut back on IT costs. Keeping an IT team on staff can cost thousands per month. That’s a big expense. It’s also not an expense that will shrink as your company grows. Tech support is important, but you can save a bundle by moving your tech needs to the cloud. A fully managed cloud service means cutting all on-staff IT costs.
3. Understand automation. Sometimes a machine simply can’t replace what a human can do. The opposite is also true. There are programs available that can do everything from keep track of your books to schedule your appointments. Replacing a person with a program is one trick that people with a solid tech background know and use regularly. If a program can do what someone on-staff can do, use the program.
4. Surround yourself with good people. Nothing can sink a growing company faster than a team of bad hires. The people that you do decide to keep on staff should be solid, understand your product well, and generate excellent ideas regularly. These are the people that no machine or program can replace, but they will be few and far between.
5. Don’t get stuck on an assumption. It’s not uncommon for a startup founder to assume that people aren’t trainable. If you’re not going the outsourcing route or are afraid of the cloud, ask yourself if these fears are logical. You can train anyone with enough intelligence how to use your product, or what your product is all about. You can also work with a skilled cloud team to make sure that anything you do in the cloud is secure and comprehended by all. Not exploring these viable options is a really big mistake.
Exceptions to the rules
There are some exceptions to the aforementioned scalability tips (as is the case with any advice).
1. Outsourcing: Be selective. Hiring someone without English skills to run North American social media accounts just doesn’t make sense. Make sure that the hire you’re considering fits the bill.
2. IT: Signing up with any cloud provider isn’t a good idea. Do your research, and make sure that the company you’re choosing is personable, can customize options, and understands what your product or service is all about.
3. Automation: Can that person really be replaced? If you have any doubt, don’t automate (or don’t get rid of a staff member until the automation option has been proven successful).
4. Team members: This one doesn’t really have any exceptions. Surround yourself with the best – it’s that simple.
5. Assumptions: Sometimes, a hunch can be right. But, recognizing the difference between an instinct and ignorance is important. Do you really have a strong feeling about that decision, or is it a matter of uncertainty?
Showing investors that your business is scalable should be your goal from day one. Take tips from companies like Zynga (this company used Facebook’s existing platform to grow, and it worked very well), and learn lessons from startups like AirBnB (with barely any marketing budget, AirBnB managed to grow overnight by using existing resources).
Are the programs you need to use to reach automation available? Are they free? Can you move to the cloud easily? Would this cut costs? Finding existing solutions to problems is the fast and surest way to prove that your product or service is highly scalable, and that’s a very good thing when it comes to investor dollars.