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Sales Growth vs. Sales Scale-up: What Does Your Company Really Need?

Written by Alex Ivanenko | Aug 3, 2022 7:52:00 AM

Starting a business is easy. All you need is months of sleepless nights and hectic days! But that is just the beginning. The real struggle begins when you have finally found your business and are now looking to establish its authority in the market.

A study by Harvard Business School concluded that nearly half of the startups fail within 5 years of their launch. And out of the remaining half, only 30% make it through their first 10 years.

But what’s that crucial step that helps a startup survive its early years?

And what ensures the business keeps shining with success for as long as you run it?

You either need growth or a scale-up to boost your business’ sales. But out of these two, which one does your company really need?

There are loads of factors that rule the choice. And the good news is: this article has all the help!

Difference Between Scale-up And Growth

Both Scaling and Growth are critical to a business' survival. Because if your business doesn't grow or scale-up then somebody else will take your business early or later. Your home-run food delivery business will forever stay that way if you don’t take the necessary measures to increase its revenue.

There are two primary concepts when taking your small business to the next level

Scale-Up

Scaling up a business means increasing the revenue generated monthly without adding considerable resources or capital.

Let’s say your company yields $200,000 per month through its sales. If you double its sales without adding any employees, raw materials, or investments, the process can be termed as scaling up.

An example would be a company that runs an email advertising campaign. With the proper research into finding the right audience, the company can scale up its revenue by sending emails to more people without increasing any cost. You can consider it as capitalizing data!

Growth

When a business adds more stuff to its inventory – employees, resources, capital, newer technologies, – and as a result, sales increase, the business is termed as growing.

Growth is a linear process and a more expensive one. You will need to spend much of your revenue and use your resources wisely.

For instance, when a service-providing company grows, it hires more people to provide their service to more people and spends more money on training and paying the extra employees.

Here are a few differences between the two concepts.

Scale-Up

Growth

Companies that scale-up focus on getting consistent results and improving their revenues faster. 

Companies with a growth mindset often find it hard to focus on anything other than survival since growth takes up much of their resources.

Scaling companies prioritize modern forms of marketing, for instance, social media and automation.

Growing companies rely on traditional advertisements such as offers and promotions.

The CEO of a scalable company will focus on strong marketing tactics, training recruits, and making the right decisions supported by data and end-to-end analytics.

The CEO of a growing company is likely to be stuck in coordinating between several departments instead of focusing on more vital tasks.

Scalable companies enjoy more profit margins since their spending is more diminutive.

The gross profit of growing companies tends to be low due to their high expenses of growing.

Benefits Of Scaling Up Your Business

A scalable business is the only one that is likely to survive. Without scaling your sales, your company will most likely die down the road. Scaling provides the necessary energy to keep your business going up and getting through turbulent periods.

Here are a few benefits of scaling up your business:

  • Efficiency

    Scaling a business is a surefire way to boost its efficiency. By planning a scale-up, your marketing campaigns will be better planned and executed and drive more sales at less costs.

  • Stability

    A scaled business is prepared to survive a crisis without being wiped off the face of the planet. The revenues are stable enough to bear losses both financially and strategically.

  • Flexibility

    Planning a scale-up will make your business more adaptable to changing circumstances. Increase in sales? Scale-up. Difficulty selling? Scale down!

  • Competition

    You can establish more authority among your competitors and clients if they see your sales going up without your resources going up.

How To Scale Up Your Business?

On paper scaling up means increasing your sales without substantially spending resources. But in truth you will need to spend much of your time and efforts scaling your business.

Here is a brief overview of the few common steps you can take to scale your business.

  1. Build a support team

    Your teammates should be there to support you by all means during a scale-up. You will need a group of highly efficient individuals that can deal with the influx of sales and customer queries. Also, your IT department should be top-tier. Scaling up requires software and hardware and a team of experts handling them.

  2. Focus on marketing

    A solid marketing campaign is essential if you want your sales to keep generating revenue. You might want to ask pro marketers to help you or get advice from some of the best marketing companies.

  3. Tools and technology

    Scaling up a business today is not the same as it used to be in the last century. Now AI rules most of these processes.

With that being said, these processes take up time, and doing them humanly will take an insane amount of time, energy, and costs. Hence, companies that want to scale are now rapidly moving towards full-funnel automation.

Here are a few tools that can help you massively during a scale-up:

  • A communication platform is one of the most critical technologies for businesses. You must stay connected with your workers, customers, and other people affecting your business. A platform that helps you make phone calls and send SMS, videos, and images can come in handy.
  • A CRM software stores and manages all the information regarding your customer relations in one place. They help you access old data and make new strategies with its help.
  • Workflow automation software cuts down your scaling-up cost by reducing the need for manual efforts. Also, automation software increases your team’s productivity exponentially by doing repetitive tasks that take up extra time.

When Should I Scale Up My Business?

Here are a few of the signs you should watch out for to indicate an appropriate time for a scale-up:

  1. Increase in customers

    When your prospects start increasing faster than your capacity to handle them, it is time to scale up your capacity through automation to prevent the rising of costs.

  2. Achieving original goals

    You must have had a few goals in your mind when you started your business. Once you have accomplished those goals, it might be a good time to look for new and more ambitious goals.

  3. Financial stability

    When your business has reached a level where it generates consistent sales, and the numbers indicate a financially stable future, the circumstances can be ideal for a scale-up.

Takeaway

Scaling and growing are two ways to boost your company’s revenue. While growing is more expensive, scaling up will curb your spending and multiply your revenue without depleting your inventory.

So, are you ready to reduce costs and increase the speed of sales?

ScaleboX helps businesses with full-funnel sales, marketing and service transformation. It helps you test new business ideas, launch new products, enter new markets, increase your market shares,boost sales, and yes, scale up.

Partner with us today so we can help you scale up and reduce your marketing, sales, and service costs.