How do you scale your business, other than using building IP-based technology? GHV Accelerator’s Founder Vikram Upadhyaya weighs in
To scale your business what can you do, other than using building IP-based technology? Gurgaon-based GHV Accelerator’s Founder Vikram Upadhyaya weighs in
What is scalability?
Scalability is the capacity of a company or system or a process within an organisation to manage the increase in demand. That is, a business is said to be scalable when it can be expanded enough to accommodate the growing business needs. Scalability helps a business grow as per its full potential. Scalable conditions provide a room for economic growth within a company.
A scalable business model helps you capture the full potential of your concept. It allows you a better chance to be a leading brand in the market. Scalability also allows you to quickly adjust plans to capture additional, unplanned demand. Often when opportunities come up, organisations are not ready for scale and they miss on a chance to move into a different orbit of scale and growth.
For example, consider that you own a drug manufacturing company. In case of an epidemic, there will be more demand for drugs so the company should be able to meet the increased requirements.
Why scalability is critical for businesses?
- Investors invest only in businesses that are scalable. Scalability is important criteria for investors in deciding whether to invest in a particular business or not. Better the scalability, higher the economic value of the business and therefore higher the investor interest.
- Scalable businesses are more attractive to strategic partners. Scalable businesses have a greater chance of attracting strategic investors or partners and a strategic buyer is likely to be interested if the future potential of a venture is higher.
- Scalable businesses attract better talent. People want to join organisations that have the potential for growth. Scalable business models allow businesses to grow, thus making them more attractive for professionals to consider joining.
What can you do to make your business scalable?
- Outsource non-core tasks: Transfer some specific tasks that can easily be contracted out to another larger company that is focused on that task. Think of the production of some specific components. Can some other company produce it? If yes, would it make your business more scalable? That paves the way for your organization to focus on the core of your business, as also leveraging the cost and operational efficiencies of someone else that is focused on doing what you outsource.
- Process orientation: Introduce process as your venture scales up. Make the processes simple and easy to understand so that training and on-boarding time for new employees is lesser.
- Reassess your portfolio of products and services: Evaluate the efforts, management time and investments required to produce a product or a service line against the contribution that particular product or service is making to the overall business. Is it worth it? If not, then assess if that business really needs to stay or can be hived off, or if required, discontinued.
- Automate routine processes: Delegate everything that you can in your business using the “self-service” approach. That means, delegate work to non-human systems that require no human intervention. For example, consider using the online ordering system, improved Web services, automatic updates to the customers etc.
Every start-up business model need not be scalable. But if your concept has a large base of potential customers who can be serviced profitably – you should think of creating the right processes, building the right infrastructure, making the right investments and hiring the right talent to ensure that your business is able to capitalise on the full potential that the concept has.
The author is the Chief Mentor and Accelerator Evangelist at Gurgaon-based GHV Accelerator. He is also the Founding Board Member of the Indian Angel Network Incubator.
Published at e27