Scaling vs. Growth - What it means for my small business.

Hello my friend,

How are you doing today?

There has been tremendous feedback from the last newsletter sent out, and also, lots of questions and challenges which I will be providing solutions to in subsequent newsletters.

First, let me tell you how Chioma made more profit than Ngozi despite starting their sewing business almost at the same time; Chioma simply prioritized Scaling over Growth. Don’t get me wrong, business growth is important as it leads to expansion of business, product lines and increases in revenue by adding new resources (capital, people, or technology) to your business. In fact, it is essential at the initial stage of the business.

However, scaling your business is more important because you increase the revenue without a substantial increase in resources and incurring significant costs.

Scaling is a process-driven approach to growth. While Ngozi only concentrated on growing the business, Chioma focused on growth that could be managed.

See some of the strategies Chioma adopted:

1. Think Big: The mission and vision for her business was well communicated. She focused on not remaining a small retail outlet. She hired product-minded employees; customer-centric employees, alignment of product development with market needs, focus on selling and delivery efficiency and effectiveness

2. Don’t Celebrate for too Long: It is important to celebrate small wins, but don’t celebrate for too long.

   Chioma focused on how to use those wins to expand the business without incurring cost. She had targets of the kind of people she wanted to sew for, when she got them, she ensured she delivered quality dresses and was able to ask for referrals, rather than spending money on promotion.

3. Spend time In/On: Chioma spent enough time IN her business, developing process systems, conflict/customer complaints management, and adopting technology to make operations and selling smoother and efficient. When she achieved that, she moved to spend time ON the business, let the process run the business, while she focused on strategic decisions.

4. Optimal Highest Return: Rather than looking at ways to get a low return on investment, look at getting the highest (optimal), raise the bar! First, Chioma always got every member involved in decision making, they deliberated on ways on improving or changing the process to achieve optimal result before considering adding new resources. That is why she surrounded herself with smart and product-minded people.

5. Leverage: Have the right partnership and vendors. Chioma understood this perfectly, while Ngozi was everything in her business, the delivery person, the salesperson, the customer care, the accountant, and all there is to be, Chioma focused on having to make quality dresses and keeping a good relationship with the customers. She partnered with a delivery service, had a process of handling customers complaints, partnered with an accounting firm to handle all financials.

As you ponder on all of these in relation to your business, you need to take a deep look at your business, and ask yourself the following:

• Is my business growing or scaling?

• Do I have the right people in my business to help me scale?

• How can I leverage on process and technology to reduce cost and increase revenue?

• Do I stretch myself and team in raising the bar?

• How do I leverage to scale my business?

Don’t forget to send your feedback, and if you have any questions, please reply to this email. We are always happy to help.

Convener: Ayò-Bánkólé Akíntújoyè