One of the biggest challenges for an entrepreneur is to determine if they are growing or scaling their business. Sometimes owners aren’t fully aware of the difference but there are a few key questions you can ask yourself that will help you determine which path you are on.
Am I free? Do I freely control my own time and schedule?
Do I regularly work on strategy for my business instead of day-to-day activities?
Am I removing myself from core systems and key processes – sales/lead generation, billing, collections, product/service delivery, etc.?
If you answered NO to any of these questions, it may be time to rethink your approach to revenue generation and how your business is managed.
Though there are a number of non-negotiable factors that must be considered when scaling a business, the products and services you offer are the foot soldiers in the effort. Not all companies, and certainly not all products and services can scale, but thinking outside the box and defining yourself by the benefits you provide, not the products and services you sell is one way to help you consider additional approaches to revenue generation that is scalable.
So what makes a product scalable? The simple answer is the cost of each incremental unit you sell should be decreasing rather than increasing or remaining constant. In accounting speak – the marginal cost to deliver each additional unit must be declining.
Some products can do this relatively easily – products and services that are delivered electronically is a simple example. Once the infrastructure and platform are built, the cost to sell one or a million units declines as the cost is spread across an increasing number of units. Think Amazon and e-books.
But if your product or service does not fall into this category, how do you make this happen? It usually requires stretching your idea of what it is that you offer.
When I had an idea for my first book, I learned that it was going to be very expensive for a small business to print, pack and ship individual books to individual readers. I also learned that as a small publisher with only one title, no traditional book store would stock an individual title.
So we started doing some brainstorming. Was I really writing a book? No – I was delivering information i.e. content, and the book was only a delivery vehicle for that content. That helped me recognize that in addition to hard copies and soft copies of the book, e-versions, e-courses, audio books, online workshops, video classes, podcasts, etc. were all viable ways to deliver the same content to different audiences through different formats and media. Each has an appeal to a slightly different audience, not based on interest in the content itself, but in the way it is presented.
This is an important point to keep in mind – the preponderance of media options now available to consumers allows them to choose which medium is most effective for them. Your customers can only take advantage of this if your product or service is delivered in that format.
How many times have you had an interest in something, only to let it go and fail to pursue it further because the only medium through which additional information and content was available was in some form that you didn’t really like? Maybe you aren’t a big reader. If the information and insight you are interested in is only available in the form of a book, newsletter, magazine or online article that you have to read, you may not have been motivated enough to invest the time to learn more.
But what if you learn that the same information is available in a podcast that you could listen to as you traveled to and from your appointments during the day? Same info, different distribution channel, and suddenly you are interested again.
Product development and product innovation are truly where scalability begins, so I challenge you to rethink what you offer your customers. Customers don’t buy things – they buy what those things do for them (entertain, educate, inspire) and/or how they make them feel. When approached from this perspective, how to continue to add to your pipeline of products and services becomes a little easier to think about.
The steps in the process are simple:
- Define what it is that you truly offer – comfort, security, knowledge, insight, support, simplicity, peace of mind, entertainment, beauty, order, etc.
- Consider all the ways you might provide this offering in different formats and from different perspectives
- Pick one or two and try them out.
- Get help working through the process if it becomes too cumbersome or if you can’t get traction because you need to know or learn more.