There is a difference between growth and scaling. Entrepreneurs, even though they are familiar with the whole business term, are often confused about the difference between growth and scaling your business. That is why it is a favorite topic of businessmen.
There are many ways how to scale your business, and their description is given by choosing the best words but sometimes these statements get in conflict with each other, and the aspect of accuracy is far away. So, Altamira is here to understand what growth and scaling are and who it works for.
Many business people think that the growth of a business is the growth of one branch after another, and the increase of their share in the market is both growth and scaling, but it is important to understand what happens when a business grows and a business scaling. What kind of growth should you look for?
BUSINESS GROWTH VS. BUSINESS SCALING
If we look at the concept of business growth, we will see that as the company grows and develops, so does its revenue. This increase also increases their resources, and they have to spend on these resources to sustain their growth. For example, if a company’s income has increased dramatically by 50,000 USD it will have to hire a sales representative to sustain that growth, which will equalize the advantages and disadvantages. Now, although it seems that the company is growing, the growth of the company does not mean that it is moving towards growth because the growth has only matched its resources, and the business growth that is taking place, the company is not growing.
When businesses scale, their success differs from those of business growth. In this, the company rapidly increases its revenue while keeping its resources stable. For example, if a company earns a whopping 50,000 USD and spends only 5,000 USD on online marketing tools, then the company has benefited, and the company has grown because it earned huge profits at a very low cost. Thus the profit of the company took precedence over the losses of the company. This process is called scaling.
BUSINESS SCALING PLAN
Before you start a business you should have a business scaling strategy because if you do not have a business scaling strategy, then you will increase the business as well as increase the resources in one place when you arrive, you will wonder what progress you have made, what progress you have made. At some point, you may come to realize that business growth is not just about making a profit, it is about making a profit outweigh a loss.
The scaling process is beneficial because instead of focusing on revenue in business growth, your goal is to find out how you can take your product to more customers and make more profit. Are Highlight your efforts to increase the value of your company by increasing your performance?
HOW SAAS HELPS COMPANIES IN SCALING?
Although all companies can scale well, and SaaS also helps all companies in this. It is also a fact that the scaling of companies also depends on their nature, some companies scale better than other companies based on their nature. Service provider companies, for example, always have problems scaling them up because they always need the services of new people to work on their new clients.
However, if software companies are mentioned in terms of scaling, they can easily scale their business because they do not need to spend much to develop. They can sell their software to their new customers at a very low cost.
SaaS Software stands for SA Services. In this case, software companies that provide SaaS software are much more fortunate in that they are much easier to scale because they provide long-term services to their customers at a very low cost. Keep paying every month.
As for SaaS, it can be said, that it is a business in which there is a natural scaling as it becomes a non-stop stream of revenue.
WHAT CAN AFFECT SCALING IN A SAAS BUSINESS?
Because SaaS companies tend to scale naturally, their scaling speed is very different from other companies that are not of SaaS type, but sometimes even scaling for them. The meaning changes completely. For example, if a SaaS company adds a new customer to its server, it may take up almost no revenue. Bringing a customer to buy a SaaS can also be a daunting task, which can affect the scaling process.
Customer Acquisition Cost is a factor that can affect any SaaS company and slow down its scaling speed.
While we may assume that a SaaS company is an excellent business that has the natural scaling potential, we should also keep in mind that when it comes to customer action costs, It also becomes the most difficult industry to scale compared to other companies.
The customer action cost factor slows down the company’s scaling speed in such a way that some companies even suffer losses. It is because you enter the market with a high-tech product, and your audience includes people who are extremely difficult to reach. That’s why SAAS companies spend a lot of money to sell their software to reach new customers and get them ready for their product.