Growth vs. Scale - They’re Different!
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Growing a company typically refers to increasing revenue, customers, or output by adding more resources—such as employees, infrastructure, or capital—to handle the additional demand. Growth is typically linear, meaning expenses and effort increase along with revenue.
Scale is different. Scale focuses on increasing revenue without a proportional increase in resources or expenses. The goal is to maximize efficiency so that the company can grow without dramatically increasing operational costs. Scaling is usually associated with implementing systems, technology, or processes that allow the business to handle more volume with minimal additional resources.
Two exercises that will help you evaluate how to 1) grow your business, and 2) scale a product or service offering, are the Ansoff Matrix and Scalability Finder. We are delighted to share these free resources as we spread the word about Value Builder - a proven method for helping founders increase business value as they prepare to exit, and an excellent tool that we use to educate the next generation as they learn how to think strategically and lead with confidence.
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Great job building a successful company. Alas, the job isn’t over.
When you’re ready to transition your business to the next generation, a growth strategy — and fueling that growth without driving up costs and draining existing resources — is critical to ensuring your company’s ongoing success. I would argue it is more critical as that next generation shift often means the business must sustain additional owners while continuing to pay back mom and dad who so often finance the sale.
Give a listen to Value Builder founder, John Warrillow, as he makes the case for demonstrating growth potential. Then, check out our Value Builder mastermind groups forming now.
John Warrillow, Value Builder founder, discusses Growth Potential, one of the eight key drivers of company value. BossCoach is a certified Value Builder Company, applying the principles to family businesses anticipating a generational transition of ownership.
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