Are You Ready to Scale Your Business?

December 21, 2021

“Is your business scalable?” is one of the first questions I ask when I am instructing a group on how to scale your business. This question hits most people sharply. It’s surprising how rarely business owners are asked (or ask themselves) this all-important question. If the CEO is making all the sales herself, for example, it’s quite clear that the business is not readily scalable.

Being ready to scale your business means that you have a system in place in which you have customers who are coming back to you on a regular basis and are generating reliable cash flow. As you scale your business, think carefully about all of your systems and processes. Are they as streamlined and efficient as they should be? Are you unnecessarily involved in any of the stages of execution, including approvals? Do you have a system for generating reliable revenue and cash flow? Recurring revenue might include membership fees, subscriptions, courses, or payments for ongoing services.

There are so many ways to generate recurring revenue. For example, a lawn mowing company might offer a special price for cutting grass on a weekly basis if a customer locks in for one year. Plus, the company could throw in a cross-sell for seasonal weeding, raking, or mulching. A membership program could be as low as $15 a month, but this adds up if you have hundreds or even thousands of people paying that amount. It may not necessarily be the core of your business—it’s an extra—but it provides something additional and sustaining.

Once you have a sustainable, recurring model and know where the cash flow is going to come from, your business growth starts to snowball. It starts small, but gets bigger and bigger and gains momentum as it moves forward. The goal of scaling your business is to build a replicable system for delivering products and services that allow your business to increase its customer base without having to increase overhead at the same pace. The SCALEit Method™ enables you to grow, replicate, and expand your business while building a self-managed company that you can step away from for periods of time as it continues to soar.

You’ve probably heard of valuation. In simple terms, this is the value of your business should you decide to sell it. If your business generates static revenue—meaning earnings from a one-time sale—that would be considered a one-time valuation. However, if your business model involves recurring revenue, such as monthly or annually, then it’s a 3x to 5x valuation. This means that it’s worth three times the value when you go to sell it than if you just had static revenue, because the sales occur on an ongoing, predictable basis. Venture capitalists salivate over the business growth and ROI possibilities of scalable businesses that have recurring revenue.