What is scaling in business and how is it different than business growth ?

Two important factor which entrepreneur look for are

Growth
Scaling of the business
Many people think that both are same things like A company getting bigger, gobbling up more market share, and making more money.
But the crucial difference between the scaling and the growth is that >

Growth of Business	Scaling the Business
Increase in revenue along with increase in resource.	Increase in revenue at a faster rate than the extra cost of the resource.
May earn $500 but to earn that they need resources like employees, sales representatives, etc.	Earn $500 without any additional resource — revenue comes from existing resources.
Additional revenue comes with additional increment in resources.	Additional revenue comes from no extra resources but from the existing ones.

For example, in order to catch up the market of the foreign country you have to open a new plant in that country that is called growth as the new revenue is coming from the new resources but, if the resource are not increase and their is the addition in the revenue then it is scaling of the business.

As a businessmen, its better to think for scaling-up business activity gather than the growing the business.
If we kept on to increase your revenue by adding more resources with a corresponding increase in costs, your growth is likely to stagnate.
No increment in profit/financial of the firm.
“Strategy for Scaling in business that focuses on increasing revenue while also increase efficiency.”
It will be worth the effort to reach more customers since you’ll be expending a comparatively low amount and therefore making increasingly large amounts of profit.
Increase in the company’s valuation by increasing the efficiency with which you can bring in new revenue.

All companies can be good at growing, but some are better positioned to scale than others.
Professional services companies often face challenges in scaling efficiently.
Will always have a problem with scaling their businesses because they need new personnel to do the work for each new client they service

SaaS (Software-as-a-Service) companies are natural at scaling.
They are able to sell their product to more customers with very minimal added cost.
SaaS companies are even more fortunate when it comes to scaling in business, because they are able to expend minimal extra cost to service long-term customers who will continue to pay month after month.

SaaS companies are naturally good at scaling in business from a technical angle.
While the cost of adding an additional customer to your server is close to null, the costs of getting that customer in the door can be quite substantial.
Customer acquisition cost (CAC) is the key metric that impacts the scaling prospects for SaaS companies.
In SaaS, the cost of sales and marketing is the real marginal cost.
Scaling SaaS is finding a scalable way to lower your customer acquisition costs.
Buyers are apt to be long-term customers with high customer lifetime value (CLTV), making a relatively high CAC sustainable over time, allowing the company to keep scaling up and up.
SaaS companies do not have much additional cost with additional customers or revenue.

Author: Vins Rafaliya

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