Growth vs. Scaling: What You Need to Consider


Share on LinkedIn

You probably hear the terms growth and scaling daily as a business owner. However, if you’ve equated these two terms with being similar, you’re missing the difference in their concepts and application to your financial goals. While scaling refers to profiting by increasing revenue faster than incurring costs, where growth is all about earning profit at the same pace you add resources.

If your current business strategy brings significant growth, you may wonder how to scale without overwhelming your resources. This article will cover some key areas of consideration to ensure you avoid failure.

Growth Vs. Scale: Top Considerations

If you haven’t already realized, growth strategies are just one segment of your business strategy. You also need to implement processes and systems that support your goals. Financing will also play a significant role in helping you expand your operations quickly if you don’t have the resources to keep up.

Below are aspects of growth and scaling you should investigate further when developing a road map to long term growth and success:

Identify Relevant Goals and Create Strategies to Achieve Them

One of the most exciting aspects of owning a business is the many directions you can take. However, avoid getting caught up in every appealing opportunity that comes your way. Your company has a central focus, and any goals you take on should align with it. Anytime you take on a new strategy, you can expect some disruption to your operations, so make sure it’s worthwhile to do so first.

Are You Adequately Funded for Rapid Scaling or Growth Opportunities?

The reality is that some growth opportunities may appear when you don’t have the resources to leverage them. Scaling to meet new demand and growing pains always costs money, so you must already have resources to tap into and leverage this new momentum.

Many businesses rely on the following funding options to support their growing companies:

  • Equity investment
  • Venture capital
  • Bank loans
  • Crowdfunding
  • Bootstrapping
  • Opening lines of credit
  • Forecasting receivables
  • Kickstarting

Taking the time to research these options early into the life of your business will ensure better strategic positioning to receive funding in the future.

You Have to Scale Your Organization Too

How your company is structured will change as you begin to grow. So will how you organize it. Having a roadmap in place that can clearly define roles will help your team manage the challenges of scalable growth. Businesses that fail to plan ahead for operational and function changes risk the following:

  • Burnout
  • Higher turnover
  • Increasing lead times
  • Customer experiences impacts

While you want to gain customers quickly, you may hope to avoid increasing your headcount right away. Instead, consider creating an organizational chart early on to better understand workflows and potential bottlenecks that could occur. With this insight, you can forecast additional roles months and even years ahead of time to ensure critical positions have the support necessary, especially if the labor market becomes tight.

Protect Your Assets–Including Your Employees

As your business grows and your operations must scale to meet demand, you may need to increase your team size. Employees are essential to your success but can pose the most significant risk. Workplace injuries cost employers billions in claims every year in the United States. The majority of states require companies with one or more employers to carry insurance coverage to cover expenses related to on-the-job accidents and illnesses, including:

  • Hospital bills
  • Lost wages
  • Decreased work capacity
  • Temporary and permanent disability claims
  • Negligence suits
  • Accidental death

When reviewing your business insurance policies, these are just a few of the covered workers’ comp costs to keep in mind. If you don’t already have this policy type or haven’t updated it recently, you should take the time to do so. Inadequate coverage can leave you shouldering the expense of an injury claim, impacting your growth and scalability.

Empower Your Company with the Tools for Success

Managing your day-to-day business tasks will get more complicated if you opt to scale. If your current processes and systems cannot handle the increased demand, be ready to upgrade. Upgrading could include investing in technology that automates much of your routine tasks so you can shift staff to other functions.

It’s not uncommon to outgrow software and equipment as your company expands its operations. However, you should already have a plan to avoid unnecessary hiccups in departmental workflows. As you grow, your systems and processes need to keep up with the increase in volume.

If you opt to subscribe to software like Salesforce, you may also need to upgrade your hardware to run it. It’s also not uncommon for businesses to create a recruitment role to handle hiring and training demands to ensure they get the most qualified talent available in their industry. In addition, a recruitment role will enable smoother onboarding and reduce turnover.

Scale Vs. Growth: Do You Need to Move Operations?

Finally, when comparing scale versus growth, keep in mind that while growth will allow you more time to create an expansion plan, scaling may not. If your goal is to rocket to the top of your industry and be the number one source for your services or products, will your physical location be sufficient?

If not, you will have to decide if you want to lease, buy, build, or expand your facilities. You should base this decision on your goals for the geographical area you’re in or want to move to and the financial implications that will impact your revenue.

Vinod Janapala
Vinod Janapala - Product (SaaS) Marketing & Customer Analytics Lead. Vinod is keen on such topics as Marketing, Customer Experience, SaaS Challenges, and Personal Growth.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here