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Not All Business Model Scale Equally

Updated: Dec 9, 2019

Every company has an inherent desire to grow whether Micro, Small, Medium and Large, but each kind of business has a different set of challenging advantages and disadvantages when it comes to achieving scale, however, every business has access to the core asset of marketing and the growth strategies to use to their advantage.

As I discussed in this article, scaling is all about efficiency and replication. But what allows one company to succeed over another? The answer starts and ends with how imaginatively it approaches the process of scaling and marketing abilities.

Not every business model is unique, hence you should not think that you should take one size=fit-all-business-model approach, and the most successful business tend to stand out above the average because they tend to think differently an how to get a competitive edge over their competitor by doing business differently.

The same idea applies when it comes to scaling a business model. Growth is not a "one-size-fits-all" business strategy because different industries require different approaches to overcome the challenge of reaching more customers while controlling costs without compromising customers' support by putting people first and not money over people to achieve profit.

When it comes to sustainable growth in business, the following milestones are great predictors of success.

  • Recurring Revenue

  • Revenue Diversity (many customers that generate smaller amounts of revenue)

  • Repeat Customers (subscription businesses)

  • Low Attrition

  • Repeatable Systemic Offerings to Your Customer

  • Differentiation (product or service that generate higher amounts of revenue)

Looking at both product - and service-oriented businesses, let's look at the tactics that can help you achieve the milestones above and let you judge for yourself: when it comes to scaling efficiently, are all businesses created equal?

Services vs. Products: Defining the Way You Scale

Two companies with different business models do not deal with cost and revenue in the same way, as if your company is service base and the other company is product base the cost and revenue will be totally different as the strategies involved will be different and cost of production and manufacturing will apply to product base company and service company do not occur manufacturing or product production cost and pricing structure will automatically differ, location will differ and distribution will differ too.

A service company that incurs the majority of its production costs (IE: paying a company to build the software or website for you) early on in the product development stage is never going to scale in the same way as a company which offers a product where the production and manufacturing cost remains inconsistent over time.

A digital consulting firm business model using the internet to provide digital services hence a digital company is service base, the cost and revenue will differ greatly, as a digital company does not incur manufacturing or production cost but occurs mainly operating costs where the operating cost remains fairly constant over time.

The 7 Habits of Highly Effective People

I summarised the video for you so you begin to understand to apply it to your business

1. be proactive.

2. begin with the end in mind.

3. put the first thing first.

4. think win-win.

5. seek first to understand then to be understood.

6. synergize.

7. sharpen the saw.

Scaling your Business Model

Each one is different, so you should begin developing your scaling strategy based on that one rudimentary distinction: is your business more service - or product-oriented? It a well-known fact that product-orientated businesses have in common is that they're inherently more scalable than even the best of the best service companies.

If you're running a service-oriented company using the internet as your main option. Your option for scaling and growth is limited to automation when it comes to scalable growth often refer as passive income or making money while sleeping.

Service businesses can often be complex and people-oriented in a sense due to the nature of the Service business which relies on internet usage to provide services and other services companies to provide the tools needed to provide their services. making it harder to eliminate options and increase automation.

The work these businesses do usually become increasingly a commodity over time, often to the point that the company can't keep up -- as soon as the advantages that come with offering a bespoke service disappears, they struggle to keep their margins wide enough if they do not diversified. It is not to say that these businesses cannot be diversified to keep their advantage and widen their margin by offering related services.

Having said that, there are certain steps service-oriented businesses can take to maximize efficiency and one of them is to also have an offline-business-service, as having both media can increase efficiency and scalability.

In comparison to the scalability of a product-oriented business, service companies can appear to start off at a disadvantage due to the ease of product-oriented business distribution processes which can be executed offline and online as they can benefit from the three distribution processes available, however this disadvantage is minimized as social medias platform allows two distributions processes to take place online mainly selective and exclusive distribution.

It's not impossible for Services Companies to scale greatly

That said, the natural ability to scale doesn't shield product-oriented businesses from their own set of challenges. For them, the problem isn't so much dealing with the cost of running the business once the product exists.

The hardest part is the product development and the costs associated with it, coupled with the risk of market acceptance, as if the product suck and it not beneficial to the customers or does not answer demand and need your products will go to the scrap heap really fast or accepted a few years down the line as mood changes and you suddenly become hip and fab.

A good example of this is the Bratz doll back in 1997 - 2000 which was the doll to get for your kids and they quickly went out of fashion and the product life span 3 years. Even if they still have a website and sold on E-bay or Amazon the product lost is notoriety and is not well known by the kids of today.

In other words, there's no real way of knowing whether or not the product you're investing in is going to succeed and offer any kind of substantial return. However, you could always create another life-changing invention that the world can use.

So while product-oriented companies might be able to employ simpler scaling strategies, the disadvantage for service businesses is by no means insurmountable. The brilliance of Netflix, for instance, was to offer a video streaming service through a business model that's primarily product-oriented, taping in the film industry and streaming movies to watch over the internet and now moving toward making their own movies to watch over the internet. It has gain so much popularity that Blockbuster product base business giant in video rental vanished and became bankrupt.

It's true that service-oriented businesses are inherently less scalable, but that doesn't mean they can't achieve all the milestones girlfridayz mentioned earlier -- it just means it'll take more creativity to do it and using all facilities and tools the internet has to offer as you have the possibility to scale your business either ways a wider reach or smaller reach and even international reach are easier as you can see with Netflix which operate in various countries and gained popularity hence notoriety and achieved business retention worldwide.

Considering a Hybrid Approach could be an answer

Any service-oriented business trying to scale is taking a serious risk, but there's also a lot of up-front uncertainty in building up a product-oriented company, which can put you in debt with investors if all fail but get you great financial rewards if successful.

Some companies have had successes bringing the best of both worlds together -- by leveraging a "solutions"-based model to incorporate both products and services into what they ultimately offer their customers example Netflix will fit this business model.

While it is challenging in its own right, this business model can hedge on cash flow due to production and purchase cost requirements and also feeding into product development cycles through service experience.

It's worth considering if you want to raise less debt and equity early on when trying to scale your business.

In conclusion, starting up or scaling up your existing business comes with its challenges and reward over time. Whichever approach is chosen product base, service base or hybrid has its sets of difficulties and rewards within its product development cycles through product and services experience.

Girlfridayz social sales growth strategies program is for both business model either product-based or service base business model the long-term strategies taught are the best for achieving growth, sales and scale your business using what the internet has to offer to your advantages and build good habit to implement in your business as overtime you will learn to scale your business either to a wider reach or smaller reach and achieve revenue.

The training program takes 1 day from your busy schedule to attend this amazing program and come away with multiple sales enabling strategies to build into your business on the 27th January 2020 from 10 am to 16pm. Girlfridayz wants every UK business to attend that why we have a Christmas present for your business in the form of a coupon name Christmas Present with the following coupon code CPSB2019. Enter this coupon code at checkout and your 50% discount will be applied automatically.

So hurry not to miss out on this amazing program which provides value to your business and a low-cost solution to your business too. For only £600 a worthy investment for life and the lifespan of your business if apply on a regular the investment made to attend will gives you 100% of return on your investment if you really want to scale your business, achieve recurring sales, customers acquisition and ROI.

The Social Sales Growth Strategy program is a real-time live training educational program - acquire digital skills much needed in this day and age as the way we conduct business has greatly changed and you must embrace these changes if one wants to survive and sustain their business through times.

Requirement to participate

Google Account

Skype connection

Facebook Business Page

Money to invest in the program

An ability to scale

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