if you ever watch dragons den they will reject investing in a business if it is not scaleable. But what does that mean? It means that you find a process that works for selling your products or services in an efficient, profitable manner and repeat it and expand it.
For products, take the ipad for example… it is designed in California but is manufactured and assembled in Asia at a minimum cost and then transported around the world for different markets. The focus of Apple is to market the product ( by selling the why people should need it and creating a buzz so people lined up around the block to be the first to get their hands on it). The same process of anticipation and excess demand is replicated in different markets.
It is easy to see how Mcdonalds hamburgers were scaleable… by setting up new franchises that repeated the pattern, adhered to some very strict guidelines about menus, ingredients etc and sharing the marketing and administration costs. Of course Macdonalds does not make money from selling hamburgers as most of the outlets are franchised. They make money by holding real estate which is rented out to franchisees ( and they choose prime locations to allow for maximum trade) and from franchise fees.
With services, such as a therapy business it is more tricky to see how it can be scaled. The problem with an individual who is trading time for money is that they can only earn a certain amount of money in a week because there are only so many hours. How do you make that scaleable?
- sell other products and services and derive other forms of income to supplement the business.
- take on additional staff. Obviously the risk is that you ned to ensure that they re fully occupied as they will demand to be paid whether they are working or not.
- Replicate a successful brand/ business by setting up other branches and training others to follow the ” successful recipe”.
So as a business you can leverage time. You can also leverage cash.. so you either get others to invest in your business or provide a loan that you can use to expand the successful formula.
Of course if something is very successful it will be copied by others trying to tap into the market.