Scaling your Business – Part 1
- blog31 May 2020
A business must keep growing year after year because maintaining status-quo will actually shrink the business. Growing is adding revenue while you are adding costs and scaling is growing revenue faster than your costs. Every business deserves to be scaled, and founders owe it to themselves, their employees, stakeholders, and their customers.
As part of CorporateConnections Learning & Development initiatives, we organize regular workshops and talks on topics that help our members to grow personally and professionally. We are always looking out for subject-matter experts, gurus, mentors, and trainers who have a valuable lesson to share.
We recently conducted a webinar titled Scaling Your Business. I present to you a 2-part article outlining my take-aways from this very interesting and informative webinar. This is the first part, you may access the second part of the article here.
Aseem Datar, is known to me socially, and I know that he is a whizkid at Microsoft, so when I requested him to suggest a topic for our Learning & Development series, he proposed to talk about scaling businesses. Aseem appeared too young to master a subject that is a matter of so many books, but when he presented the 90-minute webinar, there was no doubt in my mind that for his age, he has really scaled himself to greater heights.
Aseem is the General Manager, for Microsoft Cloud, which is one of the fastest-growing business in the Microsoft empire. His achievements are a testimony to his mastery on the subject of Scaling Businesses.
His very first slide set the agenda for the webinar. Visualize to realize.
Scaling a business is about achieving an ambition. Without a vision of where you want to take your company, is like setting out on a journey without a destination. Get a vision that is large enough to rally your efforts and resources.
Scaling a business begins with a vision and then requires a framework that helps to achieve it. The framework shared by Aseem has six components:
- Investing in ROI
- Customer Delight
- Technology Enablement
- Culture & Team
Allow me to cover three of the topics in this part.
Scaling begins by securing the fundamentals, and these consist of
- Market Dynamics
- Customers & Sales
- Product & Business
- Financial Outlook
Market Dynamics in terms of understanding the target markets, their size, and whether you are gaining or losing share. The movement of the market and what is the endgame.
Customers & Sales to understand the unique value you are adding and why would customers come to you and not your competitors. Are your sales efforts in the right direction, what are your salespeople not doing what others are?
Product & Business determines your product and service mix. What is the customer buying, what can you improve marginally to make a maximal impact? Is your customer feedback loop working? Are you building the future at an accelerated pace?
Financial Outlook to determine your Customer Acquisition Cost, and what ROI is your customer expecting and how you can keep bettering it. What is the true cost of your recurring revenue, your YoY gross margin growth? Do you need new investment to bring savings forward?
INVEST IN ROI
Investments are necessary to scale, but investments have to be done judiciously by outcomes and timing. The investment must increase long term competitive advantage and must help drive efficiencies. It must result in positive Net Present Values (NPV). The investment must help to multiply revenue so that the cost of investment pays for itself.
Investment horizons play an important factor in determining the phases for which you must make investments now. Invest in streamlining the present, next look at developments that are in the market but have not achieved scale, and finally look at investments you need to make for unproven technology that holds the promise of tomorrow.
In the next part of my article, to be posted later, I will discuss the next three parts of the framework, namely,
- Customer Delight
- Measurement & KPIs
- Culture & Team
I hope you found this summary useful and it adds fuel to the fire for Scaling your business. Look forward to comments, remarks and your own input on what works or does not for you. Read part 2 of the article here.