Scalability is a term often used, but rarely understood. It can help you keep ahead of the competition and decrease stress, but learning how to do it right isn’t easy…
Many small business owners say that “scalability” is their first priority, but many don’t realize what’s involved in the process.
It’s an industry buzzword – every business wants to be “scalable”.
But what does that mean?
Contrary to popular belief, scalability is not just about rapid growth. That may be why it’s so popular, but success isn’t just about how big a company grows. It’s also about how long a business survives in the industry. Scalability is crucial for small businesses in the IT sector – to not merely grow, but survive.
What Is Scalability?
First, let’s start with defining a vague term like scalability.
Scalability is the ability to adapt to changes over time and grow in the most efficient way possible. An industry changes all the time, and to have long-term success, you need the necessary framework to accommodate those changes.
It’s about making necessary decisions to readjust quickly as needed.
Efficiency also plays a major role in scalability. When you can scale properly, you can hire technicians as needed to ensure efficiency and productivity. And all this happens while ensuring that most of your profit stays in your business.
What if you have a client who wants to sign a deal tomorrow?
If your business is scalable, you can quickly become what your clients expect you to be. This is only possible if you have the proper scalable system in place. A scalable system allows you to depend on your team. You can step away without worrying that your business might go under.
However, scalability doesn’t mean you neglect the human aspect of the system. Often communicate with your team members to check in and ensure they execute tasks correctly.
Relying on teammates in a scalable system is key, but it’s also your job to ensure they have sufficient training to do their job.
Why Is Scalability Crucial for Your MSP?
What would be the most frustrating issues if your business volume doubled overnight?
Close your eyes and envision your business at double capacity right now. Are you ready for it? Many businesses fail because they don’t adapt quickly enough. Your future planning must go beyond customer numbers.
Market demands are ever-changing. MSPs are offering more and more services, while still attempting to maintain quality service. To keep up with these changes, you need to create a framework that allows you to adapt to your customers’ growing needs. Simultaneously, you need to accommodate a growing client base without interruptions in the quality of your product or service.
Alternatively, you need to delegate the work if something happens and you’re unable to do it yourself. Life is unpredictable, and you may find yourself away from work more than you intended.
Having scalability in your company ensures you can delegate to your team if need arises.
This situation happened to me a while ago. I had some personal things to take care of, so I had to temporarily shift my priorities.
Unfortunately, that meant I went from working 40–60 hours a week to only working 6 hours a week.
It was like this for a couple of months, but I trusted my team members to do their job even when I wasn’t available.
I was only able to do this because my business is scalable and could adapt to these changes. But attaining scalability is not an overnight process. You need time to implement changes in the necessary areas.
Some businesses may also have to contend with additional costs. For example, size limitations may be a barrier to setting up and buying new infrastructure. That takes time to assemble and acquire, so you need to plan ahead.
In the end, the benefits of scaling your business outweigh the potential difficulties along the way. Here are a few benefits for scaling your Technology Business:
- Prevents Your Business from Failing
You go into business to succeed. Failure is the last thing you want. Yet it happens to many businesses because they grow too quickly when they aren’t prepared for it.
Scaling requires time to set up. You’ll add infrastructure or increase the size of operations in your business. Some businesses also have to change their management processes and teams when they scale. These are challenging things to modify by themselves, but they’re nearly impossible in a time crunch.
- Helps Protect Your Market Share
Scalability is also essential if you want to keep your market share. It’s not necessarily your client numbers that keep you on top. Rather, it’s the flexibility to adapt to ever-changing market conditions.
Your competitors are watching how you react to change. If you can’t keep up, sooner or later your competitors will take advantage of it.
- Lets You Use Available Resources Efficiently
As a small business, you have a certain amount of resources available to you. So when your client numbers increase, you need to make sure you’re proficient with what you have.
Streamlining your processes can help. Not only will you handle service requests from your existing client base, you’ll use what you have at a higher efficiency.
But if you don’t have efficient processes, your clients may feel neglected. This may lead to higher churn rates and utter frustration.
Scalability can also refer to the adaptability of your computer and business systems. You want to ensure your systems and processes have the proper framework to grow with your client base and your needs. And a part of doing that is making sure you use your available resources wisely.
- Helps Maintain Margins Amidst Pricing Pressure
Pricing is a big deal in the MSP world. The market is increasingly competitive. Many businesses feel forced to offer more solutions to stay on top.
Using a scalable framework can help maintain your profit margins. Even when everyone else feels pricing pressure.
Remember how scalability allows you to use resources efficiently? This is what helps your business maintain margins during pricing pressure.
Keep in mind, though, that pricing pressure is going down. MSPs are starting to realize that their old business models aren’t working. Many businesses are having to find balanced solutions for pricing and profitability. With a scalable your business, you’re already ahead of the competition.
- Contributes to Competitiveness, Efficiency, Reputation, and Quality
Scalability helps you prepare to handle more clients and meet their various requirements. But it also adds other benefits to your business.
Scalability has a synergistic relationship with all those benefits. It means your processes are more efficient, so you can cater to your clients’ needs and adapt quickly to changes. If you aren’t efficient with your resources, your business can fail quickly.
Likewise, when you meet client expectations and demands, you develop a positive reputation. People know that you deliver quality service, and they’re quick to recommend you to their associates.
All these positive attributes, in turn, help you stay competitive in a saturated market. Where other businesses may struggle to deliver a quality service, you can do it with ease because you’re scalable. Each customer feels like you’re giving them the proper attention, which can give you a competitive edge.
Grow and Adapt with Scalability
Scalability is important in any business. Your business needs to adapt to changing market demands and accommodate a growing client base. It’s especially crucial for small IT businesses to survive in a competitive market.
How much is the right amount of scalability?
Many business owners believe they need to scale in all areas, but that’s rarely the case. It is a good idea to make as many areas scalable as possible. However, you may encounter problems that make this a time-consuming and costly endeavor.
Take a look at your organization now. How much time do you need to increase the size of your operations and infrastructure? How about modifying your management processes?
Scaling your business is not a simple process. But if you take the time to identify potential issues, you can devise a plan to work around them. And there are certain strategies that can guide you around common roadblocks along the way.