You may have heard the terms “growth” and “scaling” used by business owners, but do you know what they mean? The difference between growth and scaling can be confusing, so let’s break down how both play out in your business.

What is the difference between business growth and scaling?

Growth is the process of adding resources/avenues that generate income to increase your income. You start with a small business, but you add more resources to it over time as it grows.

Scaling is the process of using existing resources in your business to produce more income. As a part of business growth, you must invest in more resources. 

The most common type of resource is hiring people to help with the workload or investing in additional tech. Or you can diversify your offers by expanding your offer suite and taking advantage of a different part of the market. Whatever you decide is necessary for growth, it will cost money—and time.

Scaling is using the same resources to produce more income.

Scaling your business is a way to increase income without adding more resources. You may scale by increasing the number of customers or clients (more marketing & sales), or by increasing the amount they spend with you (offer stacking or increasing pricing).

In other words, scaling is simply a way to make more money using the same resources. It may sound like you are working more when scaling but that is not the case. You can put together new systems to automate tasks or create offers that allow you to serve more people at the same time without increasing your time commitment. 

Scaling might sound like the perfect solution to increase income without the risk of investment but scaling has pitfalls of its own.

As you scale eventually you will hit an income plateau where you aren’t able to earn more than a certain amount each year without adding additional resources into your business. Because at some point you will hit full capacity without the ability to take on more clients. 

Scaling can put a lot of pressure on the systems & structures of your business because you are increasing the need to produce exponentially more from the same resources that were once sufficient. And this can be a lot of pressure, especially if you don’t have systems in place to handle those needs. So it’s important to understand the difference between scaling & growth and how they both fit into your business model.

Growth is often avoided in favor of scaling due to the financial investment with a slower return.

With growth, you are taking the profit from the business & reinvesting to grow your business with added resources (i.e. tech or team members). Oftentimes, it takes some time to see the results of the fruits of that labor as you increase sales & integrate the new resources into your operations. 

But if you’re planning on taking your business to the next level, it’s important to consider both growth & scaling and how they fit into your business model. Because growth will benefit your business in the long run while you will get short-term gains from scaling. 

How can you best balance growth and scaling in order to maximize the benefits for your business?

Instead of scaling your business by simply adding more customers and revenue, what if you could also scale it while participating in growth-focused activities, such as: 

• investing in developing automation & tech systems for increased efficiency to bring on more clients
• adding additional diversified offers into your offer suite that are fulfilled by additional expert team members
• investing in a training program for internal team members to bring them up to speed and involved in service delivery sooner

In these instances, you are adding resourcing into your business while also focusing on utilizing them to increase income & maximize their earning potential. The result is that you will have more people working for you, which means you can provide more value to more clients, who in turn will give you more money. 

Eventually, you reach a point where you are tired of growing your business & adding resourcing. And that would be the time to focus purely on scaling and maximizing the resources you have added to the business. 

To grow your business, focus on making incremental improvements instead of trying to scale as fast as possible. It is important to remember that growth is a continuous process, and there are many different ways to grow your business. You can focus on building your team, improving the quality of your services & products, and even expanding into new markets. But whatever you do, make sure that each decision you make will result in more money coming in than going out. You will be able to take the business from where it is currently and make small adjustments that add up over time. This will help you figure out what works best for your business & how to leverage those resources over time.