We’ve talked before about the need to build your company out so that you’re doing more earning, and less working. One of the most important factors to consider when choosing a business venture that will quickly get you where you want to be is the notion of scalability.
Originally an electronics term, scalability is the capacity of a system to handle increased traffic – to “scale up,” so to speak. It’s easy to see how the term came to be applied to business as well. And what an important term it is! In a business context, scalability defines how rapidly your organization can handle increases in business. Since a very large part of what you’re trying to do is grow your business, this is obviously an important metric. If you’ve got a stellar business that everyone loves, but it can’t scale up very rapidly or to a very large capacity, then you’re setting yourself up to get trapped at your peak income quite early.
There’s nothing wrong with that, if that’s what you want. If you’re a gourmet chef and you want to personally serve the very finest food you can possibly personally make to ten people a day, no more, then your business isn’t very scalable – but that’s fine. You’re meeting your goals, and typically gourmet chefs who are good enough to make a living at such a task can command appropriately high prices. That can certainly give you a decent living working a full day every day.
Let’s face it, however – most of us don’t want to work hard every day for limited income. We want to get to the point where we have our money working for us. That means seeking out business opportunities that allow us to scale up quickly. You don’t think I made my money by climbing the corporate ladder, do you? Increasingly, that’s not even possible in the Age of PIE. CEOs get shuffled around between companies (whether they do well or not) and lower level workers are laid off, not promoted.
That’s where scalability comes in. Focus on growing your business as quickly as possible. Always be eyeing expansion opportunities. The faster you grow, the more work you’ll have to spread around – and the more you can focus on managing and letting others take over the rest of the tasks. Eventually, you’ll have an income that isn’t dependent on your labour. And that’s where we all want to be.