What is Business building? It is a proxy for the lost art of selling. It requires a person with a high level of drive and sales instincts. And it is expensive. In addition to its lack of scale, it is also a poor choice for small business owners. Read on to learn more about this lost art of selling. Posted in Entrepreneurship, Small Business, Small Businesses: What is Business Building?, by Michael A. Schwartz
It fails to scale
In business, scaling refers to the ability to expand the amount of work you do without affecting your capacity. Without scaling, a business can become confused and lose customers. Scalability is a necessary characteristic, but it is not the only attribute of scalability. In fact, there are some circumstances when scaling may not be possible. Natural business cycle peaks, recession, or even fundamental changes in an industry can lead to scaling issues. Understanding when to change tactic is essential for scalability.
Premature scaling is a common problem and accounts for about 70 percent of startup failures. Many startups scale too quickly and end up losing money by hiring new employees and spending a lot of money on acquisition. They often do this because they do not know what they're doing. The product, the customer, and even the sales process, are not fully understood when scaling, and so they spend money on marketing and advertising without knowing whether it works. To avoid scaling prematurely, you need to have reliable data on how much it costs to acquire customers. Once you've got an established track record, you can invest more money in your product.
To scale a business, it is essential to hit a baseline of competency in all practices and dimensions. A failure in one of these areas will cripple your efforts. For example, if you're trying to scale a media company, you have to hire staff to help you with your growing workload. If you're looking to grow your business, diversification is an excellent strategy. By diversifying your business, you will increase your profits.