Personal MBA: Scale

Personal MBA: Scale

Every entrepreneur has the dream of building the small business they started in their garage into a multi-million dollar company. In order to make the dream a reality, an entrepreneur must overcome many obstacles and master several vital skills. One of these is the ability to scale your business. Scaling a business involves reliably duplicating or multiplying processes as volume increases. According to Kaufman, “the easier it is to duplicate or multiply the value provided the more scalable the business.”

Human involvement is the primary limiting factor for scalability. Humans don’t scale. They have a finite amount of time and energy each day. As a result, service-based businesses are typically much harder to scale as the quality of the value provided depends heavily on the skill and demeanor of each service provider. Product based companies are easier to scale. Value streams can be optimized, and as technology advances, productivity increases help to reduce the human factor. Kaufman ends this section with, “As a general rule, the less human involvement required to create and deliver value, the more scalable the business.

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