What is Scaling a Business?

Scaling is often confused with growth, and the critical difference is that scaling results in a more dramatic increase in revenue with an incremental increase in costs. Growth adds resources commensurate to revenue increases. So to truly scale, you need to increase revenue faster than your costs, so your gains outpace your losses. Think of a SaaS company that, by design, removes certain operational limits that a professional service business would face with rapid growth. To scale properly, you must have a foundational plan and the infrastructure to support rapid growth. Your people, tech, data, procurement, provision, QA, etc., must be ready for the task. When scaling, we monitor CAC, CAC ratios, LTV, NPS, and certain P&Ls. If these acronyms aren’t on your radar, you must first lay some groundwork.