What Is Scaling in Business and How Is It Different Than Business Growth?

Let’s begin with the most common distinction between these two terms. In general, we think of growth means adding new resources and revenue increases as result. Scaling means revenue increases without adding new resources. But the thing is profit in Growth increases with decreasing rate because the company revenue increases with new sales representative and it comes with salary so the net is effect is minimal. However in scaling revenue increases with a minimal cost and therefore the major change is seen in profits.
And understanding the difference can mean the difference between more profit with less work, versus less profit with more work.
A great example of a company that’s successfully figured out how to scale is Google, which in recent years has been adding customers (either paying business clients or ad-supported free users), while being able to keep costs at a minimum. As of 2017 it had seven products with over a billion active users each, while only employing about 88,000 people.
Tie-up of Restaurants with food delivery partners increase more of revenue with just listing cost on their apps and leads to increase in profits.
We can also understand Growth of business by Diminishing marginal Return
If you keep increasing revenue by just adding more and more resources can lead to increase in cost also. And after a certain point your revenue will increase but at very decreasing rate and can even go to negative that growth isn’t a financial gain. Increasing the efficiency to make optimal use of existing asset to increase optimal revenue can lead to a large amount of profits.
Scaling in Business Comes Naturally to SaaS Companies
While all companies can potentially be good at growing, some companies are better positioned to scale than others. A software company are natural at scaling as they can reach more costumer and increase their revenue within a minimal or no cost
Scaling in Saas companies comes with customer acquisition cost(CAC), Adding a new customer comes with minimal cost but it comes with acquisition cost. In saas companies acquisition cost are marginal cost. They often sell technical products to niche customer therefore to reach new potential buyers they need to spend on marketing to acquire new users. Higher customer lifetime value and higher CAC allows companies to scale them up.
Each strategy should start with the uniqueness your business brings to the market. The strategy to differentiate your brand from the competitors cannot happen without strong internal process of your company.