Starting a business is a big achievement. Seeing the business through to some sort of stability is a blessing. Taking that business to the next level, growing its size and scale of operations, is the dream. Businesses grow through finding new customers and/or making customers pay more for their products it’s really that simple. Well leave the productivity talk for another day and focus on how one can scale their business in Zimbabwe.
Yes, scaling is the growth in customer base but there’s a bit of nuance to it. The term scalability refers to how easy it is for your business to scale. Major factors to consider here are the finances, the technology to scale, the size of the market and the team or partners. Scalability is best achievable when the costs an additional customer brings are minimal or none. If this is not the case the financial burden of catering for new customers can cripple the business. Of course, these new customers must exist, without these customers, there is no scaling. Financial resources are not the only resources involved though, you will also need to consider the additional employees or partners needed to serve the market.
Technology is one of those words everybody knows but very few people can define or explain. They can point to examples of it. I prefer simple things, so the definition of technology I like to use is a method or tool to consistently produce a result. I stress this because while I accept that things like the Internet and computers are technology they are not the first or last iterations of technology. Scaling almost always depends on some sort of technology to improve your reach. Where you would normally get examples of Internet-based services I would rather we think about the mobile recharge card industry. Through encouraging vendors and decentralising the distribution of recharge cards they achieved true scale moving what could easily be millions of dollars per week. This system worked perfectly for the recharge card manufacturer because they made no additional investment in the vendors. This brings me to finances.
Scaling does come at a cost. Even in the example of recharge cards we have to look at the chain. Mobile Network Operators sell to wholesalers in bulk and they then sell on to individual vendors. Your $1 recharge card would be sold to the wholesaler at say 80 cents and the wholesaler sells this on to the vendor at 90 cents. So the cost of scaling, in this case, is inverted, through a discount on the product. The manufacturer could sell the recharge cards themself but the cost of investing in additional infrastructure and systems is heavy. The point is, scaling comes at a cost and is best done when the cost is minimal. If you dream of serving a million customers you need the finance to serve a million customers or be ready to take the hit as in our recharge card example.
Of course, there is no scaling without the customer and this is perhaps the trickiest part of the whole process. A lot will come down to the type of business you are doing. Are there enough customers to scale? Of course, there are many potential customers but are there enough customers to support your scaling ambitions? A quick look at our recharge card example will tell you that mobile phone users were and are even more widespread across the country. Distributing through vendors meant bringing recharge cards closer to the customers and therefore presented a win for them. So it’s not enough that the customer exists, they should be motivated towards your solution.
Employees and partners
The final piece of the puzzle to scaling is having the additional employees or partners to facilitate your expansion. A quick look at our recharge card example will tell you that this was fairly easy, all they required were people with time and a location to sell. It’s not always that easy but the same rules apply. Look at examples like Uber and Airbnb. Same principle except they needed people with vehicles and time or vacant accommodation. Sometimes it will involve additional employees to service these customers. Whichever the case, the availability of these suitable people and their motivation will be crucial to your ability to scale.
As you have seen through the example of the simple recharge card, scaling in Zimbabwe is achievable. Understanding the concepts behind scaling will help you adapt it to your business.