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Scalable, Sustainable and Profitable Business Growth in SMEs

GK
Nov 2010

In my previous article, I elaborated on what the business growth is. I took an example of Ramesh Patil, a micro level entrepreneur from Belgaum in Karnataka who runs a photography and videography business. We analysed the meaning of business growth and its importance with the example of Ramesh Patil business who had very limited approaches to business growth. We discussed the areas of the business growth and I gave the assignments with which you may define the growth of your business as well.

In this article, we will discuss scalable, sustainable and profitable business growth so that the growth of your business could be effective. In other words, the business growth is effective, provided it is Scalable, Sustainable and Profitable.

Scalability of Business Growth

If a micro-level entrepreneur is able to increase his/her business by duplicating his/her product/services without affecting the quality of the product/ service is called scalability. Scalability helps micro-level entrepreneurs to increase turnover first, and profitability next.

The entrepreneur must look at scaling up the business, only when the existing business unit becomes sustainable. But he or she must avoid making huge investments in new outlets may be too much of a risk for a micro-level Entrepreneur.

Analysis of Ramesh Patil's Case Study (Service Business):

Let again take the case study of Ramesh Patil is a micro level entrepreneur from Belgaum in Karnataka. He runs a photography and videography business with the name of OM Shiva Videos. Details of turnover for the last 3 years are as under:

Scalability factors for Ramesh Patil's business

Can Ramesh Patil create more number of Videography and Photography businesses providing the same quality of service to his customers?

∙ If the answer to the above question is “Yes”, it is called a “Scalable Business”.

∙ If the answer to the above question is “No”, it is called a “Non-Scalable Business”.

∙ In this case Ramesh Patil can create more number of outlets. Hence this is a Scalable Business.

Challenges in Scalability in Service Business

∙ When you scale up the business you need to ensure that the quality of the service remains the same in all outlets.

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