How start-ups can quickly become ready to scale


An investor's dream is to put money toward a start-up that is scalable. But what does that mean for New Jersey business owners? It means that the business has the potential to grow exponentially with very little investment and effort. This requires a proven business model. How do entrepreneurs go about making start-ups scalable? Keeping a few issues in mind may prove beneficial in the long-run.

Business owners should start with an idea that can be easily replicated. This means focusing on a product and not a service. A product, such as computer software, can be made in abundance without too much extra cost. Services, on the other hand, require people (preferably experts) to deliver them, which can get expensive quickly.

They should also focus on a business plan that's attractive to investors, not just to customers. Investors don't want to see a long list of free services that a business is going to provide-- they want to see how they are going to make money. Entrepreneurs need to be able to show high margins and minimum costs (including the most costly expense - staffing).

In order for a business to be scalable, it needs to reduce costs by using outside resources. Some business owners want to do everything themselves, which slows down the progress of the company. It can also be costly to try to learn everything.

There are many options for an entrepreneur looking to obtain funding for his or her start-up. By proving that the business is created properly, is solid and poised for future growth, an entrepreneur can make a business attractive to investors and other sources of funding.

Source: Forbes, " 10 Tips For Building The Most Scalable Startup," Martin Zwilling, Sept. 6, 2013