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What is Scalability and Why is it Crucial to Your MSP Business Survival and Success?

ConnectWise Consulting | Accounting | Marketing

Scalability is a term that’s often used, but rarely understood. It can help you keep ahead of the competition and decrease stress, but learning how to do it right isn’t easy…   

Many small business owners say that “scalability” is their first priority, but a surprising number of them don’t realize what’s involved in the process. 

It’s an industry buzzword – every business wants to be “scalable.”

But what does that really mean?

Contrary to popular belief, scalability is not just about rapid growth. That may be why it’s so popular, but success isn’t just about how big a company grows. It’s also about how long a business survives in the industry. Scalability is crucial for small businesses in the IT sector – to not just grow, but survive.

Find out what scalability really entails and how it can benefit your small business.

What Is Scalability?

First, let’s start with defining a vague term like scalability. Many people associate it with rapid growth, but that’s not all there is to it. 

In reality, it’s the ability to adapt to changes over time and to grow in the most efficient way possible. An industry changes all the time, and to have long-term success, you need to have the necessary framework to accommodate those changes. It’s about making necessary decisions to readjust quickly as needed.

Efficiency also plays a major role in scalability. When you’re able to scale properly, you have the ability to hire technicians as needed to ensure efficiency and productivity. And all of this happens while ensuring that the majority of your profit stays in your business.

What if you have a client that wants to sign a deal tomorrow?

If your business is scalable, you have the ability to quickly become what your clients expect you to be. This is only possible, though, if you have the proper scalable system in place. A scalable system allows you to depend on your team. You can step away without worrying that your business might go under.

However, scalability doesn’t mean that you neglect the human aspect of the system. Communicate with your team members often to check in and make sure they execute tasks correctly. Relying on teammates in a scalable system is key, but it’s also your job to make sure they have sufficient training to do their job.

Why Is Scalability Crucial for Your MSP?

What would be the most frustrating issues if your business volume were to double overnight?

Close your eyes and envision your business at double capacity right now. Are you ready for it? Many businesses fail because they don’t adapt quickly enough. And your planning for the future has to go beyond customer numbers.

Market demands are ever-changing. MSPs are offering more and more services, while still trying to maintain quality service. To keep up with these changes, you need to create a framework that allows you to adapt to your customers’ growing needs. At the same time, you need to accommodate a growing client base without interruptions in the quality of your product or service.

Alternatively, you need to delegate the work if something happens and you’re unable to do it yourself. Life is unpredictable and you may find yourself away from work more than you intended. Having scalability in your company ensures that you can delegate to your team if the need arises.

This situation happened to me a while ago. I had some personal things to take care of, so I had to shift my priorities temporarily. Unfortunately, that meant I went from working 40–60 hours a week to only working 6 hours a week total. It was like this for a couple of months, but I trusted my team members to do their job even when I wasn’t available.

I was only able to do this because my business is scalable and could adapt to these changes.

But attaining scalability is not an overnight process. You need time to implement changes in the necessary areas. 

Some businesses may have to contend with additional costs, too. For example, size limitations may be a barrier to setting up and buying new infrastructure. That takes time to assemble and acquire, so you need to plan ahead.

In the end, the benefits of scaling your business outweigh the potential difficulties along the way. Here are a few benefits for scaling your small business in the IT sector: 

1.  Prevents Your Business from Failing

You go into business to succeed. Failure is the last thing you want. Yet it happens to many businesses because they grow too quickly when they aren’t prepared for it.

Scaling requires time to set up. You’ll be adding infrastructure or increasing the size of operations in your business. Some businesses also have to change the nature of their management processes and teams when they scale. These are challenging things to modify by themselves, but they’re nearly impossible in a time crunch.

2. Keeps Your Market Share

Scalability is also essential if you want to keep your market share. It’s not necessarily your client numbers that keep you on top. Rather, it’s the flexibility to adapt to ever-changing market conditions.

Your competitors are watching how you react to change. If you can’t keep up, sooner or later your competitors will take advantage of it.

3. Lets You Use Available Resources Efficiently

As a small business, you have a certain amount of resources available to you. So when your client numbers increase, you need to make sure that you’re very efficient with what you have. 

Streamlining your processes can help with that. Not only will you be able to handle service requests from your existing client base, you’ll use what you have at a higher efficiency.

But if you don’t have efficient processes in place, your clients may feel neglected. This may result in higher churn rates and utter frustration. 

Scalability can also refer to the adaptability of your computer and business systems. You want to make sure your systems and processes have the proper framework to grow with your client base and your needs. And a part of doing that is making sure you use your available resources wisely.

4. Helps Maintain Margins Amidst Pricing Pressure

Pricing is a big deal in the MSP world. The market is increasingly competitive. Many businesses feel forced to offer more solutions to stay on top. 

Using a scalable framework can help maintain your profit margins. Even when everyone else feels pricing pressure.

Remember how scalability allows you to use resources efficiently? This is what helps your business maintain margins during pricing pressure.

Keep in mind, though, that pricing pressure is going down. MSPs are starting to realize that their old business models aren’t working. Many businesses are having to find balanced solutions for pricing and profitability. With a scalable your business, you’re already ahead of the competition.

5. Contributes to Competitiveness, Efficiency, Reputation, and Quality

Scalability helps you prepare to handle more clients and meet their various requirements. But it also adds other benefits to your business.

Scalability has a synergistic relationship with all of those benefits. It means your processes are more efficient, so you can cater to your clients’ needs and adapt quickly to changes. If you aren’t efficient with your resources, your business can fail rather quickly.

Likewise, when you meet client expectations and demands, you develop a positive reputation. People know that you deliver quality service and they’re quick to recommend you to their associates.

All of these positive attributes, in turn, help you stay competitive in a saturated market. Where other businesses may struggle to deliver a quality service, you can do it with ease because you’re scalable. Each customer feels like you’re giving them the proper amount of attention, which can give you a competitive edge.

Grow and Adapt with Scalability

Scalability is important in any business. Your business needs to adapt to changing market demands and accommodate a growing client base. It’s especially crucial for small IT businesses to survive in a competitive market.  

How much is the right amount of scalability?

Many business owners believe they need to scale in all areas, but that’s rarely the case. It is a good idea to make as many areas scalable as possible. However, you may encounter problems that make this a time-consuming and costly endeavor.

Take a look at your organization now. How much time do you need to increase the size of your operations and infrastructure? How about modifying your management processes?

Scaling your business is not a simple process. But if you take the time to identify potential issues, you can devise a plan to work around them. And there are certain strategies that can guide you around common roadblocks along the way.

P.S. whenever you’re ready, here are 3 ways I can help you help grow and scale your IT & MSP business:

Join our community of ConnectWise users and industry experts here: www.cwboss.com

It’s the easiest way to plan ahead for growth, learn helpful tips and join weekly educational workshops.

Learn how to be the #CWBOSS of your business by joining our weekly workshops here: https://bit.ly/2XmaM6O  

Every Thursday our CEO & President, Adam Bielanski, hosts a 30-minute workshop around making ConnectWise work for your business

Work with me and my team privately: If you’d like to work directly with Adam and the team to actually get you out of the weeds and into your flow, schedule a 15-minute Triage call here: https://calendly.com/adambielanski/15min