Scalable Business Models: Top Practices for Long-Term Growth

Many immigrants move to the US in search of new opportunities, including starting successful businesses that can grow, provide financial freedom, and support loved ones back home. But not all businesses are built to scale. At Remitly, we realize the potential of immigrant-owned businesses and support them by sharing practical tips on how to build a scalable business model that works.

Read on to learn why scalability matters, practical strategies for building a scalable business model, common challenges to expect, and real-life examples of businesses that got it right.

Understanding the importance of scalability in business

 A scalable business grows its customer base and revenue faster than it increases costs. That means more revenue and profits without a proportional rise in expenses like raw materials, labor, resources, or operational and administrative overheads. In short, scalability allows your business to grow efficiently, sustainably, and profitably.

Key elements of a scalable business model

Not all business models are scalable. To scale effectively, your business must be able to grow without a major increase in resources or effort. A scalable business typically has the following characteristics:

• Standardized processes for easy duplication across markets: For example, an online business that operates and delivers only in Washington can expand to California by complying with local laws and partnering with a courier company for deliveries.
• Automation and streamlined processes: Scalable businesses rely on efficient and automated systems that don’t require extra labor costs to handle growth. As in our example above, the store could scale by ensuring the website can handle more traffic and process orders automatically without hiring more staff.
• Adapt to new market opportunities and customer demands: Scalable technology like mobile applications helps to achieve this. A grocery store, for example, may add a shopping list feature to help customers plan their purchases before they are ready to order.
• Profitability at scale: A scalable business makes more profit than it costs to expand. If a new branch costs $10,000 USD a month to run but only makes $5,000 USD gross一total income before deducting expenses一then the venture isn’t scalable.

Differences between growing and scaling a business

Growth and scalability both lead to business expansion一but they aren’t the same thing. Growth is purely about getting bigger, while scalability is about performing better. A business can grow in size, but if it’s not built to scale, that growth may not be sustainable. 

In short, growth increases size; scaling increases efficiency and profits. Here’s how the two business strategies compare:

 

Growing a business	Scaling a business
Expands ‌market share, reach, and business size.	Improves systems to enhance sustainability, efficiency, and productivity.
Adds new products and services.	Retains the same products and services but streamlines processes.
Aims to increase revenue and market share, even if this means higher costs.	Aims to grow revenue without a significant rise in costs.
Achieved by acquiring competitors, opening new locations, or aggressive marketing.	Achieved through system optimization, automated technology, and employee involvement.
It may become unsustainable if costs rise faster than profits.	Focuses on long-term sustainability and profit margin as the business expands.

 

Strategies for developing a scalable business model

So, how do you build a scalable business?

• Identify and evaluate your revenue streams to pinpoint areas that need improvement and optimization. Focus on those with the potential to grow without significant cost increases.
• Use technology to automate processes. Leverage digital tools to streamline key tasks like sending quotes, processing invoices, managing finances, monitoring inventory, handling social media, and boosting overall productivity.
• Build a strong team and leadership structure, and invest in their growth. Free online business classes can be a great way to develop the skills you and your team need to scale effectively.
• Standardize your processes by documenting the methods and strategies you use to complete tasks. These should be easy to follow and repeatable, helping to increase efficiency as the business grows and simplifying training for new hires. For example, use a standard format for supply management.
• Find strategic partners who can support your business as it scales. If your business relies on making deliveries, partner with an affordable and efficient courier service that has positive reviews and can meet growing demand.
• Invest in quality control to ensure a consistent level of professionalism in all customer interactions. Maintaining high standards is key to sustainable growth.
• Manage your finances wisely. You may need capital to implement some strategies, like incorporating new technology. Make sure you have the resources in place and that any investments offer a solid return.
• Focus on effective marketing strategies. Strengthen your online presence and invest in affordable marketing channels that target your ideal customers. This helps grow your reach without overspending.

 

Step-by-step guide to designing a scalable system

So, how can entrepreneurs build a scalable system, step-by-step?

Designing and building a scalable business can feel overwhelming, especially when you’re starting out, as it involves technical and strategic considerations. To make the process easier, consider assembling a team of experienced business owners, consultants (including legal advisors), and experts in scalable business design.

The team can assess your current operations or business plan (if you’re still in the early stages), identify areas for improvement, and recommend practical strategies to help you scale successfully.

You’ll typically receive a brief detailing the areas to work on and the steps to implement. In general, look out for these key features:

• Business scope: Define what the system will look like and which areas it will cover. This may include human resources, sales and marketing, finance, legal, and customer support.
• Scalability of your business model: Assess how scalable your model is and determine your system needs, such as projected traffic and transaction volume.
• System cost: Evaluate how much it will cost to scale based on your goals. Decide whether you’ll implement everything at once or prioritise certain areas.
• Technology stack: Choose the right tools and platforms that can grow with your business, from cloud-based systems to automation and analytics software.
• System testing: Outline when and how testing will be done, who will be involved, and how you’ll measure performance and success.
• Long-term strategic plan: Ensure your system supports your long-term vision, including flexibility to adapt to future challenges.
• Operational challenges: Identify potential roadblocks and develop strategies to manage or avoid them as your business expands.

Common challenges when scaling a business and how to overcome them

Scaling a business is no small feat, but knowing what to expect and having the right strategies in place can help you overcome the hurdles. Let’s look at some common challenges and their solutions:

 

Challenge	Solution
Lack of money or poor cash flow	Track your income and evaluate revenue streams.  Manage your cash flow and identify areas of overspending. Raise funds through investors, loans, or grants.
Hiring and retaining talented people	Offer competitive salaries and benefits. Improve branding, reputation, and company culture. Create a positive environment that prioritizes work-life balance.
Maintaining or improving company culture	Standardize processes that ensure consistent communication of the company’s core values when hiring.  Create a culture handbook to outline the company vision, values, beliefs, and principles. Offer ongoing training on culture and best practices.
Adapting to market changes and demands	Keep up-to-date with industry trends and train your staff accordingly. Listen to your customers to understand their needs.
Scaling prematurely	Outsource services to specialists.  Hire a team of experts to analyze your business to determine the right timing for scaling.
Maintaining product quality	Invest in quality control systems to ensure consistency as you scale.
Ineffective communication	Streamline communication by investing in technology that supports seamless communication between management, employees, customers, and suppliers.
Scaling infrastructure	Consider cloud-based systems that scale efficiently with your business.
Keeping customers	Develop customer retention strategies like personalizing the customer journey and offering an excellent experience.

 

Examples of successful scalable business models

Successful scalable business models are built around three key elements: recurring income, technology, and automation. By embracing scalability, businesses can grow efficiently. Here are some examples:

 

Business Model	Description
E-commerce	Sell products online without the need for a physical store. Use technology to manage inventory, process orders, and receive customer feedback, all while reaching a global market. Focus on selling quality products and restocking to maintain business flow.
Freemium	Offer basic features for free and charge customers for access to premium features. You can also offer a limited money-back guarantee to let users test the full product before fully committing.
Subscription-based	Offer products or services on a recurring subscription model for a steady revenue stream.
Online education	Monetize your skills by creating online courses; this way people can learn from your expertise.
Software as a Service (SaaS)	Provide software solutions on a subscription basis to solve specific problems for customers.
Aggregator	Act as an intermediary to connect buyers and sellers through your platform, such as Airbnb, and take a commission on transactions.

 

Insights from leading scalable businesses

Many successful companies started small but grew into global giants by leveraging scalability. Companies like Amazon, Airbnb, Netflix, Uber, Zoom, and Duolingo are great examples of leading scalable businesses. Their revenue might seem intimidating, but most had humble beginnings as small businesses.

Let’s take Airbnb, for example. Here’s how two roommates, Brian Chesky and Joe Gebbia, went from renting air beds in their apartment to becoming a $66 billion USD company:

• Optimized their website to offer custom experiences for users in their regions, e.g., a U.K.-centric site for the United Kingdom. They also reduced site load time and improved the user interface.
• Accommodated more customers by offering more payment options and accepting multiple currencies.
• Built a local presence in countries where they operate, focusing on local culture to customize experiences.
• Automated standard processes, like shifting from manually handling cancellations by email.
• Leveraged technology to improve user experience.

Quick tips for sustainable growth and success

To ensure scalable growth, it’s essential to have a solid, actionable plan in place for managing future expansion. This ensures that growth happens smoothly without compromising customer satisfaction or user experience. Additionally, we recommend innovating continuously by using technology to stay adaptable. This will help your business meet the ever-changing demands of the market.

FAQ

What is an example of a scalable business?

A scalable business grows fast and reaches a large customer base with minimal resource investment. An example is an e-commerce business that sells goods and services online.

What does it take to make a business scalable?

Automate processes using technology to perform basic repetitive tasks, such as generating invoices.

What is the best business to start with $10,000?

An internet-based business is ideal due to low start-up costs. You only need a website and high-quality apps. 

Which business is most scalable?

Online businesses are among the most scalable because they can reach a wide customer base within a short time

How do you create scalability?

Make the business easy to duplicate, leverage technology, and stay adaptable to market changes.