Back to Blog Feed

We will help you grow your small business.

Learn More

Join our Newsletter for great tips and updates.

Small businesses looking to attain more success than ever before can only do so if they are fully aware of their goals. Once a specific objective has been defined, everything that must be done in order to achieve it will gradually become clear. Experienced business owners often advise younger businesses to ask themselves a series of questions to determine their individual definition of success. This process will then reveal whether the business should concentrate on growing or scaling.

But wait, aren’t those two terms basically synonymous? Yes, they are frequently used interchangeably but they mean very different things. Business owners that don’t know what separates each term might think they need one when they really need the other, or both.

Clearing The Air

Growth is the more simple of the two. Whether it’s revenue, productivity, or net worth, you want to make something bigger. A business that is solely focused on “growing,” not “scaling,” isn’t so much worried about how it will grow or how much the growth initiative will cost. This is because growth is not measured by anything other than a percentage that is attached to a single element of your business. Only until that percentage is achieved can the business safely say it has grown.

Let’s go back to that question about defining goals, or what success means to your business. If your answer is along the lines of “earning more revenue,” “increasing profits,” or “churning out more work over a certain period of time,” you want to grow, not scale. You don’t know if you’ll be able to manage the level of growth you have in mind or if it’s even sustainable but for one reason or another, the goal feels within reach. A business doesn’t necessarily have to hire more people, buy new equipment or increase its marketing spend to earn more revenue or make a certain percentage point go up.

It is for this reason that businesses that are at a stage in which their utmost concern is making more money should think twice about applying for small business loans. Debt financing in general is far more sensible and advantageous for businesses that have a very different answer to the aforementioned question and are therefore more interested in scaling than growing.

Which Is Best For Your Business?

Scaling refers to the processes that lead to growth, but it’s the processes, not the raising of percentage points, that are the main goal. The business is less concerned about achieving growth in general than it is achieving growth that can be managed. This is the kind of growth that doesn’t consistently call for more time and money or force the business owner to work more hours every week. A business cannot scale if it is trying to support revenue gains that cost more time and money than they produce in return. When scalable growth is achieved, the business owner and employees enjoy a better quality of life because their company is more efficient and sustainable.

For example, a media company that wants to scale rather than grow would devote more attention to accomplishing smaller goals and less attention to, say, earning more revenue from ad spend. The company might consider using a working capital loan to build a unique audience, make engagement more consistent, improve its profit margins or expand its presence on multiple channels.

Small Business Loans For Each Purpose

The natural rebuttal to the idea of using a small business loan to scale is that you might not bring in loads of cash right away. But thanks to alternative business lenders, smaller companies can access unsecured business loans that are specially designed for long-term investments and improving multiple elements of your business in the process. Carrying out the investment itself might be time-consuming but the outcome leaves you with the resources to work smarter, not harder. These small business loans do not feature the generic, non-negotiable terms of traditional bank loans and can be paid back as you are generating more revenue.

Scaling a business usually involves changing the way the business operates. Maybe you are introducing new technology, building another department of staff members, or taking on larger projects. It could take several months for this new system of operations to settle in but without the burden of fixed, monthly payments, you’d have all the time and funding you need to put each piece of the system into motion while covering regular business expenses. Alternative business lenders can also approve all sorts of business funding programs quickly and distribute them at almost any time in your industry’s financial cycle. You could receive funding when business is slow or right before you are about to sign a game-changing account and have your new systems ready to go as you make your largest payments.

The Value Of Knowledge And Experience

Bank loans are said to be among the cheapest on the market, and the borrowing limits they offer are virtually unrivaled. Their borrowers can spend well over a year making payments. And yet countless business owners find they cannot afford bank loans, which appear to have done nothing to decrease the rate of small business failure. This is arguably because bank underwriters likely do not consider the difference between funding programs designed for growth and those designed for scale.

Alternative business lenders like United Capital Source give you small business funding programs that are manageable. Rather than solely concentrating on raising statistics, you learn how to improve your business efficiently without becoming overwhelmed. This is the knowledge that turns a good business owner into a great business owner, since scalable growth is the only kind of growth that promises sustainable benefits in the long-term. You might not get enough money to buy everything in your sights but the ability to manage debt while running your business smoothly is undeniably priceless.

We will help you grow
your small business.

Get Started

Leave a Reply