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What do you look for?

If you're looking to grow your business, scalability should be your first priority. Lay the foundation to better your growth potential.

If you watch Shark Tank, you know the most common concerns among the Sharks are revenue growth, customer acquisition cost and, of course, scalability.

For our purposes, we are going to talk about the last one–scalability–and why it should be a goal for any business.

Scalability is what makes a business, in the simplest terms, big, and which typically means greater revenue streams; combine this with efficiencies created by economies of scale, and therefore lower costs, and you have a recipe for a profitable business with strong growth potential.

Related Article: 10 Entrepreneurial Lessons We Can Learn from Shark Tank

Determining Need: What's Your Market?

When thinking about scalability, there are first a couple important things to determine about your business: do you represent a solution to a problem, and what is the potential market for your product or service? These things often go hand in hand because if a problem is big enough, chances are many people are experiencing it. This represents demand and means a potentially massive audience for your business exists allowing you to effectively create your own market. Similarly, if a large enough market for a product or service already exists, chances are there are inefficiencies in the quality or delivery of the product to customers. This represents opportunity.

At Pangea Properties, we own and operate workforce housing, so for us, it is the latter. Workforce housing represents a pool of tens of millions of renters, which represents our TAM – total addressable market.

TAM is an important detail to any scalable business model because one of the key indicators investors look at is market size and the company’s ability to scale up or down easily in response to variations in the market. Workforce housing is a challenging business so this particular asset class has been largely neglected. As a result, the quality of the housing and management of the properties has suffered. This is the problem we are solving – streamlining the ownership and management of scattered site properties so as to make it profitable.

Related Article: 9 Helpful Guides and Tools to Develop a Smart Business Plan

The Components of a Scalable Business Model

There is no one way to develop a scalable business model; it looks different for different businesses. For some, it is a standalone product or service that can be remotely operated with ease, for others it is a business model for which there are low barriers to entering new markets—take Uber, for example.

For the most part, Uber can exist wherever customers demand rides and people want to drive them. For us, it is a proprietary technology platform that allows us to ‘test drive’ markets we are newly entering and expand our footprint if we find the market is economically viable and represents opportunity for return on investment.

Below, I highlight four components of a scalable business model and describe what they look like when applied using examples of well-known companies as well as our own experiences. These four things have allowed us to take an old-line business like property management and make it scalable and profitable in almost any market condition.

1. Standardization

Any business benefits from the ability to get to market quickly. We learned the right away that creating a standard process for property construction was vital to completing quality work efficiently and on time. It also made it possible to work with a large number of partners in different cities, each with their own experience level and understanding. Since we had an end-product in mind, it made things easier to get everyone we worked with focused on the finished product. The common picture created a standard. Standards are easily scalable; customization is more complex.

2. Consistent Management

People are one of the biggest assets of your company. If you can move them into different parts of your organization because of effective management systems, you’ve made running your company easier at every turn. The way our business is managed on the ground requires a very high level of consistency, in our case, as it relates to the responsibilities and procedures of the property manager. If you have all the pieces in place, and every asset or branch of your business is managed consistently, then identifying areas where your most talented team members are needed is simple and the transitions are seamless.

Think of corporations with expansive franchise models—Starbucks and McDonald’s—the product and business operations are remark