What can stop a business from being scalable?One of the key weaknesses in a business with large goals is that the business itself may not be scalable. Before setting the vision and the goals for the business, an important part of the appraisal process is to determine whether in fact the business is scalable, and to what level the business can grow.
Often, a business is restricted by its limiting factors. These should have been identified within your SWOT analysis, however sometimes the business owner struggles to see these as clearly as an outsider can.
Below are some limiting factors that I typically see within businesses:
Lack of capital
Limited market size
Limited available workforce
Management team / structure
Business systems and processes
Mindset limitations within the entrepreneur
Lack of clear vision and focus
Not all factors, particularly external factors, can be resolved, however the first step is always to identify them, so that you can weigh up which factors can be resolved. Typically, I tend to find that the main reasons that a business cannot scale are the entrepreneurs’ mindset, the abilities of their management team, business processes and a lack of capital.