#AUTOMIZE BILL DRIVERS#

Firms can make their asset base lighter through outsourcing. Heavy investments such as production plants lead to lower scalability, light investments such as a website lead to higher scalability. Light asset base – this refers to the degree to which you have heavy or light investments.

#AUTOMIZE BILL DRIVERS#

By René Bohnsack Drivers of Scalabilityīut how do you create a scalable business model? First, you need to understand the drivers of scalability. Thus, the difference between growing and scaling is that growing refers to investing in resources at the same rate as you are increasing revenues and scaling refers to exponentially increasing revenues without investing in new resources (see the illustration). Imagine you invested in a website and created a business model for selling coffee online, it is often irrelevant whether you sell 500 bags of coffee or 5000, the only costs that (may) increase our variable marketing costs. Particularly internet business models are rather scalable because digital technologies are immaterial and therefore almost infinitely scalable.

In other words, scalability is about increasing productivity, creating more output with the same input. Scalability as such refers to the degree to which revenues can be increased without proportionally increasing investments in production or infrastructure. Photo by Bill Jelen on Unsplash Growing vs. Scalability has become a buzzword, yet not everyone understands what a scalable business model actually means and few understand the actual drivers.

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