Food for Thought: Scaling Your Business

I did not want to write another article about “5 steps on how to scale your business” nor “the 10 things you must do to go from 100 – 1,000”. There are many good articles already published.

I would like to share a story of a local Japanese ramen shop I chanced upon. Its USP is to bring quality ramen to the average diner at affordable prices. That’s a big sell, given that the average cost of a bowl of Japanese ramen is three to five times that of a bowl of local wanton noodles. Intrigued but extremely sceptical, I decided to give it a try.

An entry-level bowl of ramen at this establishment costs $6.90 and comes with ramen, two slices of meat, garnishings, and a very hearty broth. It was tasty and wallet-friendly. I was sold.

I went back a second time last weekend. This time, while I ate, I Googled the history of this shop and came across an interview with the two founders. Prior to starting their ramen shop, they had no F&B background. But to my amazement, they were able to scale their business to seven outlets since starting in 2015. How did they do that in a hyper-competitive and cut throat F&B sector? I was sure that they must have a special formula for success.

And this is what I found out:

1. The founders wanted to make an honest living doing something they felt passionate about: For them, this meant being committed to selling “affordable ramen for the masses”.
2. They were obsessed with creating a product that customers love. Their aspiration was to bring a bit of happiness to each customer’s day with their ramen.
3. They disrupted the status quo by always finding a better, cheaper, faster way of doing things. They designed processes to cut costs in areas so that staff are not bogged down by non-core activities. This allowed them to keep their team lean.
4. They budgeted for the inevitable rainy day and did not give up when things didn’t go according to plan. When they started their first stall, it was at “a low-cost location” so that the losses would be manageable even if business was slow. Business was brisk in the first few months, but they lost all their profits when the school holidays came. Instead of giving up, they relocated somewhere else with higher traffic.
5. Through monthly profit-sharing, improved staff welfare, and positive working environment, they have a employee turnover rate that is below industry average.

That made me ponder, what does this mean for tech entrepreneurs looking to scale their business? Here are my conclusions:

1.  Be obsessed with creating the best product that serves the needs of your customers – If you create a great, value-for-money product and take care of your customers, revenue growth should take care of itself.
2. Always be dissatisfied with the status quo. Find better, faster, cheaper ways of doing things. Improve unit economics and cost discipline. Ultimately, all these activities will be beneficial for the bottom line.
3. Never give up when things don’t go according to plan. Don’t forget why you started in the first place. Be nimble and be ready to tweak strategy if needed. Anything worth doing is worth doing right.
4. Take care of your team. Your team is your most valuable asset. When you take care of them, you create the fighting spirit and daring initiative that powers your team to go through the good and bad times with you.

I had wanted to add – be on good terms with your existing and potential investors. But that would be too self-serving!

It appears, if you get the above right, the scaling up should take care of itself. Oh, looks like I inadvertently shared some “how-tos” about scaling your business.