7 Business Ideas that Scale [Plus How to Scale Any Business]

business ideas that scale

As a blogger, I stumbled into a business idea that scales pretty efficiently. I can reach thousands of people each day with my words using the power of the Internet and search.

When I say, “scales” efficiently, here’s what I mean:

A scalable business can be served up to exponentially more and more people without incurring an exponential number of operating costs. Digital products, courses, and blogs are great examples of this.

In my example, my product is information in the form of articles. As my site ages and as I add more content it can reach exponentially more people without much of a rise in costs, other than the increased cost of web hosting.

I didn’t really think about this when I started blogging. In fact, I wasn’t really thinking much about business at all when I started, I just wanted to tell my story.

I just assumed all business ideas could be turned into a success story if you worked hard enough and maybe got a little lucky. I didn’t realize there were business characteristics that could influence the level and speed of success.

Over the past few years, I’ve discovered the concept of scale and I can appreciate how much it matters when trying to build a business that can lead to game-changing financial freedom.

Scalable Business Ideas

Let’s take a look at some of the businesses that have high scalability. Later, we’ll look at a few that traditionally don’t scale well. Then, we’ll give you some ideas for how to convert a non-scalable business into a fully scalable business idea by just adding a few tweaks.

1. Software

Did you know that the vast majority of Windows computers in the world today were not built by Microsoft?

Instead, most Windows computers are built by a huge number of hardware manufacturers that all pay Microsoft a licensing fee to use their operating system.

So Microsoft does the work of making the software once and then sells it over and over and over again. They let other suckers deal with the slim margins that are inherent with hardware sales.

And then guess what happens next? The customer who buys one of those Windows laptops realizes that they really need Word or Powerpoint or Excel.

And what do they do? Pay Microsoft for a one-time use Office license or sign up for an Office 365 subscription.

You can land wherever you want on the Mac vs. Windows discussion, but you can’t deny that this is an incredibly scalable business idea.

And if you can build software, you can follow Window’s’ business model. Here is a list of software products that could be built or coded once and then sold again and again:

  • WordPress themes
  • WordPress plugins
  • Mobile apps
  • Chrome extensions
  • Gmail extensions
  • Windows or Mac applications
  • Kids’ educational software
  • Chatbots

And there are so many more ideas than this. If you have any kind of coding background or you could learn how to code, there is literally a limitless supply of scalable business ideas that could make you serious bank.

Related: 5 Best Online Training Sites to Get an Education and Grow (or get started today at Udemy.com)

2. Blogs, Podcasts, and Youtube

As mentioned in the intro, when I first started my blog I didn’t realize that I was stumbling into one of the best business ideas in terms of scalability.

With each month that goes by, each article that I publish, and every backlink that I earn, there is the potential for my site to rise in domain authority and reach an exponentially larger audience.

If I go to sleep tonight and wake up tomorrow morning with double the web traffic, my income would rise significantly. But my expenses would basically stay the same.

That’s because what I’m primarily selling is ideas and information.

It takes me the exact same amount of time to write an article that reaches 1,000 people as one that reaches 1,000,000 people. That’s the power of businesses that are built on sharing information and ideas.

Podcasts and YouTube are two other platforms that are fantastic for sharing ideas.

If you’re wondering where to start, simply ask yourself, “What am I an expert in?” “What am I passionate about? Or, “What areas am I uniquely qualified to teach others about?”

Related: How to Make Extra Money Blogging (or start now by buying a domain name and cheap website hosting)

3. Digital Designs and Downloads

If you have lots of great ideas that you’re sharing on a blog, why not compile some of them all in place in the form of a self-published eBook? Instead of making a few cents per page view, you could earn $5, $10, or $15 per download.

Again, the work is done once and pays you back repeatedly. There are no printing and publishing costs like you would have with trying to sell a physical book. People simply pay you to download a PDF.

That’s a scalable business idea.

Books aren’t the only types of products that people will pay to download digital versions of. Here are some more ideas:

  • Music
  • Audiobooks
  • Stock photos
  • Stock videos
  • Custom artwork

As we’ll discuss later, people who work in creative fields can sometimes struggle to find scalable business ideas that work. But converting your creative work into a digital download of some kind is a great way to scale your business efficiently.

Related: How to Self Publish an E-book and Create Passive Income Royalties

4. Courses

Ok, everything that we’ve mentioned so far has kind of led up to this.

If you are in the “idea” business, blog posts can be a great way to start earning an income from the knowledge that you share. Collating some of your best ideas into the form of a digitally downloadable eBook is a great next step.

But courses can potentially bring you even more income per person than eBooks. People who pay for courses are generally hoping to learn skills that they can apply to earn an income themselves. For this reason, they are often willing to pay more for the information they receive.

While a good eBook may sell for $10, an excellent course could easily sell for $199 or more. And if you’re thinking that building a course would be difficult and complicated, it’s really not.

There is a ton of great course authoring software out there that can help you build a sharp, well-polished course in no time.

Courses are also a really good outlet if you have a “coaching” bent. Coaching or consulting can be a difficult business model to scale. But through the use of courses, coaching can make sense as a scalable business idea.

Related: 20 Unique Business Ideas (That You Can Start Today!)

5. Subscriptions

Nobody wants to actually buy things individually anymore today. Instead, subscription services are the flavor of the day.

As someone looking to build a scalable business, you can use this to your advantage. There are subscriptions for literally everything now, including things that no one would have considered offering as a subscription in the past.

Today, you can buy a subscription for your:

  • Music
  • Movies
  • Meal kits
  • All manner of personal and business software
  • Wine
  • Coffee
  • Books
  • Clothes
  • Beauty supplies
  • Books
  • Candles
  • Stickers (yes, stickers)

Now, do I think some of these things are ridiculous to pay for on subscription? Yes.

But, as a would-be future business owner, you can take advantage of this trend. People are often willing to pay more for things on a monthly basis, then they would if they bought each product individually.

If you’re wanting to get into a physical product business (generally a bad business model in terms of scalability), creating a subscription model may be a smart move.

6. Rental Properties

I put investing in a rental property near the bottom of the list because it will generally require significantly more capital than most of the other ideas listed above.

But, wow, can it be a fantastic scalable business.

Once you’ve paid the property off, your monthly rental income is close to pure profit. You could literally continue to receive payments for years and years after your property has been paid for.

Yes, you may have to deal with difficult tenants at times and there will be some repair overhead. But I still love the rental property business as a whole.

And if you live in an area where short-term rental services are legal, you could potentially make two or three times more in monthly income by listing your property on websites like Airbnb or HomeAway.

7. Investing

Investing in businesses that you believe is a great way to earn income at scale. You invest a certain amount of money once in return for a percentage of all future profits.

When people think of investing in businesses, they usually think of purchasing stocks, mutual funds, or index funds. This is definitely a great way to invest in businesses.

But the stock market isn’t the only place that you can invest in up-and-coming businesses. Equity crowdfunding is a relatively new and fascinating way to invest in startups and build passive income.

While you may not have enough capital today to make a sustainable income off of your investments, you could realistically live off your investments in the future. To get to that point, you’ll need to invest consistently and methodically over a long period of time and avoid making emotional knee-jerk reactions to the stock market ups and downs.

Related: How to Build Passive Income with Equity Crowdfunding

Inefficient vs Efficient Scale

Above are some good examples of business that scale. Here’s a bad example; dry cleaners. There’s one on every corner. If the dry cleaner on the corner wants to serve more people and increase sales, they are going to bump up against some natural limitations (i.e. size of their equipment and location, the number of people living in close proximity, etc.).

To achieve growth beyond these initial limitations they are going to have to hire more employees and build new locations. The operating costs of a cleaning business are tied closely to the increase in sales. It’s hard to escape it.

Let’s say a dry cleaner brings in $200,000 in sales each year. After expenses, that might provide a decent salary for you and your family. But to grow past that $200,000 mark, you’d have to incur a lot of expense and risk (i.e. purchase another location and hire another set of employees, including a manager since you can’t be there yourself).

MJ Demarco, author of the book, The Millionaire Fastlane, says this about scale:

“If you want to climb the heights to financial freedom you need a business the SCALES into the sky…in other words, it will need to reach new heights to reach the masses. The tallest skyscraper in the world can be viewed by millions. How tall is Facebook? Conversely, how tall is that little shop you have on Elm Street? Scale is what creates millionaires. The taller your building, the more it can impact.”

In the dry cleaner example, the one location will never be able to serve millions of people. It will likely never be able to serve more than the people living within a mile or two radius. It just won’t scale efficiently.

Not everyone wants to be a millionaire, I realize that. Some people wouldn’t mind building a job for themselves that they love. Especially one that comes with autonomy and the satisfaction of owning your own business. In some ways, I’m still in this category and I can tell you I love it.

Will Your Business Idea Scale Efficiently?

But if you do want to achieve greater financial freedom and earlier in life, then I think you need to think about scale. In particular, you need to be asking if you can scale the idea you have or the business you are starting up? More importantly, you need to be asking whether the idea or business will scale efficiently.

Ultimately, every business is going to scale. But will it scale efficiently?

Again, a business that scales efficiently is one where you can grow (i.e. increase sales) without incurring an equal percentage growth in expenses. Let’s look at a couple of charts that illustrate this concept (from an admittedly over-simplified perspective).

Scale a Business

The chart on the left is an example of a business that doesn’t scale efficiently. Operating expenses match sales in percentage increase as the business matures. Examples of businesses that tend to behave this way include:

  • Physical products
  • Consulting
  • Creative work (writing, graphic design, etc.)
  • Service-oriented work (restaurants, rideshare driving, babysitting, house cleaning, etc.)
  • Events and Tradeshows

The chart on the right is an example of a business that can scale very efficiently. You can clearly see that sales can increase without an equal increase in expenses. Which business would you rather own?

How to Scale Any Business Efficiently

What if you already own the dry cleaners?

Well, all is not lost. As I said, you could take the extra risk and time to bring the business to a larger scale. It just wouldn’t be as efficient.

I’m sure there are plenty of multi-store dry cleaning entrepreneurs who’ve reached financial freedom over time. There are likely some who never have to step foot in the business or deal with customers.

But a faster way to freedom might be to use your expertise in the dry cleaning business and create an at-home dry cleaning product that could help customers all over the world.

Or you could create a course to teach aspiring entrepreneurs how to get started in the dry cleaning business. Both of these ideas have the potential to reach thousands or millions of customers. Something the single dry cleaning location could not.

Any idea can really be flipped on its head like this. Take any of my 52 Ways to Make Extra Money and I think you can find a way to either directly or indirectly scale the operation.

But, to get you started, here are four keys to scaling an “unscalable” business more efficiently.

Also read: 7 Things We Did to Grow Our Business from $89,000 to $524,000 in 5 Years

1. Monetize Your Knowledge

How do you turn a “service” business into a “ideas and information” business? By teaching others what you’ve learned about running a successful service business.

While you may hit an eventual ceiling as a personal trainer, you could make exponential amounts of more revenue if you taught others how to build thriving personal trainer businesses through training videos or courses.

Freelance writing is a job that lands squarely in the creative services field. You spend time writing an article. You get paid for the article. It’s pretty simple. And unless you start charging more per article, you’re income is going to eventually hit a cap.

But what if you taught others how to become full-time freelance writers? That’s what freelance writer Cat Alford did with her Get Paid to Write for Blogs course.

Literally, any business idea can become a scalable business by finding a way to monetize the knowledge that’s locked inside your head.

2. Get Paid to Refer Your Clients to Other People or Products

Your small business owner coaching business may be at its max capacity. But what if you could develop affiliate partnerships with other companies in the business services space like email marketing companies, bookkeeping software companies, printing shops, etc?

What if you received a commission for every new customer that signed up with them as a result of a referral from you? This is a great way to diversify your income and scale your business.

Here are two examples from the Part-Time Money Podcast:

  • Cristina Twigg of Easy Care Babysitters: Cristina could have settled for being a babysitter. Instead, she chose to expand and create what is essentially a babysitting brokerage or dispatch company. She’s the hub that connects parents and sitters.
  • Jim Vitale of Vital Hockey Skills: Jim is a coach. People pay him to be with them in person and teach them things. For the longest time, Jim’s business had limited growth. Now he’s getting into affiliate marketing and offering reputable products alongside his online hockey skill videos.

3. Find Ways to Convert Physical Products to Digital

While I rather unexpectedly fell into a business that scales well in blogging, I also run another business that definitely isn’t known for scaling well. I head up FinCon, a conference that I originally started as an event for bloggers in the personal finance community to network and connect with each other.
Conferences, tradeshows, and events are businesses that can scale, but they are a challenge to scale quickly. Simply put, they typically only take place once a year and require a great deal of time commitment and manual effort. If you want to improve your business, you need to wait a whole year to realize the effects of those changes.
Additionally, an event can come with many real, variable costs. Things like meals, staffing, and event materials typically remain the same per attendee, regardless of the number of attendees.

To help us scale our event quickly, we began by trying to cut costs. One way we did that was by introducing a digital pass to the event which can be replicated without any additional costs.

We’ve also removed some of our more expensive variable costs and placed them as part of a premium offering (i.e. prepurchase your meals). If you have a particular part of your business that’s really bogging you down in terms of cost, don’t be afraid to charge extra for it. If it truly provides value to your customers, they’ll be willing to pay the extra amount for the service or product!

And as we look to continue to scale in the future we want to continue to create more digital services and products. The more that you can eliminate “things” and replace them with digital alternatives, the more efficiently your business will scale.

4. Expand Your Scope and Charge More for Premium Services

Another way that we’ve been able to scale our business at FinCon is by expanding the scope of who we’re trying to serve. We used to focus just on bloggers and now we serve all types of digital media creators in our industry.

If you have a course on how to do social media management, could you expand it to become a course that targets anyone who wants to do virtual assistant work?

If you have a service that connects babysitters with parents, could you expand your service to also target people who are looking for dog sitters or senior care?

Always be thinking about and exploring ways to expand the scope of your business.

Related: How to Find Legit Work as a Virtual Assistant (or learn how to to become a $10k VA today)

Conclusion:

Choosing to start a business is a smart move. But choosing a scalable business idea is an even smarter move.

If you haven’t started your business yet, I would recommend trying to pick one of the scalable business ideas from our list.

If you’re already in a business that doesn’t typically scale well, that’s ok! By monetizing your knowledge or taking advantage of affiliate relationships, you can scale your business efficiently too.

Do you have any scalable business ideas we didn’t mention? Do you run a scalable business?

Earning money from a business is great, earning even more by scaling that business is even better. I loved how this post broke down how to scale different kinds of businesses and how to scale efficiently versus inefficiently. How efficient you're being makes a huge difference in your ability to continue to scale without working yourself to death, so excited to use what I learned in this post! #startabusiness #scale #scalability #businesstips #earnmoremoney #growabusiness

Comments

  1. Ben Edwards says

    I attended a conference on innovation and entrepreneurship today and I asked a founder of a business accelerator why so many software products seem to come out of these biz incubation programs.  His primary answer was that software products can scale so they have the opportunity to reach a lot of customers/users relatively quickly.   Which is good for potential users that might need the product and for potential investors.

  2. Welcomemat Frisco says

    Great Article Phillip.  This was one of my attractions to opening my franchise  Welcomemat Services Frisco – McKinney.

  3. FunnyAboutMoney says

    Well said! I stumbled on this concept when I discovered, to my amazement, that people would pay $100+ for bead necklaces that are pretty but hardly fine jewelry. This sounded grand…briefly. Then I realized that one person can make only so many of the things; that training someone in Bangladesh to do it for subminimum wages would be pretty impractical; and that if it took me more than a day to make one of the things, I’d be earning a grandiose $50 a day.
    I suspect the same is true of most artisanal businesses.

  4. HullFinancial says

    Scale was the exact problem that we faced in the software development company I co-founded. We were a services company (and still are, predominantly), so you can only grow as big as you can a) find projects to do, and b) find people to do said projects for you. It’s a better problem than being the one-man shop doing everything for everyone because then your scalability is limited by the number of effective, productive hours you can work. At least when you grow bigger than yourself, the scale is multiplied by the number of people who are working with you. However, at some point, unless you want to become Booz or McKinsey, you hit a horizontal limit – your ability to manage the human scale. That’s why we continue to try to develop a software product and have engaged customers like Zappos to be beta clients. Once you create the software, it theoretically scales infinitely and requires much less manpower to maintain and add upon. See: Microsoft. The services part of the company can fund the R&D for the product part of the company (a tenet which applies to nearly any business), but the product will create MUCH higher EBITDA multiples in an acquisition than being a pure services company.

  5. criticalfinancial says

    Excellent post, PT you have a wealth of knowledge.  I just found your site will be adding it to my favs!  Thank you

    • Philip Taylor says

      criticalfinancial Thanks for saying so. I appreciate the comment and I’m honored you are adding me to your favs.

  6. Money Life and More says

    I felt like I was back in business school again reading this post! Great points and I hope people find this info useful. I’m hoping my blog gets to the point where I can scale it at some point, but it is still in its infancy right now. We’ll see where life takes it!

    • Philip Taylor says

      Money Life and More Yeah, I started getting into a little jargon. Hopefully the main point wasn’t lost in all of that. Thanks for checking it out. Regarding scale and blogging, Google has definitely taken steps to make scaling more difficult. But they really have a hard time ignoring a 500-1,000 post blog. Then, who knows what exponential results you’ll be getting at that point. The sky is the limit.