Scale Is Leverage

The scale of a business can be likened to a waterside environment. You can choose to live by the ocean or by a pond in a local park. The following business ecosystems exist:
· Local/community (water basin)
· County/city (pond)
· Statewide (lagoon)
· Regional (lake)
· National (sea)
· Global (ocean)
It is hard to find scale locally or in a small water basin that can only hold a few people. Of course, it is not impossible, but a certain volume is required, and volume comes at a cost. The larger the environment, the greater the leverage.

· Is there no cap on this business’s net income—say, from $2,000 a month to $200,000 a month?
· Is the asset value of this business in the millions?
· Does this business impact millions of people, or just thousands? Is its customer base global, or confined to a small neighborhood in town?
· Can this business be replicated and expanded beyond local trade circles through franchising, licensing, or opening additional stores?
· In the best-case scenario, how many units can be sold—100 or 100 million?
· What is the maximum unit profit achievable in the best-case scenario? Does it carry real magnitude?
If you cannot answer these questions affirmatively, the business may be constrained, and wealth creation will be hindered.
Small business ecosystems can only create limited wealth. Scale involves big numbers—think big, whether national or global. Only big numbers or scale can make the law of impact work. To make serious money, you must reach millions of people. That kind of impact is unlikely in a small shop on Main Street, but it becomes possible with stores spread across the country.