STR ATEGY
Two Perspectives on Scaling Your Business A lesondra Mora, assistant vice president of marketing at Streamline Funding, recently sat down with two of the private lending industry’s thought leaders: Romney Navarro and Chris Ragland. In this casual Q&A, they offer their (sometimes differing) perspectives about how to scale a private lending business, including how to prepare to scale and the best markets for doing so.
Mora: What’s the difference between scaling and growth?
Ragland: I think growth is a bit unpredict-
able, whereas scaling is more methodical. It’s more quantifiable. It’s predicted, whereas growth is kind of organic.
Sometimes organic growth can be good;
sometimes it can be dangerous. Growth is what should happen if you’re doing your
job. Scaling a business is more deliberate and intentional.
Navarro: You took the words right out of
my mouth. Scale is deliberate. You don’t
scale without a plan and without action. Growth happens if you’re running your
business correctly. Every business needs to grow, but not every business needs to
scale. When it’s time to scale, it’s not the same set of rules. Scale has a plan.
Ragland: That leads me to something else
we’ve talked about before, which is “grow or die.” Growth could be in a number of ways—in volume, being more efficient,
or maybe growing as a person. So grow; 80
PRIVATE LENDER
otherwise, somebody that has a better way of doing things will take your place.
Mora: How do you decide whether to scale?
Navarro: Scale has a bit more of the end
in sight: There is a defined goal, a defined target. Why does somebody decide to
scale? They want to achieve something.
There is also a personal component. Some people are built to grow, and some people are built to work. For those who are built to scale and want to achieve something, that’s the point where they’re saying,
is meant to be in an organization that’s truly scaling. Mora: What should you have in place before moving forward with scaling your business? Ragland: If you want an academic an-
swer, it’s: Here’s the well-articulated plan, resource allocation, budgets, Porter’s Five Forces—all the academics. Another way to answer the question is your resources, which for me is human capital and actual dollars, most of the time. I’m either going
“OK, next stop, exit. Next stop, some
to spend money to scale, or I’m going to re-
It’s the next big hurdle in that person or
right team that can execute, I can attract
level of wealth, importance, significance.
cruit the right people to scale. If I have the
that organization.
the capital to scale my business. So, the
Ragland: Not everyone’s really built to
short answer for me is ensuring that I have
scale. I know people who excel in small
the right people with enough diversity
enterprise organizations. Sometimes
a mission, you don’t want four people to
day. But sometimes it can be a salesperson
people to have a broad variety of skill sets
teams and work groups but fail in large
of skill sets to survive. If you’re going on
person is the owner—and that’s not a good
know how to do the same thing. You need
or an operations person—not everybody
so you can get to the other side.