Scale is not its own reward. Grow when it helps you serve the people you seek to serve. That’s the only time you should grow.
This is another rule that follows from Rule 1: Real Work for Clients First.
Work out who you seek to serve, and serve them as well as you can in an impactful and sustainable way. In any business or non-profit, the word “sustainable” here carries a lot of baggage.
Depending on your business model, there is likely to be a sweet spot that allows you to serve enough clients (decide early how many is enough, and always start small) and to generate the income you need to be around and keep on having an impact for the long haul.
In a small business this might simply mean having enough clients to earn what you need to earn once you’ve paid yourself and covered all your costs (see, for example Profit First – this episode of Read to Lead is a good introduction – or if you’re a freelancer, this excellent podcast on the bare minimum you should be charging clients).
In a non-profit, finding the right scale can be more complicated. All other things being equal, you probably want to serve as many clients as possible, but you’ll need to grow carefully to make sure that you continue to serve your clients well.
Another complication is that your clients may pay for themselves in the same way that they should in a business. You likely depend on other income streams, and particularly donation income, and finding the right size for your organisation with respect to your donors (two-sided markets again) will depend on your particular circumstances.
If your charity implements for a particular trust or company, they may largely dictate your budget and the scale of operations.
But if you’re funded by general donations, you need to demonstrate sufficient impact in terms of both quality and quantity for people to think you’re worth supporting. You might need to reach a certain size to justify overheads and capital investment – that is, you need to spread your overheads over enough clients to be seen as good value for money. Or it might be that you need to serve clients nation-wide in order to access particular funding opportunities.
Rule 6 of bootstrapping the non-profit
Scale carefully and find the right size for you.