Scaling Your Business: What Does That Mean?
I often get asked the question, “What can I do to scale my business?”
Usually, my first response is to ask another question, such as “What does scalability mean to you?” or “What does it mean to scale your business?”
Often, the answer I receive is along the lines of “making the business grow faster.” At this point, I share with them that real scalability means that your business has a life of its own—it grows exponentially with or without you.
Now, to me, “exponentially” is doubling your growth, at a minimum. So, if your business grows from $0 to $120 to $140 to $160, that’s not exponential. But, if you grow from $0 to $100 to $200 to $400 to $800 and beyond, that’s exponential and it’s scalable.
What you’re trying to achieve is exponential revenue with incremental costs—there’s actually a formula for it—but just remember for now that anything less than doubling your growth won’t really accomplish that.
That stated, so many entrepreneurs focus on scaling their businesses right off the bat—they put so much time and energy into scaling the business that the business goes out.
I mean, the business actually goes out—there is no business anymore because it ran out of money.
You see, there is a predictable side of business that’s very important, and this is what entrepreneurs will stop paying attention to in favor of trying to scale up. You have to put 90% of your effort into producing a predictable stream of income.
It doesn’t matter if it’s $10,000 or $100,000, just as long as it’s enough for the business to survive and you do not have to worry about expenses.
This is an important point to remember if you want to scale up successfully. Working “in” the business, making sales grow, gives you the support you need to take advantage of opportunities to scale up. You can then spend 5-10% of your mind power thinking about how to work “on” the business and make it grow, without fear of having to shut the doors.
Great Systems: The Secret To Scalability
Let’s say you’ve got the “predictable” parts of your business covered—you’ve got money in the bank to handle your expenses. Now, you can spend some time thinking about how you’re going to scale up your business without worrying about going under.
There are two ways I hear often that people swear are going to ensure their business is scalable:
- “Our business is going to explode because we have the most incredible product in the world,” and
- “I have a great and powerful personality that keeps people coming to our business.”
Both of these have some serious shortcomings—let’s take a closer look and see what else might be done.
Products
It’s a popular misconception that products are going to blow up and spur your growth.
The simple truth is that you can have an amazing product, and it may not take the world by storm. It’s not a guarantee that your business will grow.
I remember reading this incredible business book—lots of great and different ideas that helped me—but it did terribly on the sales front. This book wasn’t scalable, no matter how good it was.
I read another book that was on the bestseller list, and it was a horrible book—simply a compilation of blogs from the author with no real benefits to me as a business owner.
Now, the bestseller list made the second book do very well, sales-wise, so the author of that book had a product that seems better than the first author, who actually had a great product, but couldn’t make sales.
It is possible for a product to take you to the next level, but just don’t count on it!
Personality
There are a lot of businesses that are based on a personality, someone who is “a force to be reckoned with.”
But take a minute and think about how personality affects business in another way…Very simply, if you die or you don’t exist, what happens to your business?
If you die, the business dies.
A business that is 100% predicated on your personality is not really a scalable business, and, if by some miracle it was, you definitely wouldn’t have a life!
The more the business grows, the more it’s going to suck you in because it’s completely dependent on you. What allows you to scale up a business successfully is to build a system, a foundation for producing results that is not based your personality, or as mentioned earlier, a product.
The Power Of Systems
If you have a great system in place, with a good product and a decent personality behind it, your business will do 10x better than if you had a great product, a good personality and an ordinary system.
Put simply, if you have a great system behind your business, you’ll do well. Look at it like a traditional sales funnel, with a series of steps.
Somebody comes to your business and the first item they see is this, then they go here, then they buy that, and, if they buy that, then they have the option to upgrade.
The great system ensures the sale, as it were.
Now, don’t get me wrong. … You can still make money with a great product and a good personality, but if you don’t have a great system, too, your business is not going to grow—you won’t scale. It’s easy to rely on having that great product or good personality, but their lifespan is actually pretty short because they’re a “one-trick pony,” dependent on their particular strength.
Having a system is the only approach that has a chance of standing independently with a life of its own. The key to creating a great system requires more engagement— you must always know what’s involved, how it impacts the business, and most importantly, who drives the system.
The “who” is critical because sometimes a business owner can have the same system as somebody else in another business. The first business is not scaling because the owner isn’t the driver—they’re thinking the system by itself is enough to grow the business. And that’s not going to happen!
Drivers do things that you and I never see. Drivers do things that happen behind a desk, at a conference table, any place where meetings happen. They know how to drive a vendor, a partner, an employee, an executive team member, or a client.
Many average businesses don’t get this important point because they’re just happy with the system they have in place now.
The Eagles keep winning because Coach Adam Simpson has a system that works, and he is also the driver of that system. He doesn’t have the most flamboyant personality or best product (in terms of talent) all the time, but he succeeds with his system because he knows how to drive it based on what he has.
So, you have got to keep in mind your system, and ask yourself how well your system is. Are you basing your business on a great system with a strong driver or taking your chances with only personality or product?
