Do Not Attempt to Scale Your Business Until You’ve Done This…
10 years ago

A lot of entrepreneurs are biting at the bit to move forward with their business. They want to know, When can I scale? When can I scale?

First of all, scaling means growing while maintaining the same shape. The difference between growing and scaling is this: While growing, you can make small additions, like adding an appendage. But when you scale, you’re expanding the height and the width of the entire thing. If you’re scaling a business, you are taking its existing form and making the whole thing larger. This means you have to make sure that the form you’re using is one that’s working.

So, the right time to scale a business, or any part of a business, is once you’re sure it’s already working well. How to get to that point?

I’m going to take you through it right now, from start-up to scalability, phase by phase.

What the Start-up Phase is All About

At the start-up phase of a business, you’re really just trying to get the value equation right. And with each phase, you don’t want to pass go until you have that one done and you’ve really mastered it. For example, you don’t want to strap on a whole bunch of expensive automation systems and really, really focus in on that until your business has that value equation right.

What is the Value Equation?

The right value equation happens when your customers find the value in your products or services to be worth way more than the price you’re charging. But what you’re charging is actually higher than the cost required for you to provide that product or service.

That’s a very simplified understanding of the value equation.

A way to discover your value equation is to go out there and talk to people. Talk about your products and services. If people are kind of unclear about the value, unsure whether you’re going to help them, or iffy about whether the price is right, then that’s a big, big red flag. You want as little resistance as possible, and only at that point is your value equation right.

What Comes After the Value Equation…

The next phase is really the sustainability phase. You take a good value equation and then you start to get your systems and automation in place. Not before then. Now it really becomes about creating a sustainable business. This consists of making it predictable, repeatable, and replenish-able in the major key areas of business. Those areas would be marketing, sales, and fulfilment.

We call this “making it crank.” Once you have that “crank” really rolling, you get to move into what we call the scalability phase.

Alas, Scalability!

This phase is where the lion’s share of your time is spent on automation. Scalability is really all about automation, delegation, and outsourcing.

If you’re just alone trying to build your company, you’re going to limit yourself–you need to learn how systems do some of the work for you. This involves learning how to delegate or outsource some of that. There are a very limited number of hours in a day and you, by yourself, are not going to scale.

And remember, as I briefly touched on above, the right time to start thinking about automation is in the middle of the sustainability phase, when you’re starting to create that predictability.

The Wrong Time to Scale Your Business

I have seen companies that were fifteen, twenty years in and they still didn’t have their value equation right. Then I have seen start-ups that had it right in the first month and were already into that sustainability phase. It’s much less about how long you’ve been in business and more about the resistance you are getting.

I’m a big believer in maximizing value. The rule of thumb I like to go by is that the customer ought to have the feeling that they’re getting $1000.00 of value out of something that costs them $100.00.

Most people develop the product first and then market and then sell. What I say is, “Go out and first see what it is people want. Use the sales to create the marketing and that will inform what the product is.” So, the right timing is really about getting the sequencing right.

A lot of people start a business and they’re like, “Okay, first I’ve gotta figure out what my product is,” and they spend a lot of time kind of figuring out what that product is.

“And then I’ve gotta create some marketing, and then once I have that settled, then I’ll go out and sell it.”

And that seems logical. Right? But for most businesses, you actually need to turn that all the way on its head. Successful companies start by going out there and reaching out to the prospective customers and having sales-type conversations that find out what the customer really wants. What they need. What they’ll pay for.

Taking Your First Step

I encourage you to go out and find ten people, ideally they’d be ten potential customers, but even if they’re ten friends that’s okay. Interview these ten people about what they find valuable in what it is that you might offer, and listen to the keywords they use. Listen to what they say.

One of my favorite questions is, “If you were gonna spend $1,000 on x,” x being the realm of your product or market “…what would you expect to receive? What would you need to get? What would you need to receive in order for $1,000 to feel like a valuable thing?”

Then, once you’ve done that, I have a free offer to help you evolve your business even further, faster than you thought possible. When you’re ready, come back here and fill out the orange box in the top right corner of this page–I’ll send you a customized rapid growth plan for your business within 19 minutes.

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