How To Scale A Business (FREE Tutorial)

How To Scale A Business (FREE Tutorial)
Image – Pixabay (PD)

What Is Scaling A Business?

Scaling is the fine art of taking a business that works on a small scale and growing it as much or as fast as possible. There are many ways to do this and many things to learn. It’s truly an art form, one that can turn a small business into a massive business plus enable small profits to turn into huge ones… if done right.

A very simple example: Let’s say you have a juice bar and it’s a success. Things are organized, attractive, it’s running smoothly and it’s profitable. There’s a very good chance indeed that the exact same model that works in one location, will work in another. If you can make $100,000 in one city… then what if you could make that amount in every city in the world? This is one of the principles utilized by big enterprises of all kinds. They demonstrate profitability on the small scale and replicate it.

Another simple example: You’ve created a profit-generating website that continues to pull traffic and profit on an ongoing basis. Why not grow the fan base, expand the content, develop new traffic sources – or create two, ten or even a hundred websites that run on the same model?

These are all examples of scaling.

However, scaling up is not just as simple as “doing more of what works” or setting up another shop somewhere else. It requires a radical shift in your approach.

Team Building And Outsourcing

Ultra successful entrepreneurs including Steve Jobs and Felix Dennis have stated that the business owner’s most important task is locating, hiring, motivating and keeping the best possible talent – because they are the ones who are ultimately going to do the vast majority of the work building the business.

The labor marketplace has now expanded to global size. You can hire people from just about any country in the world and work with people you have never met or will never meet. The amount of talent that is out there, ready to work, is greater than ever before at any point in history. This is an incredible opportunity. Outsourcing enables you not only to search a bigger talent pool but enables you to benefit from the difference in wealth of different countries. Workers from poor countries have access to employers who are used to paying more, and employers from wealthy countries have access to workers to are used to earning less. What tends to happen is that they “meet somewhere in the middle” – with workers getting work that pays more than other work available locally and employers finding staff for a better rate than available locally. There is huge disparity in price in the global marketplace and this gives incredible opportunities.

It is even possible to hire entire outsource teams, who are already trained in certain tasks, in addition to human resource staff with team building skills who can build the dream team for you.

Why Expansion Is Challenging

When you “set up shop” for the first time as a business owner, you will probably find yourself doing ten different jobs in addition to the creative work of the business that was the inspiration behind striking out on your own in the first place. So you’ve hired some staff and now things are ticking over. You’re hungry for more. But think it through: What’s going to happen when you have two, three or more locations – all some distance from each other? You can’t do everything at once. You can’t keep an eye on everyone and everything any more.

Hiring more staff is the obvious first step – but then who will oversee and train them? You will quickly learn that there are only so many people you can oversee and train at once – and that suddenly you have yet another “new job” just dealing with everyone. It can be a constant distraction that eats your time and your focus.

What’s the answer? A Management team? Well, you have to train them too – even more thoroughly than the staff – and pay them… and still look over the staff’s work to make sure that the manager trained them correctly! Not only that but the staff might not be as motivated by the manager as much as they are by you. There could be a corresponding loss of quality while you learn the ins and outs of implementing management – as no-one will ever be as passionate about your business as you are. Something that was supposed to make your life simpler has suddenly added a huge new layer of complexity. Sound familiar?

The Critical Shift – System Design

The previous example illustrates the critical importance of systems. One of the marks of a highly successful business is that their operations systems are very well formulated and organized. Running the business literally becomes like baking a cake by following a recipe. The business is the recipe. Have you noticed that Starbucks serve exactly the same drinks, made in exactly the same way, all over the world? It’s partly because consumer research has informed them that people want “their drink”, just the way they like it, every time. But it’s also partly so that the executives of Starbucks don’t have to micromanage every store and check they way everything is being done. The “Pyramid” of operations has been completely designed down to the last detail and the execs can trust the “machine” to do what it is supposed to do and get on with the business of business. A business such as this has an “operation manual” which details all of the job in order to make the machine run like clockwork. It has been optimized for customer experience, efficiency, profitability, replicability and each outlet can run in exactly the same way.

The critical shift here is not just in training more staff, but designing complete systems so that instead of going through the training each time, you can hand over the materials and they can learn them with minimal intervention.

If you train all of your staff personally, you might be doing it wrong. Seek to only teach it once by creating an operations manual that can be used and learned by all who need to.

Take all that passion you have for getting things right and pour it into making an inspiring, accurate tutorial that will enable it to be right by anyone who follows the tutorial. Then go through the tutorial with your staff and ask them to let you know if there are any bumps in the road, any aspects they don’t understand. Soon enough, the tutorial will be smoothed out and then this aspect of your business is DONE and taken care off. It’s a weight off your mind.

Make It Work Without You

As super-successful entrepreneur Felix Dennis stated, your number 1 task as a business owner is in seeking out, hiring and motivating the best staff you can get your hands on. Because they are the ones who are going to build your business for you…

However a successful business model should be designed in such a way that it can work without you. A recipe does not need the original chef to be there. It was created in such a way that it can be done by “anyone” who has the recipe. This should be a goal of a successful business. It not only enables you to “scale by replication” but also makes the business a more attractive sell. Whereas all the while you make a business that cannot function without you, you are digging yourself deeper into a massive, exponentially growing workload that will bury you – and the company – alive.

Make It Pay First

One of the classic errors is in attempting to scale a business that has not yet proven its profit making potential on the small scale. Don’t do 100x as much of what isn’t working. Fine tune it. Make it put money in your pocket. Iron out the kinks. Then scale. Timing is crucial. Be prepared. Just because you have started to turn a profit, it doesn’t automatically mean you are ready to scale. Of course, the budding entrepreneur wants maximum trajectory but you should be aware that over-expansion has been the downfall of many a business. Be aware that even though you may be able to cut overall costs by doubling your orders, you also create further complexity and all kinds of hidden costs.

Watch Your Business Like A Hawk

Scaling also creates a strange shadow that must be anticipated and overcome: Invisibility. This starts to happen when an organization with multiple levels of hierarchy or multiple locations has lost touch with what individuals are actually doing within it. The all-seeing eye can only look in one place at once. You must be wary of invisibility. Left unchecked it can literally rot a business from within. Be on the lookout for “secret systems” developed my team members. This happens when they develop their own way of doing things. Now it might work very well – for them – but what happens when they are suddenly unavailable? Total chaos. Nobody can figure out what they did or how they did it. All team members should be accountable for what they are doing and there should not be a situation in which what a person is doing is unknown.

It’s also a very good thing to ask yourself this question about your team members: Can I trust this person to carry on in the right spirit even when I am not looking?

Vertical Integration

Another form of scaling is vertical integration. Vertical integration is where a business develops its resources either upstream or downstream in the supply chain. A classic “old school” example was the newspaper tycoon William Randolph Hearst, who realized that he could expand his newspaper empire’s profits by owning the paper mills that supplied the paper for the newspapers. Another example would be Apple Inc, who created a vertically integrated “ecosystem” of iPhone, App Store, iTunes etc.

An online example of this: Let’s say you have a successful Facebook page that generates significant traffic through regular posting of high value content. You can use this traffic to kickstart new websites in your niche. You can make new content for the new website and instantly “switch on” the traffic by posting the new content on the existing FB page.

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How To Scale A Business (FREE Tutorial)
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