Learning how to successfully scale businesses isn’t exactly like learning to ride a bike. There is no surefire way to grow any business with guaranteed success, and the risks stretch beyond yourself. There aren’t any training wheels, but there are mistakes you can avoid when you begin the journey into growing and expanding your organization which will save you some growing pains down the road. This week, Hallie and I discussed the top seven mistakes we see leaders and CEOs make when trying to scale a business, whether it’s scaling for the wrong reasons, holding onto projects that would be better handled by someone else, or simply how they treat their own finances as their profitability increases. We have made some of these same mistakes along the way, but we are here to help you learn from our experience so you can avoid some of the pitfalls of growing your own business.
In this episode, you will learn about:
- How to know when it’s time to scale, and when it may be too early.
- Even if you have the best models and systems in place, you still need talent — great people that are clear on the organization’s vision, and who also have the ability to excel at what you hired them to do!
- How much do top income earners really have in their bank accounts by the end of the year? The answer may surprise you and have you thinking twice before purchasing that boat you’ve been eyeing!
Take a listen and let us know what you think with a comment below! If you like what you hear, make sure to subscribe and share with a friend.
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Timestamps
[3:10] These are the seven mistakes we believe people make while scaling a business.
[4:22] 1. Scaling too early. If you are not fully sound and making the profit you need to make, scaling a business to compensate for the lack of profit is not the way to do it. Make sure you are currently generating a profit that makes sense so if you scale it, you are not actually losing more money.
[8:20] 2. Not having a solid foundation. This includes your models and systems in place from everything including admin services, operations, to lead-gen systems, marketing, and sales processes. Your models and systems should be able to be duplicated successfully by someone other than you.
[15:14] 3. Hiring the right talent, or not making the tough decisions around talent. Once you have a solid core foundation and the right models and systems, the next big factor is your people. You have to be ready to grow and pay them more, and not afraid to jump in brackets and income. We discuss moving people around to find them the right role, and if that doesn’t work, you must not be afraid to let them go completely if they aren’t performing.
[23:40] 4. Not willing to let go of parts of their job. Leaders often make a mistake scaling the business while they are still afraid to delegate or put in the time to train someone else. Whether it’s ego or fear, when we hire people even better at a task at hand than we are, we have to trust them and know there is room for everyone to shine.
[25:41] 5. Living at the edge of your means and not reinvesting. When you start to make money and generate beyond your living needs, that free cash flow can be reinvested rather than making decisions that end up hurting you in the long run. Paying yourself a salary is a good idea as your business increases, instead of immediately increasing how much you pay for a house, car, or fancy toys. You can have those things but reinvest the money first.
[32:15] 6. Not staying true to your culture. It’s easy to get caught up and change your models, but be careful it doesn’t also change the culture. Culture is a shared vision and belief of where something is going, and it may confuse or dishearten the team when they feel a lack of solidarity around it. For us, people know they are getting productivity, execution, model following, and growth. This makes it clear to both us internally and the outside world how we operate.
[36:24] 7. Giving Up Too Early. It’s going to feel foggy sometimes, and even the leader has moments where things seem insurmountable. The more we can play within life and use our experience to service and contribute, the more we can have fun and also get the hard work done. See challenges with lightness, and remember that life is not happening to you, it’s for you, and it will always work out.
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