In this post I’m going to explain the 3 fundamental laws of scale that either prevent, or allow your business to scale.
If you want your business to grow, but at the same time give you more time back and allow you to live a life, then you’re talking about scale. Scale isn’t growth, growth isn’t scale. Scale is the ability to create more income, sales, results, followers etc. The numbers grow, but the effort used to create those larger numbers doesn’t increase.
If you’re at $100 000 in sales, your might want to 10x that result to $1 million in sales. If we just use “growth” as the term to increase that number, we’re only left with 2 options.
Either increase our prices by 10x or work 10x harder. If you’re already working 8 hour days, then working 80 hour days isn’t going to happen. While I agree that prices can increase and you should increase them, you can’t charge $100 for a book that used to sell for $10.
Even if you just want to double a $100 000 business to $200 000 in revenue, you can’t just “double” you efforts. The methods you used to get here aren’t going to get you there.
Hire more sales people? Increase your marketing efforts? Dive into PPC and remarketing? None of that matters without the 3 laws of scale.
“Killer marketing tactic”
Here’s a massive fallacy that marketing experts preach on a daily basis – THIS thing is the killer growth hack that your business needs. The thing that they’re an expert in is what your business needs to “scale”. Many marketing businesses promote a tactic to scale your business. But every single tactic from PPC to SEO, social, remarketing, email, landing pages, funnels, dropshipping, FBA, membership sites, online courses, ebooks, affiliate sales, blog writing, content marketing, Instagram, IGTV and more. All of them fail to address 3 indisputable laws of scale.
If you only have a hammer, everything looks like a nail. When you talk to an SEO expert, SEO will be the perfect tactic to grow your business. More SEO will equal more numbers. If you talk to a social expert, social is the key killer tactic, to growing your business.
None of this matters if you’re not looking at the 3 fundamental laws of scale.
When businesses can’t address all 3 laws (2 out of 3 won’t cut it), they’ll hit a ceiling. Yes, they might hit it at $10m in sales or $100 in sales. But they will always hit it.
Hit the ceiling
If you want to break past that ceiling of growth, you need to incorporate the 3 laws of scale into your business. Businesses that don’t will be forced to work longer hours, harder than they need, to grow a fraction of their potential.
Here’s where things start to get really interesting. At the top of the post I talked about growth in numbers. Sales, revenue, profit, followers, subscribers, traffic. All numbers need growth, but SCALE is what allows us to achieve those same numbers with less effort.
We can run a mile in 10 minutes. Scale is a bicycle. It’s not running faster, it’s not running harder or for longer. It’s a different vehicle. Yes, we can increase that speed to 4 minutes per mile. But a bicycle will get us there even faster.
But if we want to go FURTHER than a mile? What about 1000 miles? Do we just cycle faster or harder? We could do. But I’d rather fly. Scale is realising the limits of our delivery and business model. It’s a wonderful freedom from the shackles of what we’ve always done and allows us to deliver incredible results to our customers through different vehicles.
The 3 laws of scale
- Can I receive 1000 orders tomorrow and handle it?
- Do I have to deliver the results or can someone else?
- Is the process repeatable?
Those are the 3 laws of scale. If you can’t address and answer all 3, you’ll find a limit to how far your business will scale. Everything from traffic to sales, leads, subscribers, opportunities, profit and revenue will have a hard limit.
Let’s say you hire an SEO expert to grow your search rankings. Over time they absolutely smash it out the park and your rankings double, or even 10x (decuple?). You drive 10x more visitors to your site which increases the number of enquires and leads. In which case, your prospects 10x from what they are today.
1000 new orders
Could you handle that? Would you be HAPPY with 1000 new orders today? For some businesses that causes a euphoric wave, imagining 1000 new paying customers that buy their product. For a $1000 product, that’s $1m in sales.
For some businesses however, 1000 new orders causes a cold sweat. They DO need more sales and customers now, but they have no way of handling 1000 orders. It’d cripple their business. Receiving too many orders is bad for some businesses. So which marketing tactic would have worked better? Social? PPC? Email marketing?
None of the tactics we use can solve the problem of dealing with 1000 orders. Hell, most businesses can’t deal with 10 orders a day. The best way we have to deal with this problem is growing the number of staff we have.
Growth to a point
If you had 10 new customers a day for your marketing funnel or website business, you’d hire staff against the deposits from the customers. Problem solved right? What about 1000 orders? We HAVE to think in numbers like this. If you’re happy with smaller numbers, that’s great. But you’ll only ever see growth to a point. You’ll work the same hours and frankly, you aren’t reaching the maximum potential of your business.
To reach 1000 orders a day, or 10 000 or 100 000, you must change the way that you deliver results to customers. The results are NOT tied to the delivery. The results your customers want and are willing to buy aren’t exclusively tied to one delivery process or product. You must think of new ways to get customers results, without sticking to restrictive delivery methods.
If you believe that your customers only want one particular method, you’re wrong. We’ve seen time and time and again that customers do not care about the process. They care about the results. Which brings us onto law 2. If you have to deliver the results, you’ll never scale.
Deliver the results
If your business still requires you to deliver the result to customers, you won’t scale. This is often the hardest thing for businesses to get over, the fear of letting someone else deliver your results. But if we look at the entire process, there are literally hundreds of products and services that you don’t deliver to the customer.
This is the last hold of control that many businesses struggle to let go. It’ll kill your business if you don’t, and the excuses like “no one else can deliver it like me” or “I can’t trust anyone” are entirely your fault. Neither of those are true for a start and 99% of the time they can be solved with a checklist.
If you have a checklist for the scalable process, you’ll find it much easier to hire staff and get others to deliver projects. You absolutely need to have other people deliver stages of the projects. Walt Disney didn’t draw cartoons. Steve Jobs didn’t build the iPhone – hell, he didn’t even design it. Bill Gates didn’t even design the first version of MS-DOS.
Kill your business
Your fear of letting go of control, is what will kill your business. You absolutely must have other people come into the process. From designing, building, support,consulting, sales, qualification. The clearer you are on a process, built around a scalable product, the faster you’ll scale.
Which leads us onto the 3rd and final law. Is the process repeatable? Can you deliver the same results to customers over and over, with no loss in quality or timescale? Can someone else deliver the results to a customer, over and over? McDonald’s has such clear processes and documentation, that every customer all over the world gets the same result over and over.
This process cuts down on time, mistakes and training costs. James Caan famously has every employee keep their job binder with them. It goes with them to meetings and he knows if he has to replace someone, they just have to read through the documentation and they’ll get the results.
You might believe that customers want a custom, bespoke product. They absolutely do not. They think they want that, but what they’re really asking for is a final product that means something to them. They want 99% of a repeatable, documented process and 1% personality.
Custom is expensive
Bespoke, custom products are extremely expensive to make. Even if the price comes down over time, it comes down because more of the process is standardised. Shahinian might make the greatest speakers available, but there is a ceiling to what they can produce. Dmitriy & Co. make outstanding furniture, and I don’t doubt that they make bank, but there’s a limit to the income the can produce with custom furniture.
If they do scale a business like that, it’s because every piece of furniture has a process for building and designing. There are other people building and delivering the work. Your business needs to afford you the time to keep an eye on the horizon. You must act as the captain to your vessel and be clear on the vision. Let others deliver the work and drive the results.
But what if you’re terrified of letting go? If you’re a business that defines itself by the products and services you deliver, it can feel impossible to make that shift. What if you’ve spend thousands of dollars on branding, training and software to deliver those products and services to your customers?
That’s the biggest trap that businesses fall into. Defining themselves by the products they deliver. Businesses that grow, scale and succeed define themselves by the market they serve, not the products they sell. By focusing on the market that you serve, you can deliver killer results without tying yourself to a delivery process.
Results are not tied to delivery. The transformation you can help deliver to your customers is not exclusive to one delivery method. You can help someone sell more, drive traffic, lose weight, get faster, save money, travel more and anything else with books, courses, coaching, software, packages, deals, consulting, templates, worksheets, podcasts, video, blog posts, affiliate products…the list goes on.