It feels like it refers to the same thing – after all, both growth and scale refer to an increasing in size.
However, to entrepreneurs, there’s a key difference between growth and scale. The key difference is the ratio between revenue and expenses.
Growing has a tightly constrained ratio between revenue and expenses. That means as revenues rise, expenses rise in tandem.
Growth Companies: That’s how you get really big companies doing $10m in revenue but having $8m in expenses too, leaving them with just $2m in gross profits.
In growth companies, revenue is a fancy metric, because when you look at their bottom line, there is comparatively little profit to show.
Scaling breaks this ratio between revenue and expenses. With scale, you see an increase in revenues but a much reduced increase in expenses, if any.
Scale Companies: Another company who has also scaled up to $10m in revenue might only have $4m in expenses. That means the company has a gross profit of $6m.
In this example, both companies have revenues of $10m, but their gross profits are vastly different. That’s the difference between a business in growth mode and a business in scale mode.
To be really free of your business so that you can be working on it, instead of working in it, you have to be focused on scaling up your business instead of remaining stuck in growth mode.
Evolving Over Time
It’s not necessarily the case that growth is bad. It’s just that it’s a necessary stage that all businesses need to go through. While being in scaling mode is optimal, it’s not something that you can do immediately on day 1 (or day 500 even).
There are other more important areas that you will need to handle as an entrepreneur. Sometimes all that you need to do when your business is in its infancy is to survive!
The following table shows the constraints and focus areas of a business as it progresses over time and through the stages.
The Methodology To Scaling Up
I have personally went through the process of bringing my business from $0 to $30m. However, my journey was not a straight line between $0 and $30m. In fact, it was a lot of ups and downs and sometimes I was completely off-track.
Imagine if you wanted to go from your home to your local McDonald’s. It should be fairly easy and straightforward for you. Your local McDonald’s might even be next door! But that’s not how things are like when you are trying to scale up your business.
A better analogy is to imagine that you are trying to get to a McDonald’s, but now you are in a completely foreign land. Oh, and you are also without a phone, GPS, map, compass, or any other tool. That’s pretty much how it felt like trying to scale up a business myself.
I was wasting years making expensive mistakes before I realised how to get unstuck. Eventually, I found my way, and only then was I finally able to scale up my business properly.
I’ll show you exactly how I’ve managed to Super Scale my business, and how you can Super Scale your own business too. I call this Super Scaling methodology the 5E Scale Engine, and it’s made up of 5 pillars: Evolve, Envision, Empower, Engage, Execute.
The 5E Scale Engine covers everything from the mindset that you require to the operational systems that you need in order to break free from your daily grind so that you can start systemising and scaling up your business.
How To Choose Digital Marketing Channels: Finding the right marketing channels can produce big results for your business, resulting in a surge of leads and revenue. And if you’re an early adopter of an effective channel, it can give you a serious head start on your competition.
Initial users of Google Adwords and Facebook advertising were able to generate big results at a relatively low cost before those channels became saturated.
But how do you find these highly productive marketing channels?
With so many options available, it can feel like an overwhelming task. Should you focus on SEO or PPC? Podcasting or videos? Social media or blogging? How can you know where to invest your time and money?
In this guide, we’re going to walk you through the process of finding, testing, and growing your marketing channels.
Ready? Let’s get started.
Test and Experiment
The first step in finding effective marketing channels is testing and experimenting. You simply won’t know if a marketing channel will work for your business unless you test it. You have to constantly experiment, testing a variety of channels until you find the ones that really drive significant results.
How can you find these different marketing channels? Several ways:
Analyze your competition – Digital marketing tools like Ahrefs and SEMRush can give you a sense of what your competitors are doing with SEO, content marketing, and PPC. The Facebook Ad Library can give you insight into the types of social media ads they’re running. Look at the most successful businesses in your space and determine what marketing channels they’re using. Can you make those same channels work for you?
Analyze your audience – In many ways, your audience will dictate which marketing channels you choose. You want to focus on the channels your audience uses. If your audience is young, you may want to consider a platform like Instagram, since it tends to be favored by Millennials and younger. If your audience is older, you may have more success using Facebook or even direct mail. If you target business professionals, your best choice may be LinkedIn or email marketing.
Analyze your own business – Some marketing channels may be a better fit for your business than others. If you run a service-based business, you may want to focus on local SEO so that you connect with customers in your area. If you’re a SaaS company, you may get the most benefit from social media advertising.
Analyze current trends – Websites like Hubspot, TechCrunch, and AdAge can help you be aware of current marketing trends and potentially untapped marketing channels.
The bottom line is that you won’t know if a channel works until you actually test it. Identify the channels that you think will be the most profitable and then begin testing and experimenting.
Give Sufficient Time and Effort
When testing a channel, only evaluate the results after you’ve given enough time and resources to it. This will look different depending on the channel. SEO requires a fair amount of time and effort before you will start seeing significant results. With PPC, on the other hand, you can generate results much more quickly.
Be realistic as you contemplate which channels to use. Don’t start using a channel unless you’re willing to use it for a sufficient length of time and invest the appropriate amount of effort.
Also, don’t give up on or dive into a marketing channel until you’ve done a sufficient number of experiments. If you’re doing PPC, create numerous variations of and target audiences for your ads. If you’re doing email marketing, A/B test various subject lines, calls-to-action, and formats. If you’re focusing on video, test different lengths, titles, meta descriptions, etc.
If you don’t thoroughly experiment with a channel, you may end up abandoning it prematurely.
Focus Your Efforts
You may be tempted to jump into five different marketing channels at once, but don’t do it. Several reasons for this.
First, you’ll end up getting spread far too thin. You’ll end up only being able to spend a small amount of time on each channel, limiting the value each channel provides. As a result, your marketing campaigns will be mediocre at best.
Imagine trying to simultaneously create PPC ads, emails, blog posts, podcasts, and webinars. Unless you have a large team at your disposal, the quality will be very low or you simply won’t get everything done. You also won’t be able to effectively engage with your audience, which is especially important with most forms of digital marketing.
On the other hand, when you focus on a single channel, you can master it. You learn the ins and outs of it, and you discover which strategies are most effective. The more you master a channel, the higher your ROI and the lower the cost of using that channel becomes.
Second, trying to manage a bunch of new channels at once is chaotic. You’ll feel overwhelmed as you try to create content, analyze the results, and optimize your efforts. You’ll miss key details and will probably fall behind on things. You’ll get burned out and will be tempted to throw in the towel.
Focusing on a single channel allows you to give it all your attention. You can ensure that everything is working as it should be and that nothing is slipping through the cracks.
Finally, focusing on one channel at a time is much more cost effective. If you pour money into a bunch of channels at once, your ROI will be significantly lower and you’ll blow through your budget much faster. When you focus your efforts, you can get the maximum results from your budget.
Double Down On What Works
Your results will probably vary wildly depending on the marketing channel you choose. Some of your experiments will be spectacular successes. Others will be abject failures. Still others will produce only mediocre results. That’s why they’re called “experiments”.
In order to know which channels are most effective, you need to closely track your results. If you can’t determine the ROI of a particular marketing channel, you have no way of knowing whether it’s really working for you. You need to know how much it costs you to acquire a new lead and then convert that lead into a paying customer. You need to have a clear understanding of how leads flow into your marketing funnel and translate into revenue.
Additionally, you need to know your Customer Lifetime Value (LTV). Knowing your LTV allows you to determine exactly how much you want to spend on customer acquisition. For example, say you sell a product for $10. If you only focus on the initial sale, you won’t want to spend more than $10 to acquire a new customer. However, if you know that your LTV is $100, you can afford to spend much more on customer acquisition.
Obviously, if a channel is a spectacular success, you should double down on it. Invest more time and money into the channel while still closely tracking your results.
If it’s a spectacular failure, then you probably shouldn’t keep investing in it. Focus on other, more profitable channels.
If the channel produces mediocre results, then you have a decision to make. You can try to continue to optimize the channel in hopes of getting better results or you can focus your efforts elsewhere.
Optimize Your Campaigns
Once you’ve identified an effective marketing channel, you need to optimize your marketing campaigns. In other words, you need to keep testing and tweaking your efforts so that you continue getting maximum value from the channel.
If you don’t keep optimizing, your campaigns will grow stagnant over time. People will stop responding to your marketing efforts. Keywords will become unprofitable. Specific headlines and images will stop being interesting to customers. Competitors will move in, saturating the channel and making it harder to stand out.
The bottom line is that you can’t put your marketing on autopilot. You have to continually be looking for strategic ways to improve your marketing and separate yourself from your competitors. You need to think outside the box and not simply do what everyone else is doing. Just because something has worked well in the past doesn’t mean that it will continue to work well in the future.
Do The Work
Identifying effective marketing channels takes a significant amount of time and effort. Running multiple experiments isn’t necessarily easy. Constantly tracking and analyzing your results requires commitment. Consistently optimizing your campaigns so they don’t stagnate is no small task.
But the work is worth it. When you find the right marketing channels and create highly effective campaigns within those channels, you get outsized results. You can drive growth in your company like never before. If you look at the most successful companies, they all have a commitment to finding highly effective marketing channels and then leveraging those channels for all they’re worth.
So do the work. Run the experiments. Double down on what works and cut out what doesn’t. Optimize until you’re getting max value from a channel. And repeat.
One of the grails of entrepreneurs and business owners is to increase business efficiency. After all, time is our scarcest resource.
If you’re trying to scale your business right now, you must know the feeling of being strangled for time.
That’s how I felt when I was scaling Vodien. Everything in your business is demanding time from you and as a result, time becomes such a scarce resource.
I felt so frustrated at the shortage of time that I started looking at how best to manage time, free time up, maximise productivity, and increase business efficiency.
I wanted to squeeze every single amount of productivity out from the time that I was spending on my business.
It’s difficult to do because there are so many moving parts in a business and things change all the time.
If you are doing things ad-hoc and reactively most of the time, I can assure you that you’ll soon get overwhelmed, because that was exactly what I did initially.
The only way to improve things is by having a systematic approach when you’re thinking about how to increase business efficiency.
Systematically Improving Efficiency
If you have the mindset of being systematic in order to increase business efficiency, you start developing structure and sustainable ways to make permanent improvements in your business.
This was one of the more important concepts that allowed me to transform and scale up Vodien successfully.
I call the methodology that I use to create this hyper-focus to increase business efficiency the ARSAD funnel.
The ARSAD funnel has these 5 steps: Analyse, Remove, Simplify, Automate, Delegate.
The first thing that you need to do is to take a step back and analyse the work that is being done in your business.
A good way is to do this is with every person in your organisation, individually.
Everyone will have to log all the tasks that they’re doing so that the type of tasks and the the time used for each task is clear. With this, you can spot the inefficiencies and the areas of improvement.
The easiest areas to increase business efficiency can be found in recurring tasks and the tasks that take up too much time.
It’s crucial to understand where time is being spent, and then you can move on to answering the following questions:
What are the assumptions that you have with regards to the tasks, why they exist, and their utility?
What is the purpose of every task, and is this purpose being met?
What tasks are being done regularly?
How long does each task take to completion?
Next, you need to look at doing is removing any process that’s unnecessary or low-impact. This is essentially trimming the fat from the operations in your business.
I find this an absolutely crucial first step to take, and I don’t see enough people following this sequence of action. Too many people look at automation or simplification or delegation first, which ends up overly complicating matters.
The importance of the sequence reminds me of road bicycle racing enthusiasts. In road cycling, the weight that the cyclists carry affects their cycling speeds.
Some road cyclists try to improve their cycling times by investing in really expensive gear, such as carbon fibre parts in order to reduce the weight of their bicycles. These parts are typically very expensive, but can result in 50%-500% savings in weight.
However, because bicycles aren’t very heavy to begin with, these percentages translate into absolute amounts of a few hundred grams.
It boggles my mind, because these same cyclists aren’t the leanest that they can be. If they lose some body fat, they can get much more weight savings.
This not only makes the weight on the bike lower – it’s cheaper than buying expensive gear, and much better on your health and fitness.
But it’s the same thing as scaling up businesses and trying to increase business efficiency. Losing body fat is painful and not as fun as buying new gear. However, the ones who truly are committed and dedicated to improving themselves will do it.
I can guarantee that not everything is necessary in your business operations. You might find that you might even be able to close down entire product lines and come out leaner and faster and more profitable as a result.
Here’s a simple example. One of the things that we removed was the payment method of cash. Cash was something that we thought was a requirement to deal with traditional businesses.
However, cash, as a payment method, was a hassle. We needed someone to attend to the clients who came down physically to hand over the cash payment. We had to count the cash accurately and provide accurate change. We had to hold an amount of cash in the office as a result also, and spend time depositing the cash at the bank.
Besides the time that was required for this whole process, there was also huge risks of human error in counting the wrong amount of cash, or of theft or loss.
We decided to take the plunge and remove cash as a payment method, thinking that we could re-introduce it even if it failed.
We never had to.
All the objections that we thought we’d encounter, all the business that we thought we’d lose out on, they all didn’t materialise.
What happened was we achieved great improvements in risk, efficiency, and productivity instead.
Find out what assumptions you’re running on, and test to see if they’re valid. It could save you tonnes of time and resources when you’re trying to increase business efficiency.
Once you’ve removed all the tasks that aren’t necessary or are distracting your business from its goals, you have to now simplify whatever tasks that are left.
Simplification is an art. A lot of times, things get more complex over time. I’m sure you’ve experienced a brand new computer being super fast, but slows down considerably over time.
That’s when you have to start cleaning up your computer and removing unnecessary junk.
Left unchecked, business processes are the same. You’ll need to simplify and streamline processes so that they can run optimally.
Here are some steps that you can follow in order to optimise your processes so that you can increase business efficiency.
The way to start is to clean up all the clutter and organise everything clearly. Take a look at your processes and have everything mapped out.
See if there are convoluted processes or processes needed unnecessary steps.
A good example is asking for approval. For example, perhaps you can state that all expense claims for amounts less than $10 can be automatically approved.
This will not only save time for your employee but for your administration department.
In addition, make sure ownership is clear for every step of your processes. Never put a team or have multiple owners for any step. This will ensure clear ownership and responsibilities, as well as reduce confusion.
Match the right task with the right talent
Your processes might be perfectly structured but might still be sub-optimal because of the people who are working on them.
Maybe you don’t have the right talent in your company because your hiring processes are flawed.
Maybe you have the right talent but they aren’t at their full potentials because they aren’t getting the right training, or your leadership isn’t optimal.
Whatever the case is, you need to fix it in order to increase business efficiency. Get the right people working on the right tasks, and you’ll see an immediate improvement.
Evaluate processes regularly
Processes aren’t fixed in stone. In fact, as a business scales up, it is normal to find that it outgrows previous processes.
Therefore, you need to regularly review processes to see if they can still meet their objectives efficiently.
A lot of companies have embraced the policy of “unlimited leave days”. This means that leave days don’t have to be tracked.
This makes sense because after all, the organisation doesn’t really care about how many days the employee is around. Instead, the employee’s is appraised based on how well he/she performs.
This means that if the employee is away for half of the year, he/she likely won’t have the performance to fulfil their job scope and will be terminated anyways.
Therefore, being intentional and evaluating your processes for the intent that you want can greatly simplify things.
Remember also that while systems may be led by you, processes are run by your team members. Get their feedback about processes regularly and understand if any processes are broken or need improvement or deeper investigation.
Promote better communication
Good communications is essential for good teamwork. If you can’t communicate well, you can’t increase business efficiency.
If you’re doing things by yourself, communications is pretty easy — hopefully! After all, you only have to make sure that you understand what and why you’re doing things.
However, introduce one more person to work with, and it gets much more difficult. Introduce a team, much less a large team, and it becomes exponentially difficult.
This all has got to do with the difficulties of communicating. There are many ways to improving this, or at least, making it no more difficult than it has to be.
The first thing to do is to ensure that everyone on the team shares the same values and believes in the company’s vision. If there is a fundamental misalignment in values or vision, then it makes communications even more difficult.
As an extreme example, if you are running a steakhouse, then perhaps hiring a vegan might not be the best fit for your team.
You have to understand that communicating intentions and decisions are probably more difficult when there is a fundamental conflict in an individual’s way of living and the business’s vision.
In more every day situations, we have to ensure that our hires match the values and vision that our companies have.
Secondly, invest time and effort into creating communication systems. This doesn’t mean software systems. It just means having a standardised way of communications.
Only having meetings with clear agendas and objectives
Ensuring meetings have a facilitator, who also ensures that meetings do not overrun
Having guidelines on how projects are detailed so that there’s low chance of misunderstanding or miscommunication
Having a meeting cadence for regular communications upstream and downstream
Use common file naming conventions. E.g. (company name)(document type)(date), which results in ABC_Pte_Ltd_Proposal_051420. This removes the mess of having many individual naming conventions in your company, resulting in people being able to find and identify files easier.
Use common file repositories, like a shared drive, or cloud storage.
If need be, you should invest in communication software that promote the right kind of communication, such as chat software or project management software.
Software can potentially help increase business efficiency, but be careful of how you go about doing it: software should always be seen as a tool, not a solution.
Super Scaler Pro Tip: Don’t purchase software with the intent for it to be a solution to solve your problems. Always try to fix problems manually or the non-scalable, tedious way first, then invest in software that enhances your current working methods.
For me, automation is fun! Personally, I don’t like doing manual and time-consuming processes, especially if they happen on a recurring basis.
These sort of tasks are perfect to be automated using technology. Sometimes maybe the activity can’t be automated easily, but you can automate the decision process or the trigger for the activity.
The key is to break up the processes and find the easiest parts to automate. These are your “low-hanging fruit”, so always start with them first.
You don’t even have to be an automation expert. Google for more information about basic processes that you’d like to automate. For example, you can try:
How to automate report generation in Excel
How to automate PowerPoint slide creation
How to automate logins to a website
How to automate a file download
When you get bigger, you can even hire developers to help you with larger-scale automation projects. These can really help increase business efficiency dramatically!
In Vodien, one of our core functions was customer support. To augment the manpower that we had supporting this function, we built an automated troubleshooting wizard.
This helped our customer support officers by automating the process of troubleshooting and identifying common faults with customer accounts.
This greatly reduced the time it took to handle customer requests. Not only that, it greatly reduced human errors, and improved customer satisfaction.
The very last component of the ARSAD funnel is Delegate.
Efficiency is obtained by having the right people do the right tasks. You can’t increase business efficiency if the wrong people are working on the wrong tasks.
Delegation should be a key consideration for anybody in your organisation. If someone else can do your job better, delegate the task to them.
I grew up in a family that valued hard work and grit. When I started Vodien with my co-founder, the two of us would handle and do everything that was necessary – accounting, marketing, finance, sales, product, research and development, literally everything!
When the business grew, I had trouble initially wrapping my head around letting go of my tasks. I used to think that delegating my tasks away would mean that I’m lazy.
However, on the contrary, it was actually the more responsible thing to do. My role as CEO wasn’t to be busy. My role was to grow the company, and I couldn’t do it if I was bogged down by doing day-to-day tasks.
This is especially true of your leadership team, not just the CEO. If any high-level executive is actually spending their time designing graphics or writing copy or anything like that, then your business is not utilising your manpower well.
If you find that you are the only one able to do the work, then you are the bottleneck in your company.
You should immediately look at hiring or developing a system around that task so that you can have that functionality handled by someone else in the company.
Find ways to delegate tasks so that you can focus on the higher-impact tasks. Your organisation will come out stronger as a result.
Increase Business Efficiency
The way to increase business efficiency is not by ad-hoc or one-time tricks and tactics.
The focus on increasing productivity and efficiency in a systematic manner is fundamental to the successful transformation of your business operations.
The top CEO tasks to scale a business: These are absolutely crucial. You must realise that the CEO is likely the highest paid employee, and as such, his time must not be deployed on low-impact tasks.
The founding entrepreneur typically transitions to be the CEO of the business. However, this may or may not be a permanent move. One of the things that can happen is that the organisation hires a CEO for the business. In that case, the entrepreneur may take on other roles or may just remain on the board instead.
One good example of a non-CEO founder is Ben Francis, who is the founder and majority shareholder of Gymshark. You may or may not have heard of Gymshark before, but you should find out more about it because it’s a modern day David and Goliath story. I love its story, because Gymshark is a fitness apparel and accessories brand founded in 2012 that managed to tremendously outperform the traditional big brands like Nike, Adidas, and Under Armour.
To give you perspective, this is a business that’s founded by a 28-year-old former pizza delivery boy, and in 2020 is valued at more than £1 billion. A large part of the business’s success is due to its social media following, and it is significant. It has 4.7 million followers on Instagram, and more importantly, has cornered a lot of the fitness influencer market, which was how the brand got popular.
The thing is, Francis has been Gymshark’s chief brand officer since 2017. When asked why he hired someone else to come in as CEO, he said succinctly: “You’ll need to set your ego aside and ensure the business is always put first, and the people strongest for each role are in those roles.”
When Vodien grew, my co-founder and I started finding the roles that were best suited for our own strengths and personalities. I became the CEO of Vodien, and my co-founder became the COO, and together we complemented each other and made things work.
Despite having roles, it’s still clear that it’s a team effort. We would still help each other, and discuss everything, but we were clear about what roles meant. With roles, ownership of tasks and the final decision-making is left to the role.
The CEO’s top priority is to scale up the business. I see the CEO role as a big responsibility that comes with major sacrifices. I believe in servant leadership, and the CEO role is the greatest servant of the organisation. This is something that you’ll need to be doing for your entire team and your customers.
I know some people who might see it as a prestigious appointment, but make no mistake, if you’re CEO, then you’re the strategist and visionary who is supposed to lead your organisation to success. There might be prestige that comes with a successful job, but it will not be easy or without its sacrifices.
The best way I think about leadership is that it changes the default case. If we let things happen by default, or in other words, we don’t do anything, then some things will still happen. Leadership, particularly effective leadership, changes that default case to something that’s desirable to the leader and the organisation. That’s leadership.
In terms of organisational planning, you must realise that the CEO is likely the highest paid employee. The CEO of a business is typically paid higher not because of the difference of hours worked as compared to the rest of the team, but the difference of the results that the CEO brings. As such, the CEO’s time must not be deployed on low-impact tasks.
This point is tremendously important. It means that if you are the CEO, and if you are spending your time on tasks that anyone else can do, then you are wasting valuable time and resources.
That’s why a CEO must be crystal-clear on what he needs to work on, especially when trying to scale up the company.
Owning the vision is a key fundamental responsibility of a CEO. It is why it’s also an essential part of the 5E Scale Engine that I teach to entrepreneurs to scale up their businesses.
Owning the vision means the creation, iteration, and evolution of the vision over time. As you can imagine, this is not something that you can do if you’re not living and breathing the business.
Besides this, here are 10 other critical tasks that the CEO will need to handle. You might notice that these tasks are very different if you are a 6-figure CEO as compared to a 7/8-figure CEO. These are the tasks that you’ll need to handle as CEO, when you are Super Scaling your business.
10 Uncomfortable CEO Tasks To Scale A Business
Communicating the vision: This isn’t a small task. You need to tell everyone about the vision, because people are not mind-readers. And it’s not just repeating words off a page – you need to communicate the passion behind the vision, and the exciting future that it entails. Do this for everybody, but primarily for both your team and your customers.
Owning the business strategy: Businesses are huge, complex beasts. It doesn’t help that they exist within an even more complex ecosystem. Your business needs a strategy, and this must be driven by the CEO. You should have the 3 pillars of a sound business strategy: Near-term, Mid-term, and Long-term.
Be the public face of the company: this means taking on all marketing, public relations, and communications. You’ll need to be present on all kinds of media that are relevant to your target audience: traditional media and social media.
Develop strategic partnerships: This is something that the CEO is best-suited for. You can engage with CEOs and top management of other companies so that you can form partnerships.
Mergers and acquisitions: Organic growth is good, but don’t forget about inorganic growth through mergers and acquisitions. This can be for expanding revenue, acquiring market share, technology, intellectual property, or talent. As the CEO, you should be thinking, considering, and hunting for these deals.
Build systems: You are the only one in the business who has a clear oversight of all departments and functions. Only you can spearhead initiatives and systems and drive the implementation.
Recruit and grow an A-star team: One of your main roles is to build up a team. This means recruiting, onboarding, training, and progressing your employees. If systems are not in place yet, then you have to take care of this yourself personally.
Resolving bottlenecks within the company: Change is a constant, and the other constant is bottlenecks. With any business, bottlenecks will form within your operations. Even department heads can’t solve them, especially if it spans across multiple departments. As CEO, you need to be the one actively putting resources to resolve these bottlenecks.
Managing and raising capital: You should have a finance team, but the ultimate oversight of your business’s finances should lie with you. That means management of cash-flow and large expenses. In addition, if the business requires capital, you will need to be the person raising it.
Developing products: You founded the business to solve a market gap. That market gap will change, so don’t neglect this. Your product and service must evolve with the times and changing customer needs. You might find that you have to create better pricing, better features, or even completely new products or product extensions.
These are the 10 critical responsibilities that a CEO must bear. These are fundamentals that apply to any business. In fact, depending on the business that you’re in, there might even be other tasks that the CEO needs to focus on to scale up the business.
When scaling up your business, one of the other things that you can do is to use the ARSAD funnel to ruthlessly increase business efficiency, and focus on the tasks that truly bring your business forward.
This guide has everything you need to know about scaling up your business.
So if you want to learn how to scale up your business, you’re in the right place.
About the Author
Hi everyone, I’m Alvin Poh.
I started a hosting company from $0, and grew it to Singapore’s largest, with 35,000 clients and a team of 150. I sold the business for $30 million, and went travelling around the world.
Today, I’m going to show you why you need to focus on scaling up your business, how to do it, and the common mistakes that entrepreneurs make while trying to scale up their businesses.
Scaling Up Your Business: Growth vs Scale
There’s a big difference between a company in growth mode and a company in scale mode.
Growth only means increased size. Scale means increased size, exponentially. The limits are your overheads.
Vanity metrics are metrics that seem to be useful, but are in reality just metrics that make you feel good without any actual use. In companies that are in growth mode, it’s common that vanity metrics are prioritised instead of actionable metrics.
Vanity metrics are things like more revenue, more clients, more employees, or more offices or office space.
An actionable metric is more exciting and interesting. An example of an actionable metric is your net profit.
Smaller businesses get into the dangerous trap of focusing on growth, which results in growing the business in size, but having little or even negative change in profits. Yes, their business might get much bigger, but their profits decline!
When you break away from growth mode and go into scale mode, you focus on increasing revenue with minimal (or none at all) increases in your costs.
The way this is done is by systems. Systems are the only way to exponentially grow by allowing you to handle more revenue without increasing your costs proportionally.
Challenges of Scaling Up Your Business
Once they have been growing for a period of time, business owners need to switch to scale mode ASAP. This is urgent because of two main issues that plague most businesses when they are in growth mode:
Almost everything has been done manually or on an ad-hoc basis
Everyone wore multiple hats and handled everything
If these 2 areas aren’t resolved, the business will continually feel like it’s going nowhere.
Work piles up. You and your employees get frustrated and frazzled. You take on more clients but lose drastically more time and don’t make much more profits.
That’s why you need to commit time, resources, and effort into making sure that these following areas are your priorities.
Common Mistakes While Scaling Up Your Business
There are many mistakes that businesses make as they try to scale up. These mistakes are common, and cause the business to suffer from delays, stagnation, spinning its wheel aimlessly, chaos, and possibly even catastrophic business failure.
93% of startups that scale prematurely never break the $100k revenue per month
Startups that scale properly grow about 20 times faster than startups that scale prematurely.
Fortunately, if you approach scaling in a systematic manner, you can make the right preparations so that you don’t make the following mistakes. If you can find a mentor who has done it before, you can save tremendous amounts of time, money, and grief.
Spending too much on customer acquisition before validating product/ market fit
Overcompensating for missing product/market fit with marketing and press
Spending in poor-performing customer acquisition channels
Building out a product without having validated problem/market fit
Spending time and focus on “nice to have” features
Hiring too many people too early
Hiring expensive specialists before they are critical
Hiring managers instead of do-ers
Hiring fast and firing slow
Not having a regular feedback loop
Not adapting business model to a changing market
Managing instead of leading
Owner not letting go of roles
Scaling Up Your Business The Right Way
Transitioning from a growth company to scale company will not be an overnight thing. You’ll need to be committed to the process needed for scaling up your business, and be ready to embark on doing these things.
Commit to scale
The first thing that you need to be prepared for is having a vision. This vision answers the “why” behind all you’re doing to scale up your business. You must have the desire to really impact your industry and customers.
This desire must be big enough for your business to scale up to. If your vision is only to make a salary of $10,000 a month for yourself, then scaling up might not be for you. If, however, you have dreams of providing for your entire team of 30 and being the top brand in your niche, then wanting to scale up is perfectly aligned with you.
A Vision For All To See
The one thing that binds a team together and keeps everyone working in the same direction is a vision.
This needs to be communicated to everyone in your team, from their first hiring interview and regularly after that.
How do you do that? You’ll need to create the tools and systems that allow you to achieve this in the fastest and most structured way.
Assign Clear Job Responsibilities
In growth mode, your business would typically need help everywhere. That’s fair – work loads haven’t grown enough to justify full-time employees working on them.
As a result though, your team members don’t have clear accountabilities. In scale mode, you have to quickly switch to building up systems to resolve all these legacy methods.
Shift from Brute Force To Scalable Systems
When scaling up, your business becomes a different kind of animal. You’ll also notice that decisions are more complex, and involve more stakeholders and consequences. In addition, your business growth will demand for more cash also, stressing your cash-flow.
These problems cut across IT, marketing, fulfilment, and other departments.
This is why systems must be properly built and introduced into your business. Manual, ad-hoc processes are no longer sufficient to handle your business’ evolving demands.
Systems are repeatable processes that people can follow. This reduces human error, frees up manpower, increases productivity, and releases resources. Focus on investing in IT and training to help you achieve this.
When businesses do not switch properly to scalable systems, service quality and fulfilment times suffer. When this happens, businesses spend more money to throw manpower at problems, and spend increasing amounts of time on fighting fires.
Systems are the bedrock to scaling businesses, but people are necessary for driving those systems, strategy and innovation. The key is to find the right people to fit the right roles in your business.
You’ll need to evolve your HR systems to ensure a proper onboarding. Roles and responsibilities are more complex and no longer something that new hires can understand by “just diving into it”. Onboarding also means that you need to ensure and track that your new hires are performing well in the roles that they’re in.
Having scalable systems doesn’t mean that you will no longer need manpower.
Scalable systems mean that your manpower will be effective and productive. You will still need to have capable people in your business.
You, and the people who grow with the business, must also evolve to match the leadership demands. Most businesses find that the people who performed well in the past, no longer perform in scale mode.
That’s why there is always a pressing need to attract the right talent and retain them. A right talent is basically the right kind of person in the right kind of role.
In growth mode, you’d be focused on core functions such as developing your product, finding whatever sales you could, and marketing. In scale mode, you’ll need to develop those further, and in addition, start looking at non-core functions such as administration, payroll, accounting, and HR.
Become A Leader
You might have founded and grew your business till this point. However, scaling up a business requires you to evolve with it as well. What used to work for you in the past will not be sufficient when your business scales up.
One of the facets that you will need to have is great leadership skills. To improve this, start finding mentors, reading books, taking courses, studying great business people, and join entrepreneur communities.
Collaborate With Others
No scale company exists by themselves. Collaboration is one of the keys for scale. You will need to build up collaborative partnerships within your company, and with partners, suppliers, complementary service providers, and customers. This creates a network of value, which feeds your business.
Engage Your Customers
Detail your customer journey and ensure that you improve every step of it. This includes things from increasing effective marketing campaigns to improving customer satisfaction. This results in an turn-key, holistic view of your entire business.
Scaling Up Your Business
You were the founder and you did a great job of growing your business. To scale, don’t be the person still in charge of everything. Let your people take over responsibilities from you so that your time is freed up for strategic work instead.
Don’t make grave mistakes such as hiring the wrong people. It will drastically and negatively impact your business. This is just one example of the wrong things that you can do that will drive your business further into chaos.
Focus on the sequence of scaling too, because doing things in the wrong sequence will cause you to be even further away from your desire to scaling up your business. The big lesson: DO NOT efficiently execute the irrelevant.
The journey to scale up your business is a rocky and uncertain one. Look for help and support before you come across obstacles.
You want to be prepared for the unknown. Never test your reaction only when the situation demands of it. Remember that you don’t know what you don’t know.
There are entrepreneurship coaches, mentors, and communities out there that have gone through the whole journey. Learn from their experiences and lessons so that you don’t have to suffer the same mistakes.
Find out more about how my 5E Scale Engine can help you scale up your business by grabbing my free playbook.
It’s an uphill struggle to even find the right candidate, much less how to transform new employees into high-performers. Looking for someone to fill a role can take weeks to months – and that’s if you’re lucky!
I know I spent weeks and months trying to fill roles. Sometimes there’s a pressing need for talent, so every passing day feels like a wasted opportunity.
Once you do find someone and hire them, isn’t it then time to break out the champagne and take a break?
Not so fast. Hiring someone is not the end of your duties as the boss. In fact, it’s just the beginning. The onboarding process is something that very critical to empowering your new employees, so make sure you don’t neglect it.
One of the greatest things that you can do in the onboarding stage is to explain the “Why” to your new employee. When you do this, it helps your new employees connect the “Why” to the “What” that they are doing.
You’ll need to explain these 5 things to your new employees.
1. Explain Your Vision of The Company
Don’t expect people to be mind-readers. You need to tell your team why your company exists and what is your vision for the company.
This is especially important for new employees. Tell them what your company’s vision is, your company’s value proposition, and how your company is different from your competitors.
2. Explain The Relationship To External Stakeholders
Next, you’ll need to connect the new employee in this grand vision of yours. Walk your employees through their job responsibilities, and show them how their efforts matter to your customers.
The stronger that you can paint this picture, the greater the feeling of connection that your new employees will have.
This gives your employees a clear idea of why they’re doing the tasks they’re doing.
3. Explain The Relationship To Internal Stakeholders
A role in a company doesn’t exist in a vacuum. There are other roles, oftentimes in other departments, that depend on that role.
This is clear to management and to the boss, but not as clear if you’re an employee.
For example, it’s hard for Engineering to think from Finance’s point-of-view when Finance isn’t approving new hardware purchases. It’s much easier and much more common that people think everyone else is just trying to give them a hard time.
4. Explain Their Responsibilities
Don’t assume that doing all of the above is sufficient. Your new employees need to know how exactly to do their roles.
This is where you need to explain your expectations, and check that they understand and agree to them.
Once that’s done, you can have a system of checking in every few weeks to ensure that things are moving along smoothly. This is typically done with a monthly pulse, or a monthly review.
This gives your new employees an avenue to feedback their thoughts about their work as well, and to raise any concerns that they might have.
5. Explain Why They Were Chosen
This is a great opportunity to show your new employees that they weren’t just chosen out of desperation or luck. Tell them the exact reasons why they were ultimately chosen from the list of dozens of candidates.
If you have done your Job Description well, this point should be easy to pinpoint.
Every employee will appreciate this, because you’re praising them for attributes that they uniquely have. This reinforces why they’re a great fit for the role, and gives them validation to perform well at their role.
Transform New Employees Into High-Performers
Doing the 5 things above will set you apart from others, and most importantly, really empower your new employee hires. After all, you don’t want just random individuals in your team. You want high-performers who are effective and productive, and who are working together with you towards your company’s vision.
The 5E Scale Engine came from true personal experience. I bootstrapped a web hosting company when I was 17 years old with no money down. It took pain and sacrifice, but I grew into the most popular product in Singapore, with tens of thousands of business owners as our happy fans.
On July 2017, I sold my company for S$30 million. I like to call it an overnight success that took 17 years to build.
After I sold the company, I felt strangely lost. I realised that a huge part of my identity was tied with the company, and selling it off had made me lose a part of myself.
I decided to embrace minimalism, sell off all my possessions, and go travel the world. While I was travelling, I had people approach me for mentorship, and I helped them.
Over time, I discovered that the lessons and experience that I had were invaluable in transforming the lives of my mentees. These were specifically the business and entrepreneurship scaling frameworks and systems that I used to grow my own business.
Next, I decided to spend several months distilling the lessons that I had gone through in my decades of entrepreneurship into the 5E Scale Engine.
How Does The 5E Scale Engine Work?
The 5E Scale Engine is a methodology to systematically grow and scale your business efficiently.
Most marketers focus on numbers and the latest traffic techniques. The 5E Scale Engine doesn’t, and instead, focuses on what truly matters on a fundamental level.
This isn’t a get-rich-quick scheme. In fact, it's the complete opposite. It will take time. You will need to put in lots of hard work. And it will be difficult.
However, your business will then be able to scale up efficiently. And you’ll be enjoying the process because it's difficult but rewarding.
One thing that I never liked was sales. I always thought that sales was slimy and pushy and all about using the right closing techniques.
The 5E Scale Engine avoids all of that. Selling becomes fun, easy, and something that you look forward to because you’re now providing value to your customers – Value that they actually desire, and want to get from you.
With the 5E Scale Engine, you learn how to scale past 7 figures, become the top in your field, and serve a tribe of grateful clients.
This will change your life. I know because it changed mine – this will allow you to have great clients, a sustainable business, free time for yourself, and increased profits.
Are You Suitable For The 5E Scale Engine?
If you’re someone who can benefit from 5E Scale Engine, these points will describe you:
You’ve put in the hard work to grow your business from nothing to 6-figures or more
You find that growing your business is difficult and is getting more difficult week by week
Your business is doing 6-figures or more, but you’re not feeling successful at all
You are starting to drag your feet to the office and replying clients
You’re marketing your company the way all the online articles tell you to, but you’ve only gotten more tired
You don’t know where your next client will come from
You want more revenue, but dread having more clients
You have less of a life the more your business grows
If this describes you, then read on. You might just be someone who can benefit from the 5E Scale Engine.
I’ve designed the 5E Scale Engine so that you can have a business that gives you happiness and has a real impact on your clients.
What Is The 5E Scale Engine?
The 5E Scale Engine strips away all that is unnecessary and focuses on the essentials – one of my core life philosophies. The components of the 5E Scale Engine are designed to create a steady flow of committed clients for you so that you can serve them to the best of your abilities.
1. 5E Scale Engine: Evolve
The fundamental concept that you have to agree on is this: What got you here, won't get you there.
We have to analyse what you've done, throw away limiting concepts that no longer work for you, and introduce new ones that will work for you.
As the leader of your business, you need to grow if you want your business to grow. Everything that affects you on a personal level must be optimised so that you can perform at your full potential.
Think about the drivers of racing cars or the jockeys of racing horses. To be the winners in their races, it's not just a matter of the fastest cars or the fastest horses, isn't it?
2. 5E Scale Engine: Envision
The second component that forms the foundation of the 5E Scale Engine is ENVISION. Entrepreneurs and business owners have always been told that marketing is a cold and ruthless game of numbers. The more numbers you have, the better.
FALSE! That’s not efficient. Think about it: I can send you 100,000 visitors to your ice cream business, but if they are all people who are lactose-intolerant, you’re going to find that you’re not going to get much, or any, sales (does this remind you of your recent Facebook ad campaigns?).
I don’t believe in transactional businesses. I know that businesses, just like everything we do, are run by people, and if that’s the case, then how we run our business should be no different from how we behave every day as individuals.
I’ll show you how the power of ENVISIONING can connect you with people that love your message and product/service, and how this will translate into an insane level of results for your business.
You might even be surprised at how common business advice doesn't necessarily work for you.
3. 5E Scale Engine: Empower
The third component is EMPOWER. Scaling up a business in a sustainable manner requires that your team knows what you're thinking, and acts together in a concerted effort.
How you find and attract the right talent to join you is the first step. You want A-players on your team, but this might not necessarily be what you think A-players are. I show you the common fallacies of hiring, and get you to focus on a hiring process that will give you an A-star team.
Once you have an A-start team, you'll no longer have to worry about HR issues that bog down the whole team, and which you spend your entire day fire-fighting about.
After you have your A-star team, the next step is to empower them to perform not just at the best of their own individual abilities, but together as a team. When you can do that, you'll harness exponentially more powerful growth as a result.
4. 5E Scale Engine: Execute
Only after you've done the first three steps can you move on to the next step, which is EXECUTE. One of the worst things that I hate is excess and inefficiency. That's why I've been absolutely ruthless in my businesses to optimise, delegate, eliminate, and automate processes whenever I can.
This increases your throughput and productivity, allowing you to scale up because you now no longer have the constraints that you used to have.
It's like a sprinter who weighs 30kg extra. I give you the tools and know-how so that your business can shed all this extra fat. You'll be able to train and perform at your optimal levels.
This transforms your business from something you work in into something you work on. Your business becomes a well-oiled machine, allowing you to focus on strategy and growth.
5. 5E Scale Engine: Engage
ENGAGE is the last pillar of the 5E Scale Engine. We're talking about engagement with your customers and clients here. With any successful business, engagement is highly important.
Have you ever seen companies with great products that close down? I would bet that they didn't spend as much time on their engagement with their customers. A lot of entrepreneurs suffer from the "build it, and they will come" syndrome. Unfortunately, it takes more than a great product to become a successful business.
You'll need to plan out your customer journeys and ensure that you do things in the right sequence in order to engage your customers properly.
Proper engagement is the difference between your customers raving about your product, or nobody caring about you. When you do engagement well, your product sells by itself because your customers can't wait to tell their friends all about your product.
Implement The 5E Scale Engine For Your Business
Not everyone can benefit from the 5E Scale Engine, and everyone will need a different implementation strategy, so it’s not a mass-market solution.
I like working with action-takers who are providing a service that adds value to their customers’ lives. If you are interested in implementing the 5E Scale Engine, I offer a mentorship service where I work with you personally on a 1-on-1 basis.