December 29th, 2010 David Finkel (Taxloopholes.com Advisor)
A few months ago I was teaching an advanced workshop for business owners who were in the process of selling, scaling, or transitioning into a more passive role of owning their business.
As part of the workshop I was able to talk with several of our most senior Maui Mastermind Wealth Summit graduates about what’s been going on in their businesses.
I would like to share with you 3 specific strategies to scale your business that I’ve observed them use to increase their sales and grow their bottom line profits.
I think we learn best when we model successful people’s strategies and behaviors, hence the heart of today’s message is based on what these top level clients are doing to scale their businesses.
Scaling Strategy One: Introduce a new product or service to your existing client base.
Take the example of Graham, a 5-time Maui grad who’s coming back this year for his SIXTH Maui Mastermind Wealth Summit event. He owns a very successful property management company (commercial buildings) in Hawaii.
About a year ago he added a new service for his clients – a cleaning business – that provides great value for his clients and immediately increased his profitability with almost no risk. He already had the great relationships with his clients, he knew they needed the service, and he had the trust to cross-sell them to this new service.
Or take the example of Jennifer, a 2-time Maui grad who’s coming back this year for her third Maui Mastermind Wealth Summit event. She owns a successful software design company in Arizona.
Jennifer recently branched from testing/validation software for hospitals into “lab test order entry” systems. While this might not seem very sexy, this new offering has the potential to be over 100x larger! She’s leveraging her sterling reputation with the hospitals that are her current clients buy prescription drugs online without prescription to scale her business (and at the same time she’s reducing her company’s dependence on the other software product.)
Action Step: What other product or service could you profitably offer to your existing customers that both complements what they need and want and also what you are able to effectively produce or source for them?
Scaling Strategy Two: Staff up!
Consider hiring more and better people. But be careful with this one. Hiring team by itself is a recipe for disaster. Team plusplus intelligent business controls equals massive success and scalability. sound systems
Think of all three as the three legs to the stool. To build STABLE growth you need both good team members, solid systems, and intelligent controls.
Take the example of Derek, a 6-time Maui grad who’s coming back this year for his 7th Maui (and also recent dad to twin boys–go twins! In case you didn’t know, I also have 19 month old twin boys so it’s kind of like club.)
Derek is scaling up his real estate brokerage business by making smart hires and having them help him build out his business systems and controls.
Same thing for Tom (5-time Maui grad) who recently scaled up his sales and marketing team, his I.T. team, and his operational team to help him meet his goal of tripling his business size in the next 24-36 months.
Action Step: If you have the market demand for your product or service, what specific team members would you need to help you scale up your business?
NOTE: Always start (or at least 95% of the time start) by staffing up your sales/marketing team versus starting with scaling up your operational or admin team. You need to let sales drive the scaling process (most times.)
Scaling Strategy Three: Leverage technology better.
Using the example of Jennifer with the software company, her “per unit” costs go radically down for each incremental sale past a certain point… her product is digital. Hence for her, once she hits a customer base of that “X” each next sale is exponentially more profitable. Oh, and did I mention that this year she’ll hit recurring “software upgrades” sales of $1 million!
Tom is using software to help him scale. He licensed and implemented an enterprise system to run his online/offline sales and inventorying part of his business. This will help him scale because once he gets his systems down for his current product lines he can easily roll out to other product lines using those newly created systems. The software platform can accommodate multiples of growth with nominal expense.
Or for our final example take Linda, a one-time Maui grad coming back for year two. She recently brought on an online software product that is helping her scale her weight loss business. Considering her ambitious goals of hitting over 50 company owned locations and franchises in the next 24 months (she’s at 11 last time I checked) this software program that all locations will use is helping her scale in two ways. One it gives her real time access to know what’s going on at each location. And two, she gets to amortize the cost to develop this software package (she paid for it custom) over multiple stores, each time lowering the “per location” cost to create it.
Action Step: How can you better leverage technology to help you scale your business? How can you use technology in a way to both lower your real costs and achieve scalability?
Most business owners are so mired in the day-to-day that all they think about is the “job” of their business, not how they can grow and scale it.
But the most successful business owners consistently focus on the ways to grow their business beyond the day-to-day job.
Strip the lessons on building and expanding your business to their core and what is clear is that we all need a place and a community of other people to push, stretch, and inspire us to go after our dreams.
Didn’t you find the examples of the Maui grads I shared with you today inspirational?
The world’s default setting is to dampen your fire and dull your dreams.
So let me ask you, who is it that plays that role in your life? Who is it that pushes you to play big? To supersize your dreams? To hold true to your ambitions, even in the face of doubts and fears?