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When it comes to launching a new company, many small business owners are busy looking for ways to increase revenue. But without a tactical plan for scaling, owners may find it either difficult or impossible to sustain growth over time.
Small business and marketing expert John Jantsch discusses the fundamentals of scaling a business. He explains why growth and business are not the same thing and provides tips and best practices for developing a scaling strategy.
John Jantsch is a small business consultant, speaker, and bestselling author of several books, including Duct Tape Marketing. His latest book is The Self-Reliant Entrepreneur.
Greg Corombos: Hi, I'm Greg Corombos. Our guest this week on Expert Insights is John Jansch. He's a veteran marketing coach and award-winning blogger. He's the author of Duct Tape Marketing. And his brand new book is The Self-Reliant Entrepreneur, which you can find at selfreliantentrepreneur.com. Today, we are going to be talking about how to properly scale your small business. And we'll be talking about brands, energy, hiring, delegation, all sorts of good things, as well as how precisely to do all that. And so, John, it's great to have you back.
John Jantsch: Oh, thank you, Greg.
GC: Well, our podcast goes to existing and aspiring entrepreneurs. And I'm guessing that the vast majority of both understand what scaling is. But just to make sure we're all starting off on the same foot here, what does it mean to scale a business?
JJ: It's related to growth, but it's not the same thing. In other words, there are a lot of people that grow by getting a lot of clients, but then they can't handle the work that they're doing because, you know, they don't have you know, assignments and processes and things. So, to me, scale is a way to build your business in a way that it can grow predictably, consistently and profitably, without driving you crazy.
GC: Always a good thing, especially if you want to keep growing. There are many different factors here, and we're going to focus on a handful of them in the time that we have together. First of all, defining your brand. We talked in another podcast about defining your customer, but defining your brand. Explain that.
JJ: Well, I think one of the goals with that is, you know, a lot of times people scale for scale’s sake. And one of the things about defining your brand is really a lot of, you know, what's our purpose? What's our mission? What are we trying to accomplish? You know, by scaling this thing, I mean, it might be that we just want to build this thing and get nice revenue itself. But for a lot of people, it's, I want to have impact, you know. I want this thing to change...wrong that's in the world. So the step, first step, really then is, you know, that's the essence of the brand, is what are we trying to accomplish? What impact are we trying to have? Literally, then we layer on, you know, how do we message that? How do we tell the story so that others are attracted to, you know, that idea. And that mission, obviously, you know, comes down to little things like what's our website look like? What are our colors, you know, all those kinds of things. But ultimately the goal is, if we're going to scale this thing, we have to understand why and where we're going and the impact we're trying to have. Because that will ultimately become your brand.
GC: John, let's get into a little more detail with what you mentioned, even in your first response about what scaling is, and that's the importance of processes and systems. Obviously, when you first build a business, you know, you need organization, you need to have a plan to deal with all the different aspects of running a business, but you might not be an expert on every single thing. So how do you build these processes and systems that eventually hopefully, for the most part, just self perpetuate?
JJ: Yeah. So the first step for me and again, this involves, you know, this isn't like you don't sit on day one and you work this out. This is something that you continually have to come back to maybe quarterly in some businesses, but certainly frequently, is you first have to decide, you know, what needs to be done. A lot of people do it backwards, and they start trying to hire some people. And, you know, once you get past one person, you know, we start thinking about who needs to do what, and I think the first step is what needs to be done.
So if we want to grow this business, if we want our customers to have a consistent experience, if we want to develop, you know, processes or services that we're going to deliver, you know, consistently, you know, we have to start saying, okay, we have a finance function, and we have an operations function and a marketing function, for example. What needs to be done in marketing for us to accomplish our goals. Okay.
A lot of times we'll work with folks that just actually have them do an org chart. What are all the boxes that go into there? Doesn't matter if you don't have 20 people, you know, what are the functions that need to be done? Because that's how we start identifying, okay, how do we replace the fact that the owner of the business is doing, you know, half of this stuff, half of it is not getting done. You know, that's where we can start saying, okay, do we need people? Do we need to outsource, say our bookkeeping or our accounting? How do we make sure that you know social media is getting done? And so that's step number one.
From there, you can actually start to say, okay, if I'm the owner of the business, and I'm still doing payroll, you know, that's taking an inordinate amount of my time that really doesn't have much payoff. Let's start getting figuring out, you know, what we can get, you know, off of the plate of people so that we can focus on the highest payoff work.
GC: Exactly. And that goes into a lot of the different other strategies and priorities when it comes to scaling, including refocusing energy, hiring the right people, delegating work, and that sort of thing. And your experience, whether it's personal or the clients that you've had, how tough is it to let go even when you do have the right people, and you've got the right tasks assigned to the right people?
JJ: The world is littered with businesses that have failed because business, you know, just couldn't let go of the things that they thought should be done and how they should be done. And that's not to say that you just hire people and you know, hope they figure it out. The most successful businesses, if they want somebody to have a certain experience a certain way, they attract people, first off, that are...believe in the mission, believe in the service that they're providing. And then they teach them how to do the systems that you know, that run that business.
And so, one of the tough things about letting go is a lot of business owners abdicate things. They say, oh, good, I hired somebody to do social media. Then, you know, and then two weeks in they're like, well, that's not how I’d do it. And so, anytime you delegate something, you need to delegate it with a plan, you need to delegate it with a system, maybe even something as simple as a checklist, you know, so that people understand, you know how to win the game. That aspect is what really trips a lot of people up. So just basic things, they can't get off their plate.
But then there are certain things that if you..in most businesses, the founder of that business is also the rainmaker, the chief salesperson. And in most businesses, if you can't find a way to replace yourself as the owner of the business as being the top salesperson, or and, the top person who delivers you know, whatever service the customer gets, particularly in the service business, then you'll really never be free of the business, and you'll never be able to scale it.
So you know the tough thing is you've got to get the stuff that you shouldn't be doing or you can't do off your plate so that you can then go to work on delegating or creating process for the core components of the business.
GC: Obviously, delegation requires hiring the right people. So regardless of what the position is, how do you know you've hired the right person?
JJ: You know, I would never call myself an expert on that question. But I do know that the best hires in my experience have always been people that I hired because of their values and their beliefs and their interest in what we were trying to do, as opposed to their resume, and you know, what they've done in their past experiences. In fact, some of the best people that I've hired had no experience at all in what I was asking them to do, but they had such a great heart and such a great love for what we were trying to do and who we were trying to serve, that they were able to make decisions and do things, you know, that benefited the business and benefited our customers because, you know, that was really where they started.
GC: So character matters as much if not more than qualification, sometimes.
JJ: I mean, obviously, if you've got something that they need to program, you know, Ruby on Rails language or something software, you know, that's important. But most of the jobs, particularly jobs, where people are going to interact with your customers, character matters more than their experience, I think, all day long.
GC: Let's talk a little bit about delegation. Depending on the size of the business, I guess it can, it can look a lot of different ways. How much tinkering does that generally require to make sure you're operating at maximum efficiency, because the people with the most skills and the most drive in a given area are doing exactly what they should be doing.
JJ: That's an area that has evolved so much over the last decade because of the ability to work globally, to collaborate, to get the best of class for the most specific things that you need done. And so, instead of delegation being, I need to hire a person and then figure out what they do, which, unfortunately, is what a lot of businesses do. I'm a huge proponent of, if I have this very specific need, find the best person. Maybe it's, you know, a project, maybe it's, you know, 10 hours a week, whatever it is, find the best person to do that specific thing I need done and build your organization around that concept of delegating to people who have a very specific skill for...particularly for technical things, as opposed to, you know, hiring people and hoping you could build a job around.
GC: As you mentioned earlier, John, and we're down to our last minute or so here. We're talking with John Jantsch, veteran marketing coach. The new book is The Self-Reliant Entrepreneur. You're always playing around with this, you're never just setting something in motion and walking away from it. Although, on some level, you want to be able to walk away if you need to, or simply want to. But what you put in place isn't necessarily going to stay that way. How do you know that you've gotten to the point where you have scaled and you can step away as the business owner, knowing that you have put together a system and a series of systems to have the business operate even if you can't be there?
JJ: Well, I mentioned them. I think, to me, the two keys are that your business is still able to land customers, whatever that means to you, and that you're able to provide the product or service to those customers and have them have a great experience. And the owner of the business doesn't have to materially participate in any of that. I think that's, you know, that's the point at which you can say, okay, I know I can leave for a week, and not come back and find a parking lot.
GC: That's a good way to put it. Fantastic. John, thank you again for fantastic insights. We appreciate your time very much.
JJ: You bet, Greg
GC: John Jantsch, veteran marketing coach, award-winning blogger, author of Duct Tape Marketing. The new book is The Self-Reliant Entrepreneur: 366 Daily Meditations to Feed Your Soul and Grow Your Business. You can find that at selfreliantentrepreneur.com. I'm Greg Corombos. This is Expert Insights.
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