Dear Dave,

What exactly is scaling a business? I’ve heard the term many times, but I’m not clear on the meaning.

Paul

Dear Paul,

Simply put, scaling is about creating systems that make you unstoppable. Scaling means increasing revenue without expenses rising at the same rate - leading to greater profits. It can also mean streamlining operations, so you make more profit even if revenue stays the same. At its core, scaling is about creating a business that can handle more and do it more efficiently.

But before you try to scale, you should always make sure your business is ready. Scaling isn’t just about being ready financially, you’ll also need processes, systems and the right people in place to ensure things run smoothly as you grow. So, ask yourself which stage of business you’re in, and whether you’ve built a foundation that can manage scalable growth.

If your business is through Stage One, you’re running hard to keep things going, and too much of the business relies on you. To move past it, you’ve got to become an expert at creating and following a budget, managing your time, hiring great team members and delegating the work. I call Stage One the Treadmill Operator stage.

After this, if you and your team lack clear, unified direction, you’re probably in Stage Two, or the Pathfinder stage. It’s not enough for your mission and vision to be second nature to you. You need team alignment and everyone moving in a shared direction. You’ll know you’ve mastered the Pathfinder stage when your mission, vision and values are clear. Your team believes in them, better communication is happening across your team and everyone knows their roles and responsibilities.

When these pieces click into place, you’ll advance to Stage Three, or the Trailblazer stage. Here, you’re ready to put leaders and plans in place to scale your business and unlock serious rewards. When done properly, scaling doesn’t mean just boosting your profits. It’s about building a rewarding, sustainable way to run your business over the long haul. This means many things, including the fact that you’re not the only decision-maker. You have a leadership team in place to help execute the plan and make decisions that align with your vision. It also means you’re leading leaders. Instead of managing every detail of every task, you’re empowering leaders who oversee their teams to get the right things done the right way.

Finally, it’s an indication your team is aligned and working together, and you have the space to focus on what matters most. Here, you’ve developed a healthy company culture where everyone is moving toward goals with clarity and accountability. You have the right systems and people in place, giving you more time to work on the business. And that means focusing on things like setting big-picture goals, casting a vision and creating strategic plans for long-term success.

Pretty great payoff, right? It’s a lot of hard work, but believe me, these growing pains are worth it when they lead to sustainable growth you can actually enjoy!