Essential tips for scaling any type of business.

Essential tips for scaling any type of business.

Almost every business owner that enlists my services will ask "How do I scale my business?".  Most business owners focus on their profits from quarter to quarter and think that's how you properly scale a business, but I have a different theory.  Well, it's not really a theory, it's kind of proven and a lot of companies do this as well.

Scaling a business properly revolves around the people working for the company itself, not the profits.

There are three main stages of scaling up your business, and those are learning, execution and partnership.


Stage 1: Learning
This stage is pretty simple, you're basically learning about your employees and how they work.  This can also be thought of as "relationship capital" since you're only going to have a better business if your workers get better.

I'm sure you've heard of an internship, right?  Well if you haven't, it's basically someone that is working for you for free and making your business better than it was before in hopes of securing a position within the company.  It's an unpaid position for 1, 2, 3, or 6 months, that depends on the company and what they want to put their interns through lol.  The interns are investing in you with hopes that you will invest in them after their trial period is over.  Usually if an intern does well, they will be asked to come back to work after their trial period is over. 

The great thing about an intern position is that they are learning while you aren't paying them.  They're investing their time because they want to work with you, not because of a paycheck right away.  By building up the interns into full time employees, you're investing within your company and building it up to be better than before.  An intern that gets a job will be more loyal and work harder than someone who comes off of the streets to work a 9-5.

When training an intern, people want to use them to profit.  What you should focus on is breaking even, or just getting close.  No one will be able to come in and make you boat loads of money without experience.  They will be able to do that over time, and training them to do so will bring in the profits


Stage 2: Execution
When you have an intern, you're basically investing actually money into their training.  The execution stage doesn't really start until you start to profit off of their actions, and it will happen eventually.  There really isn't a set time limit for this stage, it just happens when it happens lol.  Unlike Stage 1, there is a financial goal with this stage and that is to profit more than you're paying the employee.  Basically you'll want to make enough money to profit after you do payroll

You can also go into something that is the 33/33/33 split to entice your employees to do even more than they are suppose to.  This type of split means that the business gets 33% of the sale, 33% goes to the person who earned it and 33% goes to stage 3


Stage 3: Partnership
This stage only occurs when the employee has shown a great deal of drive and success within the company, and is consistent.  You will likely want to bring them on as a partner so they can make the business even better and increase your profits.

This stage is necessary if you want to scale your business into the stratosphere.  If your interns know they can work for free and have the possibility of becoming a partner, they will bust their butts for you.  Companies not using this stage are just constricting their own employees and they will eventually move on to better companies offering them more. 

If you're not reinvesting in your employees, you're not going to scale as quickly as you should, it's a proven fact.


The Pitfalls
One of the biggest problems with this is that a company will make the mistake of not being flexible with stage 1, the learning stage.  After the learning stage is over, a lot of companies will let go of interns and employees.  What they should actually do is try to keep them on   If someone is a straggler, of course you can let them go, but if they're a hard worker you will want to keep them around.  They will only improve your company in the long run.

Another problem that arises is that companies are worried too much on how much they're investing, monetarily, in the learning stage.  Of course you're going to be spending some money to groom your future partners, it's a common thing, but if you're not doing it, you're going to fail.



In Conclusion:
To scale a business quicker than normal, you will need to invest in the peopel doing the work.  Of course you will have clients come and go, but your employees are what keeps the gears of your business machine turning.  Train them right from the beginning and let them know that if they bust their @ss, they might have a chance at becoming a partner



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Thanks!

Razzy