Why Businesses Don’t Grow – And What To Do About It!

I have a long history as an entrepreneur, I had my first business when I was just eight years old. And I hate to admit it, I’ve got a terribly long history in not succeeding in growing businesses. It was only after I lost my business in 2009 following the “Global Financial Crisis” that I started to “get it”.

From that time, I have become obsessed with understanding the patterns of what makes businesses “tick”. I can 100%, definitively say, there are patterns in how businesses operate, & how entrepreneurs behave that will cause success & failure. I know this not just from my own experience (I have 3 companies, I’m an advisor & on the board for 3 more, & I run the Singapore branch of an international company), but from having worked with 600 companies at Ezy VA (the outsourcing company), I’ve seen the major differences between those who scale easily, & those who don’t.

Here’s the top things I see that determine your success or failure in scaling a business:

1. Fundamentals First, Then Tactics – We live in a world where we are bombarded every day with someone telling us their take on how to grow a business. Usually they are marketing tactics on why you should use Linkedin & not Facebook, or why you should use Facebook & not Linkedin. These are all somebody’s unique take on what worked for them. Not to discredit all of these tactics, some of them work of course. But the point is, this is all noise. And it’s so easy to get distracted by that & not focus on the fundamentals of growing your business. Being able to “Pitch” properly, being able to have sales conversations, these are business fundamentals that entrepreneurs have become lazy in, because they are looking for tactics to automate.

Fundamentals first, then tactics!

2. Accountability – The other thing that having so many tactics & noise has caused, is a complete lack of accountability. Scaling your business requires building a team, building a team requires leadership, & leadership requires you to be 100% accountable for your results rather than blaming those you have around you & the tactics you’ve engaged. Become good at the fundamentals first, & if you fail at that, you have nobody to blame but yourself. That’s a good thing. If you don’t think it’s a good thing, don’t be in business!

3. Build A Heart – Because of the emergence of outsourcing & freelancers that we can so easily access, entrepreneurs are of course able access resources much easier. But there is a downside to engaging with freelancers. Freelancers work for themselves, not for you. And it’s next to impossible to build a team of freelancers.

I’ve seen this time & time again. The tipping point is around 7-8 scattered remote staff or freelancers where it all becomes shaky. None of these people work for you, they have their interest first. If you want a scalable business, you need a central team, or the “heart” as we call it. What we commonly see work, is having a balanced team where 50-70% of the total staff are local, I.E working from head office, & 30-50% working from a central office offshore in Philippines. Having everybody housed together means you can embed your cultures, values & training to this offshore team. If you want to grow your business beyond 10 staff, centralising our teams gives you foundations for scalability. Of course you can still work with freelancers for ad-hoc projects where special skills are required, just don’t try to build your team with that.

4. Not Supporting The Key Players – As your business starts to scale, it usually means you’re doing bigger volume. More clients, more transactions, more staff, more systems. The inevitability is that the amount of menial tasks, administration, emails etc will also grow. One of the major blockages for businesses not growing, & the cause for talent leaving you, is not supporting the key players to have the menial tasks & admin supported in their roles. I believe that everybody in the business should be on a trajectory to working on more high value activities, and a constant emission of low value activities.

Let me give you a real life example. Business X is getting growth & a lot of enquiries. They are still a small team of 8 people which includes 3 Business Development Managers. The “easiest” approach to scaling would be to simply duplicate the BDM roles. But that’s not the smart play, in fact it’s the lazy play that will end up causing low productivity, high cost & high level of attrition.

Lets say the base salary of the BDM is $70,000 AUD per year. With some proper “unpacking” & systemising, you might find that 30% of the role of BDM could be done by an “assistant”. These tasks could be email handling, preparing reports, data entry to CRM, meeting notes etc.

So what now if the BDM got that time back to do 30% more high value activities such as lead generation, phone calls, meetings, presentations, onboarding etc. So with some proper organising, the 3 BDM’s for Business X could put in an assistant offshore for $25,000 all in (no overheads, no office, no superannuation, no HR to manage etc). Whats the net effect of this then?

* Spend $25,000 instead of $70k ++ (probably $100k in total). That extra margin can be used to drive growth, innovation & profit.
* The BDM’s actually become more productive because they don’t have to bounce back & forth to menial low value tasks. They enjoy their job more which has a positive effective on culture.
* You have a system for scalability to build out teams & duplicate more easily in new regions.

So, there’s my top 4 things to think about to help you have a more scalable enterprise. If you are interested to know just how scalable your business is, do this quick 5 minute scorecard test at www.outsourcetoscale.com. It will give you clarity on just how scalable you are & what might be missing, or what you can do to accelerate your growth.

Feel free to get in touch if you have any questions or comments. Have an awesome day wherever you are!