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Scaling To A Business

By Tom OlsonMay 23, 2017

Are you tired of clocking in and clocking out? Are you tired of being just another employee? Maybe you have taken the first step from being an employee to actually being a business owner, and maybe you have even gotten to the point of being self-employed. Businessman and author, Robert Kiyosaki talks about the various quadrants of business that must be scaled in order for someone to become successful in business:  employee, business owner, self-employed, and investor. Many people have crossed over from employee to self-employed, but we have found that so often an entrepreneurial-minded person ends up creating just another job for himself in which he works as hard, if not harder, and often with less security and more risk; at this point, a lot of burnout occurs. People end up going back into the employee quadrant because they can’t manage to get to the next level.

 

When Wayne Sheaffer, the founder and principal owner of Housemart, started the business, he asked me to come on board with him. In the first year, we made 48 real estate deals. We worked hard to scale the business to the next level. In 2016, we made 300 deals! In the fourth quarter alone, we sold 100 houses in just 100 days. That is an incredible amount of volume.

Scaling from one level to the next begins with the right mindset. The right mindset basically states that you need to be working more on your business than in your business. The self-employment stage is when a business is first getting off the ground, and the business owner definitely has to work in the business. The goal is to get to the next level. Getting to the next level is accomplished by first thinking more of how to work on the business to grow the business, to make it better, and to give it vision.

Next, the small business owner must be willing to let go. A few of us started Housemart, or birthed it, so to speak. It can be very hard to let go of something that you have given your blood, sweat, and tears to. You may feel like a mother whose child turns eighteen and is grown. Mom has watched that child crawl then start to walk and eventually run. It can be hard for a mom to let go; she may have a hard time seeing her child grow and become bigger; she doesn’t want to see that child leave the home.

Sometimes a mother can feel so invested that she holds on too tight and emotionally smothers the child.  Because of her inability to let go, a mother can hold her child back in life. Just as it is vitally important that a parent gradually releases a child to give him more independence, the business owner must also have the mindset of letting his growing business go, and let others become involved in the day-to-day operations.

The next step of scaling to a business is to come up with a plan. The business must look internally and develop a plan for growth.  Growth most definitely must take place in the business itself but also within the individuals running the company. The business owner must have a clear purpose and plan for himself and for his business; he must take responsibility for decisions that will determine direction. When problems develop, the business owner must take responsibility and find viable solutions. While the business owner is developing growth in the business and in the individuals that work with him and for him, he must not forget to work on his own personal growth. The best project you’ll ever work on is you! Take time to invest in yourself–that type of investment will bring more value to your business and to the people around you.

Another step in scaling to a business is providing structure to the organization. You must lay out a plan or an “accountability chart” which will detail the seats or positions that are critical to the organization. The responsibilities of those seats must be defined. Once the seats are determined and the responsibilities are defined, you will know the type of people you need to hire. You will use the organizational chart you have developed to determine what positions are vital in order to scale to the next level. Most companies make the mistake of hiring based solely on a person’s ability, and they don’t consider how the personal values of an employee can affect the overall structure.  Use your accountability chart to determine whom you will choose to be on your team. A part of our hiring process involves giving a core value speech. We want to hire people who will thrive in our organization. A person’s combined ability and a commitment to the company’s core values will strengthen the overall structure of the organization.

The next step to scale to the next business level is to develop a target for growth. We put together a 10-year plan that had a great big target. We even had a name for the target:  B.H.A.G., the Big Hairy Audacious Goal! Unlike many other companies, we knew from the very beginning what our purpose was—to give $2.6 million. Nike’s goal was to crush Adidas. These types of targets may seem like pie in the sky kind of stuff, but having a BIG goal and a BIG purpose will drive your organization, and everyone will want to get behind that type of vision.

We also set a 3-year target to aim for. We envisioned such things as how many employees we would have in three years or what the revenue would be in three years. We wanted to capture an image of what the company would look like in three years so that everyone would be thinking and planning with the same purpose in mind.  Then we walked back through to the point where we are now to see how we could make the image of the business a reality, and we set in place goals to meet along the way.

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We also have 90-day goals. We sit down and envision the goals we want to achieve as a company and as individuals within the company. We get determined to stay laser-focused on those goals for the 90-day period. After 90 days, we regroup and measure the accomplishments. Long-term and short-term goals will help further drive the company to growth.

Scaling a business to the next level will never be possible if we don’t establish who our customer is and what his needs are. Marketing strategy is developed by determining what the customer’s pain is and then marketing the prescription for his pain. Once you know who your customer is and how you can solve your customer’s problems, your company will flourish. Keeping the needs of the customer in mind must be an integral part of the vision planning of the company.

Every business should have an operating system in place which is another element to help you scale to a business. I think E.O.S. is one of the best operating systems for an entrepreneur. If you don’t know how to get started with implementing an operating system, there are implementers like myself who can help you. Once you find an operating system, stick with it. A part of the E.O.S. system is taking the knowledge of the process that is in your head and documenting it on paper. Once the process is on paper, communicate the process so that everyone in the company can follow it. One thing I am always asked is, “I am my only employee, so before I hire anybody, what do I do?” I always recommend the process map. A process map allows you to take your core processes, usually six to ten, and get them mapped out on paper without having to create a 500-page standard operating procedure.

From there, embrace efficiency tools, things that can make you more productive with the processes you have set in place. Podio is a tool that can automate your business and take the day in, day out function of your business to another level. Another tool we have at Good Success is what we call Foundational Friday during which we designate two hours on Friday to work on the foundations, or the processes, of our business. We look for ways to improve the business. We look for ways to get rid of waste. We look for ways to make the business more efficient.

The next step is accountability. People don’t respect what you don’t inspect. I’ve had close to 300 employees over the last 20 years that reported to me. I always told my managers, “If you’re not constantly inspecting what’s going on in your business, then you don’t really understand your business; nor is it running the way you want it to run.” You must have procedures in place to help you hold your people and your processes accountable. Service level agreements are a good tool to help in the area of accountability.  If a contract to a new customer has to be generated and placed in that customer’s hand within 24 hours, then your service level agreement would be based on that necessity. Once someone in the company has a responsibility to that process, then you (or even that person) would track how quickly he is able to complete the contract. Everybody should have service level agreement numbers that hold them accountable and track their performance. Accountability should not be viewed as a negative thing. A big part of accountability is having good reports in your business by producing items such as profit and loss statements or variance reports.

The two-fold purpose that drives a business to success is passion and purpose. A child’s body knows how to handle the growth that occurs over an 18-year timeframe. The body produces the hormones that cause growth spurts. Businesses go through growth spurts of their own. When a business “hits the ceiling” it must push past that plateau so that it can grow even more.  Most companies go out of business in the first three to five years. The right purpose and the right passion will help a business “spurt” on past the ceilings rather than shut down.

Passion for the business is vital and real passion is absolutely contagious! When a business owner is passionate about his company, the employees will see it.  The employees will be impacted by that passion in leadership team meetings, quarterly meetings, and annual meetings. It is important that the leader shares his vision with his employees, and once they catch the vision, enthusiasm, and passion then the effect will cascade down from the employees to the customers, and you will find yourself with customers that are raving fans! When you know that you are providing an awesome service and changing lives, you will want to get feedback from your employees and your customers to see if there is any way to improve even more.

The passion and purpose that drive the entrepreneur internally should align to become the vision and the culture of the company.  The owner must have a clear vision which will allow him to help direct the people within the organization; the owner must be able to look out over the maze and point them to the path of a successful organization.

I’d like to encourage you to take the necessary steps that will help you scale from being an entrepreneur to having a business. If you begin using the steps, you will create a business that is led with purpose, passion, accountability, structure, and vision.

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