Latest / Daily Influence / 533. From Growth to Scale: Clearing the Path for Smarter Business Expansion

Transcript

533. From Growth to Scale: Clearing the Path for Smarter Business Expansion · Daily Influence

• 0:10
  [SPEAKER_01]: Welcome to the daily influence where our mission is to deliver a daily dose of positive influence that can uplift you personally or be shared within your sphere of influence.
• 0:20
  [SPEAKER_01]: While not every episode may directly apply to your unique circumstances, we strive to provide insights and inspiration relevant to most people's daily, weekly, and monthly lives.
• 0:30
  [SPEAKER_01]: Whether you are tuning in during the morning, noon or night, the daily influence is here for you.
• 0:36
  [SPEAKER_01]: Listen, share, and embrace the power of influence in your life.
• 0:40
  [SPEAKER_01]: Hey everybody, Brian Smith here with the I&Team series and your daily influence and I am going to be spending some time with Brandon Cohen, one of our associates and today we're going to be talking about the difference between growth and scaling and understanding why that difference is critical for sustainable success.
• 1:03
  [SPEAKER_01]: Quite frankly, scaling is a much overused word.
• 1:06
  [SPEAKER_01]: So hopefully after today, you'll have some better clarity on it.
• 1:09
  [SPEAKER_01]: I know we've discussed this in the past, but this is a more contextual discussion between Brandon and I because we are going to be looking at some real world examples from clients where we break down how growth and scaling are not interchangeable.
• 1:22
  [SPEAKER_01]: Growth means adding resources is revenue increases more people more cost.
• 1:27
  [SPEAKER_01]: Scaling on the other hand is about increasing revenue without matching increased costs.
• 1:32
  [SPEAKER_01]: So we're going to talk about that process and how smart management systems help companies recognize which phase they're in, which lets them shift between their mindset, how to remove the friction that holds so many leaders back.
• 1:46
  [SPEAKER_01]: So whether you're stuck in chaotic growth or preparing to scale with a purpose, this episode,
• 1:53
  [SPEAKER_01]: will help you find that clarity to move forward and improve your organization with confidence.
• 1:59
  [SPEAKER_01]: I hope you enjoy the discussion, but forward to talk to you again soon.
• 2:04
  [SPEAKER_00]: So now let's talk about growth.
• 2:07
  [SPEAKER_00]: One of those stories comes from a client in the commercial HVAC industry.
• 2:13
  [SPEAKER_00]: What specific growth goals or challenges brought them to IA initially?
• 2:18
  [SPEAKER_01]: You know, the first issue they faced was actually understanding the difference between growth and scaling.
• 2:24
  [SPEAKER_01]: And that's one of the biggest challenges we have.
• 2:27
  [SPEAKER_01]: The difference is this, when we grow, we have commensurate expenses that go with the increase in revenues.
• 2:37
  [SPEAKER_01]: When we scale, we don't have those expenses growing with the revenues.
• 2:43
  [SPEAKER_01]: So we're adding a lot more revenues, but we're not adding the corresponding expenses that go along with it.
• 2:48
  [SPEAKER_01]: And they first needed to understand that because they felt like they were ready to scale.
• 2:55
  [SPEAKER_01]: And the fact is, as they weren't, they were ready to grow.
• 2:58
  [SPEAKER_00]: And what thought like it was holding them back operationally or strategically?
• 3:03
  [SPEAKER_01]: Well, for one, is that understanding?
• 3:04
  [SPEAKER_01]: Because they didn't have a good understanding of what their financial needs were to reach their next level of revenue generation.
• 3:13
  [SPEAKER_01]: And because they didn't understand that, they were not properly funded to get them to that next level.
• 3:21
  [SPEAKER_01]: So the first thing we were able to do was bring them some clarity on their finances.
• 3:26
  [SPEAKER_01]: bring them some clarity on their tactical accounting and then use that to to a presentation to their bank and increase their bowering capability that would give them growth potential.
• 3:38
  [SPEAKER_00]: And how did we help them identify the right growth levers or move friction?
• 3:42
  [SPEAKER_01]: Yeah, we brought smart right into this organization like we always do and we helped them understand foundationally where they were from a service offering
• 3:52
  [SPEAKER_01]: What their measurements were what was attainable and not attainable for them, operationally and financially, which meant that they understood what was real and what they could get done.
• 4:05
  [SPEAKER_01]: We help them really understand that this is a good time for them to grow and to get ready for scaling.
• 4:11
  [SPEAKER_01]: So we brought that clarity through the application of smart management.
• 4:15
  [SPEAKER_00]: Can you speak to any early results or progress they've made since working with us?
• 4:20
  [SPEAKER_01]: Yeah, as I just noted, not only did we get them clarity on where their finances were and how they were spending money and why they were spending money and what the barriers were in that spending
• 4:34
  [SPEAKER_01]: We were able to increase their line of credit which allowed them the room to grow.
• 4:40
  [SPEAKER_01]: Also the room to deal with emergencies during our early time with them.
• 4:45
  [SPEAKER_01]: They had a truck that failed and they had to buy a new truck because of the work we did.
• 4:49
  [SPEAKER_01]: They didn't have to go through a long drawn out process to figure out how to pay for it.
• 4:55
  [SPEAKER_01]: where the money was going to come from, they were able to just go out and buy that asset in a very smart way and put it in production quickly.
• 5:04
  [SPEAKER_01]: Finally, they now have a clear path of understanding of how long they're going to grow for and at what point it will tip over to scaling.
• 5:13
  [SPEAKER_00]: Now let's look at another growth case with a client in the residential of HVAC industry.
• 5:20
  [SPEAKER_00]: What were they struggling with most in trying to grow or scale?
• 5:24
  [SPEAKER_01]: This particular client is typical for somebody who is amazingly talented in their area of influence.
• 5:35
  [SPEAKER_01]: For this one, as you just noted, it was home HVAC systems, air conditioning and heating systems for our homes.
• 5:43
  [SPEAKER_01]: And he's a great technician, but he did not understand what it was to actually have a business.
• 5:51
  [SPEAKER_01]: And he was making
• 5:52
  [SPEAKER_01]: The mistakes that a lot of small business people can make when they are a solopreneur.
• 5:57
  [SPEAKER_01]: They only have themselves or maybe one employee.
• 5:59
  [SPEAKER_01]: They run their business out of a checkbook.
• 6:02
  [SPEAKER_01]: They don't think about inventories.
• 6:05
  [SPEAKER_01]: They don't think about payrolls.
• 6:06
  [SPEAKER_01]: They don't think about taxes.
• 6:07
  [SPEAKER_01]: They don't think about accounting.
• 6:09
  [SPEAKER_01]: And so what he brought us was the proverbial shoebox full of receipts with bank statements and said, help me understand my business, which by the way had grown
• 6:21
  [SPEAKER_01]: from zero to about six or seven hundred thousand dollars a year being managed out of a shoebox on I'm exaggerating a little bit there but that is unfortunately a very typical scenario and what we've been able to do is educate him on what ownership of a business is
• 6:43
  [SPEAKER_01]: the responsibility, the joy that you can get from that, and also how to lean into fractional professionals to get the things done that are needed to get done.
• 6:54
  [SPEAKER_01]: So he has a viable business in a year, two, five, ten, or more for his family.
• 7:02
  [SPEAKER_00]: And how do we help them clarify focus, whether around service lines, staffing, leadership alignment, or something else?
• 7:10
  [SPEAKER_01]: Yeah, for this client, it's an ongoing process.
• 7:13
  [SPEAKER_01]: It's really hard to learn that new cadence.
• 7:17
  [SPEAKER_01]: That slowdown cadence of, you know, I really have to focus on my billing.
• 7:21
  [SPEAKER_01]: I have to focus on my accounting.
• 7:22
  [SPEAKER_01]: I have to focus on my marketing.
• 7:24
  [SPEAKER_01]: I have to focus on my team.
• 7:27
  [SPEAKER_01]: on my culture.
• 7:28
  [SPEAKER_01]: And so what we've seen as the initial foundation of smart has provided him to understand what those specifics are, how to measure those, and then how to develop good habits so that he does create those slowdown moments so that he can devote the time needed for those individual areas as the owner of the company, while at the same time
• 7:53
  [SPEAKER_01]: being able to get out services clients, support his employee or two now and strategically think and tactically engage so he can continue to grow and get ready for what he hopes someday will be a scaling moment.
• 8:08
  [SPEAKER_00]: And what specific tools plans or systems did we bring in that helped accelerate their growth readiness?
• 8:15
  [SPEAKER_01]: So we brought infractional services, so we brought infractional bookkeeping.
• 8:19
  [SPEAKER_01]: We brought in a fractional marketing team.
• 8:23
  [SPEAKER_01]: We helped structure his sales process.
• 8:26
  [SPEAKER_01]: We gave him technology that streamlined his ability to schedule, understand his schedule.
• 8:32
  [SPEAKER_01]: We also gave him technology that allowed him to understand what he was spending money on sooner.
• 8:40
  [SPEAKER_01]: And how his jobs were performing.
• 8:42
  [SPEAKER_01]: So he understood what his profit and loss was by job, which has allowed him to bid better and to actually understand.
• 8:51
  [SPEAKER_01]: why he has money in the bank and how much of that money is actually his and doesn't belong to some vendor or other liability that he might have.
• 9:00
  [SPEAKER_00]: And lastly, when we work with clients like this in their growth and scaling, what are some tangible signs that the smart structure is making a difference?
• 9:12
  [SPEAKER_01]: Yeah, one is that they can actually slow down.
• 9:15
  [SPEAKER_01]: I think one of the things that people
• 9:19
  [SPEAKER_01]: have a hard time understanding is that when we slow down we actually go faster we make less mistakes we think we see things more clearly we make better decisions and what we've done for both of these clients actually all of the clients we've talked about is given them something that allows them to slow down yet by doing that they're speeding up
• 9:44
  [SPEAKER_01]: They have better clarity.
• 9:45
  [SPEAKER_01]: They have better understanding.
• 9:47
  [SPEAKER_01]: They are making better decisions and their team understands that better also.
• 9:52
  [SPEAKER_01]: Their team is more engaged.
• 9:54
  [SPEAKER_01]: Their team has better understanding.
• 9:57
  [SPEAKER_01]: Which means that their customers are being treated better and their vendors are being treated better.
• 10:04
  [SPEAKER_01]: And it just creates this environment where the business runs
• 10:10
  [SPEAKER_01]: And the people in the business can do what they're what they're actually being paid to do, not all of the noise, all of the chaos, all of the things the digression that gets in our way when we don't have clarity and we don't have smart as a foundation.
• 10:25
  [SPEAKER_00]: Thank you.
• 10:26
  [SPEAKER_00]: That wraps up our discussion of growth and scaling.