TO SCALE OR NOT TO SCALE, THAT IS THE QUESTION!

By Gry Tomte

Scaling is a real buzz word at the moment. Something I’m asked about quite a lot – “When to Scale” and “How to Scale?”

When you want to scale your business, you’re looking at how to grow EXPONENTIALLY - WITHOUT adding lots of extra cost and usually comes after a phase of steady growth.

Trying to scale a business too soon means you’re taking the fastest way to profit without building the right foundations to get there in a sustainable, long-lasting way.

It’s exactly what I did!

A couple of years into our new business we found ourselves booked up 3-4 weeks in advance, and I saw an opportunity early on to double our revenue by adding an extra 3 rooms in the basement and taking over another space that I’d previously rented out to a hair stylist. I doubled the team in order to accommodate the demand, but I definitely wasn’t prepared for the chaos that ensued as a result of not having a strong foundation or enough processes to ensure we could keep standards high and the culture humming whilst we grew.

It was not a fun time! And ultimately it made for a bit of a downfall when I lost most of my team, which I’m sure you’ve read all about if you’ve read some of my previous articles.

So, when you’re looking to scale your business, what we’re really talking about ideally is taking a business that has already had a good amount of growth, and by putting in place Processes, the right KPI’s and what I believe most important - the foundations - look to multiply your clients, your revenue and / or your locations if that’s what you want.

I believe my 4 P’s of business is crucial if you want to grow and scale;

People. Process. Product. Profit In that order….

Create the right foundations for your People to grow and thrive and do their best work. Create great processes to support them and you. Ensure your product is therefore irresistible to clients. Which in turn will give you the profit you need to invest back into your People so that they can continue to grow the business.

I’d love to share with you some of the things I learnt - and wish I’d known back in my rookie days when we scaled way too fast! These are the things I take my coaching clients through so they can build resilient, scalable, profitable, resilient, happy workplaces with a winning culture to boot.

THE FOUNDATIONS:

Like with any structure that is to stand the test of time, it’s important to build a strong foundation of systems and processes to withstand the growing pains.

Vision:

The first thing I would suggest is to have a really clear vision for what success looks like to you. If you just want to open another location to keep up with the Jones’s, then you’re already setting yourself up for potential misery. Instead, detach yourself from your ego and look at what you want your future, your role, your business, and your impact to be.

Do you want more staff? More revenue? More profit? More clients? 10 clinics or 2? More revenue doesn’t equal more profit. And Having 2 or 3 locations also doesn’t necessarily equate to better profit. So, work our why that’s important to you if that’s your vision.

Do you want to be hands on or hands off? Do you want to live remotely or travel? Or are you a homebody who loves being in your safe space? Either is fine - but knowing what brings you joy and what you want to do in your business means you can put a plan and a process in place for the people you need around you to get you there.

Complete clarity of what your ideal version of success looks like is step number one.

Purpose:

Having a clear, tangible Purpose - the reason WHY what you do matters - is in my opinion the biggest integral piece of the foundation when it comes to scaling a business. When you’re asking people to come to work every day and deliver their best, it’s helpful to connect them with why their contribution makes a difference, And if you have a cool sounding purpose statement and it’s not part of your actual processes (or you can’t actually even remember it)! then it’s time to revisit it.

With business owners who have done my “Build a rock-solid foundation” course I have found most have previously articulated a purpose statement, but none had really understood it deeply or understood how to ingrain it into the processes of the business. The incredible shift that comes with figuring it all out is life - and business - changing!

Values:

On your way to achieving your vision, of course you and your team will also need to know the road rules - your values. Because there’s several ways to achieve your vision. And HOW you get there matters just as much. Imagine if you have a therapist who lies steals and cheats to reach their target every month and gets heavily rewarded for it.

And on the other hand, you have a therapist who might miss their target from time to time because they do the right thing for the client - but sees steady growth and supports those around them to be excellent. And yet that person rarely gets rewarded. How you get to the outcomes matter. And that’s your values.

A growth mindset:

Part of continuous business growth is continuous personal growth. And learning as you make mistakes rather than dwelling on them will save you a lot of wasted time, energy, and focus. Seeing mistakes as opportunities to learn and grow rather than failures will mean you get to progress much faster. It’s something that unfortunately took me a lot of time to get my head around - as someone who has very high expectations of myself, I would often take any setbacks personally and heavily. And in hindsight it definitely caused me a lot of avoidable grief and slowed me down…

THE PROCESSES:

Delegate. Delegate. Delegate. You can’t do it all if you’re going to scale your business. I used to think I had to “rescue” everyone by helping them - and what I realised was that all it made me was overwhelmed, overworked, and under paid for my efforts. And it also took away everyone’s power around me. Equip your people and empower them to make great decisions. If you don’t already have a task delegation/project ownership tool to keep track of who does what, I suggest you look into one.

I’ll go as far as to say it’s impossible to scale a business without it. At HÜD we have used Trello now for 4 years, and if used properly can be a powerful tool to get stuff done without micro managing (because, who wants that)!

Proactively invest in staff:

Don’t wait till times are desperate because then it’s too late - you’ll have a temporary gap in revenue, you might hire out of desperation - and you might rush the induction period, which leads to stressed staff, unhappy clients and perhaps a derailed culture in free fall. Instead, remember that people come and go and they also have holidays and sick days. If you crunch the numbers, I guarantee you in most circumstances having an extra staff member or two to ease the pressure, allows the team to give better client care and have a bit more flexibility will make you come out on top every time. In fact, the times when we’ve been really short staffed, and jam packed have been a lot less profitable.

Build your channels for positive, clear comms:

Things like intentional, weekly 1-1’s to cultivate continuous growth, support and a high performance culture, regular team meetings and daily huddles are a must when it comes to growing or scaling your business. The fastest way to cause confusion and unclear expectations - and therefore a fractured culture - is a lack of communication. At HÜD we love and use Slack every day for all our comms, and it can be such a powerful comms channel for positive comms.

Policies + Procedures:

Every part of your business should have a Policy, or a Procedure built around it. We usually use the “hit by a bus test”. Meaning, if your core team were hit by a bus, would the business still operate without them? Or you as the owner?

If the answer is no then time to revisit the old P+P book and update it. And there are lots of ways you can automate and update it - platforms such as Trello or Employment Hero and other HR platforms can make it easy to store a digital, searchable version of your policies and procedures so staff can easily find the answers they’re looking for.

Clear Position Descriptions + Hiring Process:

A great, high performing team is a major key to achieve growth and scale, but how many times have you had a whinge about your team not following rules, underperforming or just simply not being onboard with how you envisioned them to behave? Well, it might be time to look at your Position Descriptions and hiring practices. It’s very hard to hold people to account without setting clear expectations from the start.

When hiring new people, make sure your Position Description outlines not just tasks but also code of conduct, values, key performance metrics and how they represent your brand. Go through it in detail when a new member starts to make sure they can ask clarifying questions to clear up any misunderstandings or unclear expectations from the get-go.

KPI’S:

Get to love your reports and the story behind your numbers! So many owners have no idea what their net profit is or where they’re overspending - or underspending. Remember, your people are what drives the business forward, and it’s a variable cost that also brings more revenue back into the business. Investing in your people’s growth and enabling them to be more productive is a much more sustainable way to grow and scale than simply cutting your staff cost.

Treatment profitability:

How much are you making per hour or per minute for your treatments? Do you have a treatment (or several) that might be too costly? This is an opportunity you shouldn’t miss when it comes to scaling your business. Understanding that your biggest cost and also your biggest opportunity is time, consumables and wages - isn’t it important for you to know what your yield is per minute? If the yield is too low you can look to either shorten the treatments, add better protocols for upgrades and add on’s and also make sure your consumable cost stays under control.

Client retention:

The most expansive way to operate a business is to constantly be recruiting new clients to fill the books. If you get clients through the top of the funnel, concentrate most of your efforts on retaining them. If you’re planning on scaling your business, your retention should sit on 85% and over. Once you have a high retention though, you’ll notice that your books are full, and you may be at capacity. Next step from there is to analyse your average visitation rate. Normally we’d drive a shorter rate - i.e. every 4 weeks or so. BUT this is why it’s important to know the story BEHIND the numbers! If you’re at capacity and you’re incentivising a higher visitation frequency, you’re shooting yourself in the foot. Because where are you going to fit in new client growth?

If, on the other hand you’re struggling with white spaces in your books, you’ll need to first examine if you have a leaky bucket of clients - and why - and then look to increase frequency of visitation.

Utilisation:

One of the things I’m noticing out there is that there are SO many overwhelmed, overworked and under paid business owners out there. And one of the easiest ways to alleviate it is to hire more staff to help - and of course outsourcing anything that isn’t in your zone of genius. I mean, is it worth you spending a full 8 hours gritting your teeth doing your BAS when you can pay a bookkeeper $100 to do it? (I’m going to say NO!)

Check how you’re utilising your own time to make sure you’re using it on the high growth, high impact areas. But also check your current utilisation of rooms and staff and where the opportunities lie. Your booking software will likely have a report that shows you these figures.

If you’re pretty booked out even 1-2 weeks out and you have more space - it’s time to recruit. If you’re working 6 days a week and you never have time to have a proper conversation with your team - let alone 1-1’s - it’s time to recruit. If you don’t have the time to invest in giving your team the tools they need in order to be successful then in all likelihood you’ll be standing still where you’ve been for years.

Having empty rooms is never good for business. If you have under optimised rooms, it’s time to hire. If you freak out at the thought of a full timer asking for 6 weeks off, it’s time to hire! If you freak out at the thought of having a full-time staff member off sick for a whole week, it’s time to hire. NEVER allow yourself to have a single point of failure in your business. If your revenue hinges on ONE person, it’s time to hire.

Scaling is an intentional process.

Just like creating lasting changes in the skin means repairing the barrier first - fixing the building blocks - so too is it in the world of business growth.

If you need help with creating a strong foundation for your business, check out Gry’s 1-1 mentoring, coaching and business programmes here: https://linktr.ee/grytomte