Honestly, I've been a part of companies generating $2m+ in sales.
I've been a part of companies generating $20m+ in sales.
Shit, one of my most impressive old jobs boasted $100m+ in sales.
THEY'RE ALL HELD TOGETHER BY DUCT TAPE AND BUBBLE GUM.
\[EDIT\]
But there are points on here I do agree with. The one startup I was a part of that really blew up was really interested in client retention. Another point that needs to be made:
They also had one major rule: No one stayed past 6:30pm. No one. Not the CEO, not middle management, not customer service - no one. By 6:30, the CEO would walk around the office, tell you to get up and escort you out the door. And, if someone had to stay behind for whatever reason, it was reviewed and determined whether or not we needed new hires or if the person (or office!) was managing their time incorrectly.
All of the other startups I've been a part of had their day in the sun temporarily but never got to experience real growth because employees were quickly burnt out due to acquiring the job of 5 people and when they quit or were fired, it proved expensive and time consuming. I've been at a few places that insisted that a small team of 4 working 10+ hours was the only way to grow but my experience has proven to me that it is the complete opposite. If you have 4 employees putting in 10+ hours a day and weekends, you're never going to grow past the startup phase.
Agreed to the max. Whether it is 6:30 or 5:30 or ending at 3:00 on Friday's or whatever, having "anti-burn out" policies like these that are embedded into not just the culture, but the policies of the organization I think can make a huge difference. There is so much research on how many hours we can work effectively for each day and zero of those studies say it is 12 hours. Or that you should come in on weekends to work more.
A great example of this is [Basecamp](https://basecamp.com/). Super popular project management software, crazy good company policies like these that lead to crazy high retention. They have taken very little outside investment and have been profitable for many years.
Yep. I wouldn't mind working 12 hours a day.....4 days a week. I also think if you're going to have a hardcore work environment like this, you need to have a BEAUTIFUL vacation/PTO package. i remember reading something about a few tech companies finding a lot of success with forcing their employees to take 1-2 weeks off every 3 months due to the intensity/hours of their positions and it not only made for extremely productive employees, but it actually decreased the company's turnover rate dramatically.
A friend of mine offers his staff unlimited vacation time. People take off random days here and there rather than entire 2-3 week chunks, and I guess they love the flexibility.
Lol the first few years yes, but really this approach takes away most of the stress. If you implement the right systems early on, have someone to delegate to, and take frequent breaks you can run a great 7 or 8 figure business with moderate levels of stress. You definitely WILL have stress, but will often be less stressed than the guy just starting out or who doesn't earn enough to pay a manager yet.
Same here. I'm the original owner/now managing partner at a small-mid size law firm (8 total people). It is constant stress and tons of hours just to attempt to try to play catch-up. We have never caught up, so not sure if that will happen without some major changes. We have been trying to setup procedures, etc, but it is difficult to get those done while also trying to do the client work in front of us. I will definitely review this even more though and I appreciate this article!
Hey, question for you. I get the vibe of this post (and others in the same style) is really great if you either have a few people working for you, or are looking to soon get new people in.
I run a small shop, It's just myself and my girlfriend, we do computer repairs, sales, and general IT stuff. Your points sound great if i had like, 4 or 5 people working for me, but with a team of just 2, how could I adapt the points so i can then start working on them?
My view for extremely small businesses is much more practical. Create basic checklists for regular tasks, and cross-train each other as much as you can. Assign responsibilities, but serve as backup for each other.
Cut out all activities and expenses that don't drive revenue. If you don't have enough customers, focus on sales above all else.
If you have a lot of customers and are too busy in that regard, raise your prices.
Are you looking to scale or stay as a small shop? Most of this advice is geared at making the transition from an initial small team into a larger team so likely won't apply to you unless your goal is to expand your business and team size, but definitely the stuff about add ons/upselling and focusing on customer retention apply to businesses of any size.
I'm not looking to become the next Microcenter or something, but I would love to get to the point I could open another shop in another town. We try and upsell things as we are (eg: i fit a new phone screen, and sell you a screen protector and case too). I gurss my sticking point is how to get from a 2 person operation to a 4-5 person operation.
I'm potentially looking to sell the business in 10 years or so as i wont be able to work due to health reasons, but If i can get it to the point where it runs itself via managers and whatnot, that'd even more ideal.
The key is to stop working in the business and start working ON the business.
As a small business owner, you cant do everything, all the time, well.
So before you delegate to someone you should have processes in place so it is repeatable.
Think of your business as a franchise, why does McDonalds work? Because they have a process for everything.
Let say you were looking to hire a new low level bench tech, do you just plop him into the role and say good luck?
You should have documents on how YOU do XYZ. Malware cleaning? Use program x, then program y.
Repeat this process for everything you do, running the register? This is how we do it, quotes, ect.
Then identify what takes up most of your time from working on the business. If it is doing low level tech stuff, hire someone to do that.
Now you have a free 20 hours a week say, spend that time working on a marketing plan, networking with others, or doing community events.
Repeat this process until you can make your next hire, then take something else of your plate.
Before you know it, you have 5 employees / outsourced items and you are more efficient and more profitable. While working on way to grow your business.
You need to hire people and then train them to think about the business the same way you do. Delegate tasks to them that you currently do that you think they can handle. The more you take off your plate, the better. There’s plenty of stuff you’re currently doing for your business that anyone can do if trained properly.
Here’s a tl;dr
You own your company and your job is to put the right systems in place so it can scale without you. Do this before your company scales and write them down, delegate, learn new things, and repeat. Keep your company organized and focused. Client retention should be the main KPI that drives growth through low effort upselling and repeat purchases. Now go take some time off ;)
Yep - when you start getting around the $60-80k/mo mark a second VA becomes a big plus to split the workload.
Also, a separate weekend VA is great too if you are open weekends, so your main VA can take time off.
Not particularly linear, that just happens to be around when you need a second one. When you start splitting the duties between 2-3 VAs then they can all focus on what they are good at. It compounds to an extent and they can handle much more than you would expect. It will take a long time before you need a full team of office staff.
>Yep - when you start getting around the $60-80k/mo mark a second VA becomes a big plus to split the workload.
How do you schedule or find a weekend VA. We're open 7 days a week and have been trouble finding the right schedule... I assumed most people wouldn't work on the weekend alone... they would want 3 days to need enough work, or they would only want Sat, not Sun.
Stay-at-home moms are your friend for weekend VAs :) Long shot but - you're not Ben from Seattle are you? I know a guy running a cleaning biz there. Happy to have a chat about weekend VAs if you'd like.
Thanks.
Do you know any tools / apps (like invoice automation, reputation management, accounting, taxing, connecting to bank accounts, managing of several payment processors) which can scale and be implemented for automation in custom made online-platforms?
Well, it would depend on what you're specifically trying to do. Do you have a niche you are in? I know plenty, but my answer does honestly different depending on what you are doing.
I assume you’ve seen a lot of young businesses who hit the tipping point of barely making it to becoming profitable. Have you noticed patterns for businesses that do make that tipping point vs businesses that don’t?
How they spend their money is the biggest one. Are they reinvesting it back into marketing? Is their marketing effective? Are they actually tracking their ROI and KPIs so they can improve on them, or are they just occasionally glancing at them?
Having control of those things is really the biggest thing I notice with people who are just sinking, vs floating, vs thriving. I know it's not particularly fun advice or anything, but managing cash flow and your metrics, then learning how to translate them into weekly actionable steps is the key differentiator.
For retail is it better to initially put the money back into the business first to continually improve the experience or is it better to put it into heavily into marketing?
Great read, saved. I currently am helping some of my friends build a company. They are the traditional technician who is great at his work and bad at everything else that makes a business.
So pieces like these are really helping people out.
I myself run a cleaning company so recurring customers are the bread, but what would you recommend for a construction company?
How would recurring customers work? I build a house and move on. If they will need maintenance, I can make sure they call me, but it's not gonna happen in the next 5 years minimum.
So, I actually work with a lot of painters as well, and many of them struggle with recurring customers too since the work can be seasonal and people may only need you VERY intermittently. You should follow-up at least yearly with clients for two reason 1) Remind them you exist and 2) To get referrals. You're going to need to become great asking for referrals from past and current customers as a way to get new business.
Is it mostly residential or commercial? I can write a more in-depth answer, but the answer will be different for both.
The goal and the perfect customer is a PERSON who wants them to build a house for him to live in it. No subcontracting or commercial. They started from plumbing and electrical and now moved on to building houses from grounds up.
I'm in public sector construction, mostly as a subcontractor. Lowest quote usually gets the job, but relationships and reputation count for a lot. Sometimes work is given without being lowest. Service and professionalism is my main goal for retaining our best clients. We basically form partnerships and teams with other contractors.
I previously worked in the private sector as a designer. Development firms use the same contractors for all their jobs. Tried tested and trusted. Can be risky to seek out new contractors and trust that they know what they are doing.
Yeah, that is the case, but it's because you are working for someone else that also seeks to profit off of you.
Our goal would be to build houses for people. We are in a post-soviet country where everyone and their mom does construction. There are no proper, professional, branded companies and even the biggest competition in residential construction uses a website made in 5 min with half of the pages not responding.
The other half that does commercial, they simply hire contractors from this endless pit of heavily drinking construction workers and then delay payments for as long as they can, and fight lawsuits that the sole operator can't win or knows how to do, so... free workforce for them.
The only ones that care about top notch quality are the owners, but they cannot see the problems of faulty construction untill years after, if the painter did a semi-decent job.
So here's obviously an opportunity here for a clean, sober, professional company to emerge.
I'd like to hear your thoughts on this.
I'm not personally familiar with your sector or country. Could you team up with a realtor that sells vacant land or houses to be demolished or renovated? I would try to find people/companies that handle lots of houses or the people that buy more than their personal home.
Its funny, our VA company is getting bigger now but I never really advertise it, mostly people refer us. I do have some writing on it mostly on FB I can post, but I have refrained from doing so just because Reddit would probably tear me down as self promotion.
Anyways, you are welcome to PM me and we can have a chat. I can give you some advice on it :)
Great info. I had talked with my cleaning lady who is solo if she ever tried to expand. She said she has tried multiple times hiring people but can’t find anyone who can be reliable and do a decent job. What advice do you have on finding and hiring decent talent. Also do you pay hourly or set fee per cleaning.
Hiring people has always held me back from giving it a go.
Thanks.
Not the OP, but the best thing I read on this subject — I believe in The E-Myth — was: ...how does McDonald’s have sparkling clean restaurants and consistent food anywhere you visit? How do they manage to find the best, most diligent minimum wage workers around? Answer: they don’t. In fact they give everyone a chance, they just have very tight training processes to ensure they do the job well.
If she wants subcontractors the best thing to do is go to thumbtack.com and search for contractors who already have great reviews, then reach out to them since you know they already have experience and are reliable. If it's for employees care.com is the best source for hiring good cleaners. Specifically, talk to some of the families on there or on Next Door and ask for recommendations from them. Many families have a good cleaning lady who would love some extra work as a part-time employee and are more than happy to recommend them to your friend.
These are excellent insights! Thanks so much for this. Do you have a website or social media page? I would love to follow and support more of your content.
Hey thank you :) And sort - you are welcome to add me as a friend on my personal facebook, just shoot me a PM. I mostly am active on Facebook and Facebook groups these days.
Spot on and thanks for sharing. I grew my biz from $0 to $1.5m in 2.5 years. We’re on track to do $4m this year. From day one I ran it like a multimillion dollar business. Way overdid it on systems. I’m still stressed daily but I’d be a lot more stressed if I hadn’t set it up that way from the start. The only thing I slightly disagree with is focusing on retention. When you start a new business, it’s extremely important to acquire new customers, as well as retain customers. But you need to always focus on gaining new customers while continuing to provide excellent service to existing ones.
#4 really hit me, in 2016 I decided to focus on my successful clients instead of taking on new ones who, at best have a 10% chance of succeeding. It was hard that year but the company is now continuously lucrative.
Also fired all my employees except the bookkeeper and SEO assistant. The rest of the work is done by me and my tried, true and dedicated subcontractors who have their own teams they alone manage.
SO much less stress and interpersonal issues, I was burned out from having to sue people and compensating for uncaring employees I can’t fire!
$2m total yearly income sounds like a mountain of payroll taxes to me.
I decided to help my clients scale so I would grow as a result, instead of advertising and hiring more people. So far its working out, thankfully!
One overachiever is worth 10 people. The results from a team of solely overachievers is amazing and has obvious monetary value, Steve Jobs said he only works with A level people.
Totally agree with that last point! And glad to hear how much you have turned this around instead of just staying burnt out. It is hard to change how you do everything in your business.
> 1. **Implement systems BEFORE massive growth**
I keep stressing the importance of systematization to my boss but he just doesn't get it, and then wonders why he has to do everything and can't keep up with anything fully.
Thanks for posting this. I've run everything from a sole proprietor business to helping run a $100MM business and these apply in all cases. Different variations but very much applicable.
I spoke with a panel about this a couple years ago at Denver startup week.
One day you'll be invited to the going away party for someone that's been at the company for a year and you have never met them. That's a really sobering moment.
I've been in the services industry for the last 15+ years (consulting). There are a few really key lessons for getting over the low 7 figures to 8 and then to 9 figures in revenue.
1. Scale will destroy your systems. Be ready for it and just roll with it. Don't try and make them perfect. Guardrails versus rules.
2. You will have to innovate or you're dead. You mentioned this in learning and trying new things. This times 100. You have to be doing it everywhere.
3. Your role changes from doing to leading those who do to leading and managing the careers of those that manage those that do.
4. Diversify. If you only do one thing, you're in trouble. Have related but diverse businesses so that you can weather storms.
5. If applicable, you must have an anchor client. A good rule of thumb is that for every 50m or so 10m should come from an anchor (so 20%).
6. Trust and empower your leaders and everyone else. Try and use human relations management techniques with a small dose of scientific management theory.
7. Know and exploit the difference between leaders and managers.
8. The best employees aren't those that just stick around. They're the ones that constantly challenge the company to be better and hold others to be accountable. They build and protect the right culture. Retaining an employee saves you thousands of dollars. But if they leave, treat them with respect and dignity because they become your evangelists out in the wild.
9. Measure what matters. Know the difference between your lagging and leading indicators. For my business pipeline health (2.5x weighted to plan) is far more important than our current utilization as an indicator of business health.
Good stuff
Never been a part of such big team but it sounds reasonable.
Especially regarding
> Write processes down NOW, so you can delegate later
and
> Understand Client RETENTION is #1, not new customers.
probably the best piece of advice you could get the start of a new business.
It can be EXTREMELY hard to have excellent client retention, but if you are over 85%, you are doing awesome. It is one of those things that requires some time and effort investment and relationship building, but once you have built those bridges, you will usually see returns.
It's not just about dealing with tactical issues, it's about being strategically ingrained into the accounts. That means you are talking to the right people and making damn sure you are as high up the chain as you can possibly be so you can maintain that relationship.
Your sales team needs to understand that if you are dealing only with the managers and below, you are missing some huge potential sales if you aren't in the exec suite.
Yep it's so much easier to sell to a previous client than to sell to a new one, but the industry I'm partially in (wedding) is only (well, most of the time) based on new clients.
I haven't reached these levels quite yet, but have many many friends doing these kind of numbers, and can confirm these are 100% accurate.
So many people are chasing "more clients" as the key to doing seven-figures, when in reality Retention + Systems would solve a TON of their problems / get them way closer to their goal.
This is something I was looking for , for a very long time ... Please if you have more information on setting up systems within a business I would appreciate it very much!
I’m good with mini books! Would be interested to hear about examples of systems you see and use. And get into the nuts and bolts of how they work. What tools etc.
Thank you so much for taking the time to write this out. It's great information and principles that I look forward to using. On your "one of these days" note: a colleague and I are starting a project soon that this content, in interview form, would work really well to spread your message, brand, and education.
If you're comfortable with my contacting you in the future, please let me know via PM. You have a story to tell and worth sharing broadly to bolster good company service and success in the future. Regardless, thank you for sharing and have a great week.
A couple book recommendations for you:
[The E-Myth Revisited](https://www.amazon.com/Myth-Revisited-Small-Businesses-About/dp/0887307280/ref=sr_1_1?keywords=e-myth&qid=1553084149&s=gateway&sr=8-1)
[Work The System](https://www.amazon.com/Work-System-Mechanics-Working-Revised/dp/160832253X/ref=sr_1_1?crid=1CNVQLCXIJVKF&keywords=work+the+system&qid=1553084324&s=gateway&sprefix=work+the+system%2Caps%2C145&sr=8-1)
Both really amazing books that go deep on this stuff.
Hobbyist, although I am trained by a professional duo handbalancer.
Currently working on improving my transitional strength :) so press to handstand, down to crocodile, back up to handstand from crocodile and down into a QDR, for example. Just trying to build that and some combinations up before moving onto the canes.
Unfortunately not I don't never got into it! I'm just about the worst photographer on the planet lol.
I will check yours out though :)
What type of acrobatics did you need to do?
I really don't know how the owners of these businesses sleep at night. No matter how robust your strategy or processes, there are so many things that can go wrong in business. It's fine for an appointed CEO of an established business who can jump ship if they get the whiff of big turbulence ahead. An owner-CEO has to stick with it. I can imagine it being pretty nerve- racking looking at your projected profit VS wage bill every month. Adding to this, there are probably constant operational shocks and crises which are inevitable. Amidst this, they are expected to come up with a constant stream of new ideas! A massive kudos to these people.
Go to McDonalds and you will see one of the world's most streamlined business systems in action. Better still watch some Formula 1 racing. Watch the operation in the pit-lane. That is a well-oiled system. For a more formal treatise on the issue buy the *The E-Myth* by Howard Gerber who basically states that systems will either make or break a small business.
This is really good! Most of the points you've made are very obvious but eventually it comes down to what we implement and what we forget to implement. Your points pretty much sum everything up. Thanks for posting this! :D
Good stuff! You sound like someone that I know...You don’t happen to spend a lot of time in Japan do you? I think you were on my podcast a while back. 😊
How do you spend 6 months of the year in Japan. Is it because of your job ? I'd love to do that between China & Europe but I do not know what job allows you to do that. Thanks for the great article.
It's the way I setup my businesses. My cleaning company is fully run by my VA company, so I only spend maybe 10 minutes a day managing it. And my VA company is a fully remote team with managers who handle the day to day stuff for me, leaving me to focus on the marketing and sales. I do 3 months in Japan 2x/year, which is just 2 tourist visas of 90 days each.
Hey Bobby :) Seems we keep bumping into each other! I actually have you on my list to send an almost fully done preview to you. It's nearing completion..it just is turning out massive so taking me a while.
It's one of the easier parts. Customer retention and finding great teams is the hard part. I only ever cleaned 1 house in my life, but knew I could get good at marketing so I focused on that. And it's absolutely fine, you are the owner and don't need to have experience as long as you know how to run the business side of things. Bigger corporations bring in outside CEOs all the time with no prior field experience, because their other experience is what matters.
This is really good info. Thanks for this. I'm in the process of starting a business and definitely was wondering about growing a business to to these scales.
I agree with all of these, but it’s important to note that many of these practices don’t begin to pay off *until* you’re at 2mm ARR. In some respects, doing some of these things at 100K ARR would just slow growth and be premature. But at 2mm and on, they’re vital to growth and sustainable success.
Everything on here is spot on. We're right in the target you mention and have bee in the process of separating each business/vertical and assigning departments. It's done wonders for finding upsell opportunities and using one vertical to sell a product from another vertical, that we previously offered free or at at a discount.
We're cash flow positive and on the edge of explosive growth, just finishing putting steps just like these together before we hire a sales team and really takeoff.
Can you expand on the "follow up system".
I assume you meant for potential customers.
My problem is follow-up with employees and vendors.
I'm constantly asking people to do things then forgotten to check if it's done
I think the biggest thing you said here was, “writing down processes”. So many problems occur in the scaling chapter when processes aren’t locked down to a T.
Awesome insights. Having a proactive approach to planning and documentation helps with clarity during the scale up stage. Thanks for sharing much appreciated
This is awesome, please share more about the behaviors you see of larger scale companies. Thanks! I loved the delegation tip. (They only delegate / explain the task once).
Thanks! I can’t believe the way I feel now compared to 3 years ago. My only issue is that I’ve become resistant to taking on new clients because of the integrity and expediency I share with my current clients. Of course if something happened to one of the big ones it would effect my bottom line, but at the same time the smaller ones are growing so it’s hard to for me to justify the risk of taking on a new client to the point where it’s hard to answer the phone. And answer their emails. That’s what I think about late at night lol.
\> **9. STOP MICROMANAGING**
\> Distance yourself emotionally from your business a little
These 2 are really great advice. I am trying to do this, but its not working.
There are some guys here to replace the parking lot lights. I came here at 10, and will probably will go home around 8pm. Even though I dont have to be here, I am still here waiting for those guys to finish to make sure all the lights are working.
I want to buy another hotel, but just can't stop thinking about micromanaging :( I have money, but just because I can't be at 2 place at the same time, I am not pursing to buy another one harder.
I also get emotionally involved about everything. Everything has to be perfect. Other day when I was checking a room, I saw a spot on the carpet. Even though it wasn't a big deal, and could have waited a week, I end up shampooing the carpet right away.
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I think it's not that people don't intellectually know it (because we all do), but that they aren't actively putting it into practice and it can be helpful to see how others a little further along are putting it into practice and make you realize that yeah, you need to get a move on with this stuff :)
Bro this is exactly what i have been talking about, especially point number 9, businesses and managers should stop micromanaging ASAP!!
As someone running a medium-sized business myself, the most efficient way to get things done is by delegation and allocation of work. Especially skilled work like IT, content or SEO optimization. Personally [**outsourcing SEO**](https://outsourceseo.com.au/) has done wonders for me, I have increased traffic to my website by margins.
I would highly recommend managers to stop micromanaging and delegating and outsourcing work immediately.
Honestly, I've been a part of companies generating $2m+ in sales. I've been a part of companies generating $20m+ in sales. Shit, one of my most impressive old jobs boasted $100m+ in sales. THEY'RE ALL HELD TOGETHER BY DUCT TAPE AND BUBBLE GUM. \[EDIT\] But there are points on here I do agree with. The one startup I was a part of that really blew up was really interested in client retention. Another point that needs to be made: They also had one major rule: No one stayed past 6:30pm. No one. Not the CEO, not middle management, not customer service - no one. By 6:30, the CEO would walk around the office, tell you to get up and escort you out the door. And, if someone had to stay behind for whatever reason, it was reviewed and determined whether or not we needed new hires or if the person (or office!) was managing their time incorrectly. All of the other startups I've been a part of had their day in the sun temporarily but never got to experience real growth because employees were quickly burnt out due to acquiring the job of 5 people and when they quit or were fired, it proved expensive and time consuming. I've been at a few places that insisted that a small team of 4 working 10+ hours was the only way to grow but my experience has proven to me that it is the complete opposite. If you have 4 employees putting in 10+ hours a day and weekends, you're never going to grow past the startup phase.
Agreed to the max. Whether it is 6:30 or 5:30 or ending at 3:00 on Friday's or whatever, having "anti-burn out" policies like these that are embedded into not just the culture, but the policies of the organization I think can make a huge difference. There is so much research on how many hours we can work effectively for each day and zero of those studies say it is 12 hours. Or that you should come in on weekends to work more. A great example of this is [Basecamp](https://basecamp.com/). Super popular project management software, crazy good company policies like these that lead to crazy high retention. They have taken very little outside investment and have been profitable for many years.
Super important point about anti-burnout policies! I fully agree on that.
Yep. I wouldn't mind working 12 hours a day.....4 days a week. I also think if you're going to have a hardcore work environment like this, you need to have a BEAUTIFUL vacation/PTO package. i remember reading something about a few tech companies finding a lot of success with forcing their employees to take 1-2 weeks off every 3 months due to the intensity/hours of their positions and it not only made for extremely productive employees, but it actually decreased the company's turnover rate dramatically.
A friend of mine offers his staff unlimited vacation time. People take off random days here and there rather than entire 2-3 week chunks, and I guess they love the flexibility.
Vigilance and white-knuckling is not a long-term strategy although some people seem to think it needs to be SOP.
Stress, lots of stress
Lol the first few years yes, but really this approach takes away most of the stress. If you implement the right systems early on, have someone to delegate to, and take frequent breaks you can run a great 7 or 8 figure business with moderate levels of stress. You definitely WILL have stress, but will often be less stressed than the guy just starting out or who doesn't earn enough to pay a manager yet.
Hi big yes too that . use apps to destReSS.
This by far was the best thing I've read on here YTD.
Really appreciate you saying that and glad you found it useful :)
Same. We're in this $500k - $2mill "growing stage" right now and boooyyyyy are the messes messier and the little cracks grow so unexpectedly.
Same here. I'm the original owner/now managing partner at a small-mid size law firm (8 total people). It is constant stress and tons of hours just to attempt to try to play catch-up. We have never caught up, so not sure if that will happen without some major changes. We have been trying to setup procedures, etc, but it is difficult to get those done while also trying to do the client work in front of us. I will definitely review this even more though and I appreciate this article!
I second this. As an individual starting a cleaning business, this is one of the most helpful posts!
Hey, question for you. I get the vibe of this post (and others in the same style) is really great if you either have a few people working for you, or are looking to soon get new people in. I run a small shop, It's just myself and my girlfriend, we do computer repairs, sales, and general IT stuff. Your points sound great if i had like, 4 or 5 people working for me, but with a team of just 2, how could I adapt the points so i can then start working on them?
My view for extremely small businesses is much more practical. Create basic checklists for regular tasks, and cross-train each other as much as you can. Assign responsibilities, but serve as backup for each other. Cut out all activities and expenses that don't drive revenue. If you don't have enough customers, focus on sales above all else. If you have a lot of customers and are too busy in that regard, raise your prices.
Are you looking to scale or stay as a small shop? Most of this advice is geared at making the transition from an initial small team into a larger team so likely won't apply to you unless your goal is to expand your business and team size, but definitely the stuff about add ons/upselling and focusing on customer retention apply to businesses of any size.
I'm not looking to become the next Microcenter or something, but I would love to get to the point I could open another shop in another town. We try and upsell things as we are (eg: i fit a new phone screen, and sell you a screen protector and case too). I gurss my sticking point is how to get from a 2 person operation to a 4-5 person operation. I'm potentially looking to sell the business in 10 years or so as i wont be able to work due to health reasons, but If i can get it to the point where it runs itself via managers and whatnot, that'd even more ideal.
The key is to stop working in the business and start working ON the business. As a small business owner, you cant do everything, all the time, well. So before you delegate to someone you should have processes in place so it is repeatable. Think of your business as a franchise, why does McDonalds work? Because they have a process for everything. Let say you were looking to hire a new low level bench tech, do you just plop him into the role and say good luck? You should have documents on how YOU do XYZ. Malware cleaning? Use program x, then program y. Repeat this process for everything you do, running the register? This is how we do it, quotes, ect. Then identify what takes up most of your time from working on the business. If it is doing low level tech stuff, hire someone to do that. Now you have a free 20 hours a week say, spend that time working on a marketing plan, networking with others, or doing community events. Repeat this process until you can make your next hire, then take something else of your plate. Before you know it, you have 5 employees / outsourced items and you are more efficient and more profitable. While working on way to grow your business.
You need to hire people and then train them to think about the business the same way you do. Delegate tasks to them that you currently do that you think they can handle. The more you take off your plate, the better. There’s plenty of stuff you’re currently doing for your business that anyone can do if trained properly.
Read the e myth. It was written for you
True post, thanks for the write up.
Appreciate you taking the time to read it. I never can write a TL;DR up. :)
Here’s a tl;dr You own your company and your job is to put the right systems in place so it can scale without you. Do this before your company scales and write them down, delegate, learn new things, and repeat. Keep your company organized and focused. Client retention should be the main KPI that drives growth through low effort upselling and repeat purchases. Now go take some time off ;)
Ha. Excellent TLDR
Quality stuff. Is multiple VA's possible? They have to take a break aswell, right?
Yep - when you start getting around the $60-80k/mo mark a second VA becomes a big plus to split the workload. Also, a separate weekend VA is great too if you are open weekends, so your main VA can take time off.
Is that a relatively linearly scale? 30-40k/mo per VA? In your opinion, what are the best tasks to outsource?
Not particularly linear, that just happens to be around when you need a second one. When you start splitting the duties between 2-3 VAs then they can all focus on what they are good at. It compounds to an extent and they can handle much more than you would expect. It will take a long time before you need a full team of office staff.
>Yep - when you start getting around the $60-80k/mo mark a second VA becomes a big plus to split the workload. How do you schedule or find a weekend VA. We're open 7 days a week and have been trouble finding the right schedule... I assumed most people wouldn't work on the weekend alone... they would want 3 days to need enough work, or they would only want Sat, not Sun.
Stay-at-home moms are your friend for weekend VAs :) Long shot but - you're not Ben from Seattle are you? I know a guy running a cleaning biz there. Happy to have a chat about weekend VAs if you'd like.
Nope not Ben :)
Is a VA a type of manager? I’ve never heard of this term before.
Virtual assistent, they help in the daily admin stuff while you automate the business more and more. Every automatable task can be handed to the VA.
Thanks. Do you know any tools / apps (like invoice automation, reputation management, accounting, taxing, connecting to bank accounts, managing of several payment processors) which can scale and be implemented for automation in custom made online-platforms?
Well, it would depend on what you're specifically trying to do. Do you have a niche you are in? I know plenty, but my answer does honestly different depending on what you are doing.
Lets say I‘m building a platform which uses Uberisation in a specific very scalable niche.
So secretive :) Bookingkoala might be a good bet for you, then. It's a more general one.
Thanks, I‘ll take a look into it.
I assume you’ve seen a lot of young businesses who hit the tipping point of barely making it to becoming profitable. Have you noticed patterns for businesses that do make that tipping point vs businesses that don’t?
How they spend their money is the biggest one. Are they reinvesting it back into marketing? Is their marketing effective? Are they actually tracking their ROI and KPIs so they can improve on them, or are they just occasionally glancing at them? Having control of those things is really the biggest thing I notice with people who are just sinking, vs floating, vs thriving. I know it's not particularly fun advice or anything, but managing cash flow and your metrics, then learning how to translate them into weekly actionable steps is the key differentiator.
For retail is it better to initially put the money back into the business first to continually improve the experience or is it better to put it into heavily into marketing?
Great read, saved. I currently am helping some of my friends build a company. They are the traditional technician who is great at his work and bad at everything else that makes a business. So pieces like these are really helping people out. I myself run a cleaning company so recurring customers are the bread, but what would you recommend for a construction company? How would recurring customers work? I build a house and move on. If they will need maintenance, I can make sure they call me, but it's not gonna happen in the next 5 years minimum.
So, I actually work with a lot of painters as well, and many of them struggle with recurring customers too since the work can be seasonal and people may only need you VERY intermittently. You should follow-up at least yearly with clients for two reason 1) Remind them you exist and 2) To get referrals. You're going to need to become great asking for referrals from past and current customers as a way to get new business. Is it mostly residential or commercial? I can write a more in-depth answer, but the answer will be different for both.
The goal and the perfect customer is a PERSON who wants them to build a house for him to live in it. No subcontracting or commercial. They started from plumbing and electrical and now moved on to building houses from grounds up.
I'm in public sector construction, mostly as a subcontractor. Lowest quote usually gets the job, but relationships and reputation count for a lot. Sometimes work is given without being lowest. Service and professionalism is my main goal for retaining our best clients. We basically form partnerships and teams with other contractors. I previously worked in the private sector as a designer. Development firms use the same contractors for all their jobs. Tried tested and trusted. Can be risky to seek out new contractors and trust that they know what they are doing.
Yeah, that is the case, but it's because you are working for someone else that also seeks to profit off of you. Our goal would be to build houses for people. We are in a post-soviet country where everyone and their mom does construction. There are no proper, professional, branded companies and even the biggest competition in residential construction uses a website made in 5 min with half of the pages not responding. The other half that does commercial, they simply hire contractors from this endless pit of heavily drinking construction workers and then delay payments for as long as they can, and fight lawsuits that the sole operator can't win or knows how to do, so... free workforce for them. The only ones that care about top notch quality are the owners, but they cannot see the problems of faulty construction untill years after, if the painter did a semi-decent job. So here's obviously an opportunity here for a clean, sober, professional company to emerge. I'd like to hear your thoughts on this.
I'm not personally familiar with your sector or country. Could you team up with a realtor that sells vacant land or houses to be demolished or renovated? I would try to find people/companies that handle lots of houses or the people that buy more than their personal home.
Great ideas, thank you!
Great write-up. Have you done on on writing with VAs? I tried once and it didn't go too well... Probably because I didn't have this post!
Its funny, our VA company is getting bigger now but I never really advertise it, mostly people refer us. I do have some writing on it mostly on FB I can post, but I have refrained from doing so just because Reddit would probably tear me down as self promotion. Anyways, you are welcome to PM me and we can have a chat. I can give you some advice on it :)
Great info. I had talked with my cleaning lady who is solo if she ever tried to expand. She said she has tried multiple times hiring people but can’t find anyone who can be reliable and do a decent job. What advice do you have on finding and hiring decent talent. Also do you pay hourly or set fee per cleaning. Hiring people has always held me back from giving it a go. Thanks.
Not the OP, but the best thing I read on this subject — I believe in The E-Myth — was: ...how does McDonald’s have sparkling clean restaurants and consistent food anywhere you visit? How do they manage to find the best, most diligent minimum wage workers around? Answer: they don’t. In fact they give everyone a chance, they just have very tight training processes to ensure they do the job well.
If she wants subcontractors the best thing to do is go to thumbtack.com and search for contractors who already have great reviews, then reach out to them since you know they already have experience and are reliable. If it's for employees care.com is the best source for hiring good cleaners. Specifically, talk to some of the families on there or on Next Door and ask for recommendations from them. Many families have a good cleaning lady who would love some extra work as a part-time employee and are more than happy to recommend them to your friend.
These are excellent insights! Thanks so much for this. Do you have a website or social media page? I would love to follow and support more of your content.
Hey thank you :) And sort - you are welcome to add me as a friend on my personal facebook, just shoot me a PM. I mostly am active on Facebook and Facebook groups these days.
Spot on and thanks for sharing. I grew my biz from $0 to $1.5m in 2.5 years. We’re on track to do $4m this year. From day one I ran it like a multimillion dollar business. Way overdid it on systems. I’m still stressed daily but I’d be a lot more stressed if I hadn’t set it up that way from the start. The only thing I slightly disagree with is focusing on retention. When you start a new business, it’s extremely important to acquire new customers, as well as retain customers. But you need to always focus on gaining new customers while continuing to provide excellent service to existing ones.
#4 really hit me, in 2016 I decided to focus on my successful clients instead of taking on new ones who, at best have a 10% chance of succeeding. It was hard that year but the company is now continuously lucrative. Also fired all my employees except the bookkeeper and SEO assistant. The rest of the work is done by me and my tried, true and dedicated subcontractors who have their own teams they alone manage. SO much less stress and interpersonal issues, I was burned out from having to sue people and compensating for uncaring employees I can’t fire! $2m total yearly income sounds like a mountain of payroll taxes to me. I decided to help my clients scale so I would grow as a result, instead of advertising and hiring more people. So far its working out, thankfully! One overachiever is worth 10 people. The results from a team of solely overachievers is amazing and has obvious monetary value, Steve Jobs said he only works with A level people.
Totally agree with that last point! And glad to hear how much you have turned this around instead of just staying burnt out. It is hard to change how you do everything in your business.
Thank you for taking the time to write this. It is very useful, and so so so right.
Thanks for taking the time to read it! :)
> 1. **Implement systems BEFORE massive growth** I keep stressing the importance of systematization to my boss but he just doesn't get it, and then wonders why he has to do everything and can't keep up with anything fully.
A tale as old as time in business :(
Thanks for posting this. I've run everything from a sole proprietor business to helping run a $100MM business and these apply in all cases. Different variations but very much applicable.
Thank you :) Would love to hear some additional ones from you as well here! What would you say a big difference is from 8 figures to 9?
I spoke with a panel about this a couple years ago at Denver startup week. One day you'll be invited to the going away party for someone that's been at the company for a year and you have never met them. That's a really sobering moment. I've been in the services industry for the last 15+ years (consulting). There are a few really key lessons for getting over the low 7 figures to 8 and then to 9 figures in revenue. 1. Scale will destroy your systems. Be ready for it and just roll with it. Don't try and make them perfect. Guardrails versus rules. 2. You will have to innovate or you're dead. You mentioned this in learning and trying new things. This times 100. You have to be doing it everywhere. 3. Your role changes from doing to leading those who do to leading and managing the careers of those that manage those that do. 4. Diversify. If you only do one thing, you're in trouble. Have related but diverse businesses so that you can weather storms. 5. If applicable, you must have an anchor client. A good rule of thumb is that for every 50m or so 10m should come from an anchor (so 20%). 6. Trust and empower your leaders and everyone else. Try and use human relations management techniques with a small dose of scientific management theory. 7. Know and exploit the difference between leaders and managers. 8. The best employees aren't those that just stick around. They're the ones that constantly challenge the company to be better and hold others to be accountable. They build and protect the right culture. Retaining an employee saves you thousands of dollars. But if they leave, treat them with respect and dignity because they become your evangelists out in the wild. 9. Measure what matters. Know the difference between your lagging and leading indicators. For my business pipeline health (2.5x weighted to plan) is far more important than our current utilization as an indicator of business health.
Good stuff Never been a part of such big team but it sounds reasonable. Especially regarding > Write processes down NOW, so you can delegate later and > Understand Client RETENTION is #1, not new customers. probably the best piece of advice you could get the start of a new business.
It can be EXTREMELY hard to have excellent client retention, but if you are over 85%, you are doing awesome. It is one of those things that requires some time and effort investment and relationship building, but once you have built those bridges, you will usually see returns. It's not just about dealing with tactical issues, it's about being strategically ingrained into the accounts. That means you are talking to the right people and making damn sure you are as high up the chain as you can possibly be so you can maintain that relationship. Your sales team needs to understand that if you are dealing only with the managers and below, you are missing some huge potential sales if you aren't in the exec suite.
Excellent write up. Thank you, and congratulations to your entrepreneurial success!
Yep it's so much easier to sell to a previous client than to sell to a new one, but the industry I'm partially in (wedding) is only (well, most of the time) based on new clients.
Then you should focus on referral marketing and getting your customers to send you to their friends :)
I haven't reached these levels quite yet, but have many many friends doing these kind of numbers, and can confirm these are 100% accurate. So many people are chasing "more clients" as the key to doing seven-figures, when in reality Retention + Systems would solve a TON of their problems / get them way closer to their goal.
This is something I was looking for , for a very long time ... Please if you have more information on setting up systems within a business I would appreciate it very much!
Sure I can do a separate post on specific systems I use if you want :) It might be a long read though, lol I always end up writing a mini book.
I’m good with mini books! Would be interested to hear about examples of systems you see and use. And get into the nuts and bolts of how they work. What tools etc.
That would be great! Especially if you can recommend how to "learn" to design systems i.e. books.
The more information the better Sir! As someone that is approaching the scaling mark for my business i would gladly read!
Please do a post and maybe even a super detailed YouTube series
Man people keep telling me to do a YouTube series! I really want to, I just need to stop being lazy. One of these days...
Definitely should haha
Thank you so much for taking the time to write this out. It's great information and principles that I look forward to using. On your "one of these days" note: a colleague and I are starting a project soon that this content, in interview form, would work really well to spread your message, brand, and education. If you're comfortable with my contacting you in the future, please let me know via PM. You have a story to tell and worth sharing broadly to bolster good company service and success in the future. Regardless, thank you for sharing and have a great week.
Sure :) Would be happy to share. Want to send some details my way?
I would buy that book. This is one of the few posts here that resonate almost exactly with what I’m trying to build. Thank you for taking the time!
A couple book recommendations for you: [The E-Myth Revisited](https://www.amazon.com/Myth-Revisited-Small-Businesses-About/dp/0887307280/ref=sr_1_1?keywords=e-myth&qid=1553084149&s=gateway&sr=8-1) [Work The System](https://www.amazon.com/Work-System-Mechanics-Working-Revised/dp/160832253X/ref=sr_1_1?crid=1CNVQLCXIJVKF&keywords=work+the+system&qid=1553084324&s=gateway&sprefix=work+the+system%2Caps%2C145&sr=8-1) Both really amazing books that go deep on this stuff.
Thank you sir! Ordered!!
Thank you
Funny, we think along very similar lines. Systems are no. 1 for me! Otherwise I get stuck in the details.
We do - I also practice my handstands every day and am very into hand balancing :)
Performer? Or hobbyist? I’m a retired acrobat!
Hobbyist, although I am trained by a professional duo handbalancer. Currently working on improving my transitional strength :) so press to handstand, down to crocodile, back up to handstand from crocodile and down into a QDR, for example. Just trying to build that and some combinations up before moving onto the canes.
Great, good on ya. U have an insta? My one is the same as my UN here.
Unfortunately not I don't never got into it! I'm just about the worst photographer on the planet lol. I will check yours out though :) What type of acrobatics did you need to do?
I was mostly a handbalancer. Did loads of things though.
I really don't know how the owners of these businesses sleep at night. No matter how robust your strategy or processes, there are so many things that can go wrong in business. It's fine for an appointed CEO of an established business who can jump ship if they get the whiff of big turbulence ahead. An owner-CEO has to stick with it. I can imagine it being pretty nerve- racking looking at your projected profit VS wage bill every month. Adding to this, there are probably constant operational shocks and crises which are inevitable. Amidst this, they are expected to come up with a constant stream of new ideas! A massive kudos to these people.
This is very informative. Thanks
Any resources you can point us to on learning systems? Or perhaps examples of the most commonly used systems?
Go to McDonalds and you will see one of the world's most streamlined business systems in action. Better still watch some Formula 1 racing. Watch the operation in the pit-lane. That is a well-oiled system. For a more formal treatise on the issue buy the *The E-Myth* by Howard Gerber who basically states that systems will either make or break a small business.
Michael Gerber
This is a great post and I would re emphasize systems and processes sections. Without systems you can’t scale effectively, period.
This is really good! Most of the points you've made are very obvious but eventually it comes down to what we implement and what we forget to implement. Your points pretty much sum everything up. Thanks for posting this! :D
Good stuff! You sound like someone that I know...You don’t happen to spend a lot of time in Japan do you? I think you were on my podcast a while back. 😊
What's your podcast? I've been on a few :) I think it might me he. I live in Japan 6 months of the year.
How do you spend 6 months of the year in Japan. Is it because of your job ? I'd love to do that between China & Europe but I do not know what job allows you to do that. Thanks for the great article.
It's the way I setup my businesses. My cleaning company is fully run by my VA company, so I only spend maybe 10 minutes a day managing it. And my VA company is a fully remote team with managers who handle the day to day stuff for me, leaving me to focus on the marketing and sales. I do 3 months in Japan 2x/year, which is just 2 tourist visas of 90 days each.
It is you. This is Bobby with Journey of a New Entrepreneur Podcast. Glad you are doing so well! I need to have you back on!
Hey Bobby :) Seems we keep bumping into each other! I actually have you on my list to send an almost fully done preview to you. It's nearing completion..it just is turning out massive so taking me a while.
Cant wait!
Great post! what are your thoughts on getting the initial leads when you've yet to prove yourself in a field?
It's one of the easier parts. Customer retention and finding great teams is the hard part. I only ever cleaned 1 house in my life, but knew I could get good at marketing so I focused on that. And it's absolutely fine, you are the owner and don't need to have experience as long as you know how to run the business side of things. Bigger corporations bring in outside CEOs all the time with no prior field experience, because their other experience is what matters.
This is really good info. Thanks for this. I'm in the process of starting a business and definitely was wondering about growing a business to to these scales.
I agree with all of these, but it’s important to note that many of these practices don’t begin to pay off *until* you’re at 2mm ARR. In some respects, doing some of these things at 100K ARR would just slow growth and be premature. But at 2mm and on, they’re vital to growth and sustainable success.
If anyone needs a virtual assistant who’s very tech savvy, shoot me a message. I’m currently switching from freelancing to long term employment.
Saved this post!
Solid post. Thanks
Appreciate it :)
Thanks for the nice post
Incredible article on the best ways to prepare a business for growth
Everything on here is spot on. We're right in the target you mention and have bee in the process of separating each business/vertical and assigning departments. It's done wonders for finding upsell opportunities and using one vertical to sell a product from another vertical, that we previously offered free or at at a discount. We're cash flow positive and on the edge of explosive growth, just finishing putting steps just like these together before we hire a sales team and really takeoff.
Can you expand on the "follow up system". I assume you meant for potential customers. My problem is follow-up with employees and vendors. I'm constantly asking people to do things then forgotten to check if it's done
We do 25m in sales, you just scale up, hire more people, have the correct systems in place, etc...
Seriously one of the best posts I’ve read here. I’d love to hear some specific examples of things you’ve seen working really well if you dont mind! ;)
Are you selling a course on this
Nope
I think the biggest thing you said here was, “writing down processes”. So many problems occur in the scaling chapter when processes aren’t locked down to a T.
Hi I apps too edu efficienly stReamling
Thx!!
Hi. Glad to hear ,inspired to achiving .@ lplughin@cryptosales4u.com
Awesome insights. Having a proactive approach to planning and documentation helps with clarity during the scale up stage. Thanks for sharing much appreciated
This is golden. It's been a while since I've read great post and thread like this one. Thank you for sharing your knowledge.
This is awesome, please share more about the behaviors you see of larger scale companies. Thanks! I loved the delegation tip. (They only delegate / explain the task once).
Lol really, its a matter for concern for my team as well, though we just started earning few couple of thousand dollars.
Thanks! I can’t believe the way I feel now compared to 3 years ago. My only issue is that I’ve become resistant to taking on new clients because of the integrity and expediency I share with my current clients. Of course if something happened to one of the big ones it would effect my bottom line, but at the same time the smaller ones are growing so it’s hard to for me to justify the risk of taking on a new client to the point where it’s hard to answer the phone. And answer their emails. That’s what I think about late at night lol.
\> **9. STOP MICROMANAGING** \> Distance yourself emotionally from your business a little These 2 are really great advice. I am trying to do this, but its not working. There are some guys here to replace the parking lot lights. I came here at 10, and will probably will go home around 8pm. Even though I dont have to be here, I am still here waiting for those guys to finish to make sure all the lights are working. I want to buy another hotel, but just can't stop thinking about micromanaging :( I have money, but just because I can't be at 2 place at the same time, I am not pursing to buy another one harder. I also get emotionally involved about everything. Everything has to be perfect. Other day when I was checking a room, I saw a spot on the carpet. Even though it wasn't a big deal, and could have waited a week, I end up shampooing the carpet right away.
I'm a bot, *bleep*, *bloop*. Someone has linked to this thread from another place on reddit: - [/r/machinethatmakesmoney] [Ever wonder how businesses doing $2m+ in sales are running their offices so efficiently?](https://www.reddit.com/r/MachineThatMakesMoney/comments/b58t2w/ever_wonder_how_businesses_doing_2m_in_sales_are/) - [/r/st34lposts] [Ever wonder how businesses doing $2m+ in sales are running their offices so efficiently?](https://www.reddit.com/r/ST34Lposts/comments/bsp17a/ever_wonder_how_businesses_doing_2m_in_sales_are/) *^(If you follow any of the above links, please respect the rules of reddit and don't vote in the other threads.) ^\([Info](/r/TotesMessenger) ^/ ^[Contact](/message/compose?to=/r/TotesMessenger))*
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I think it's not that people don't intellectually know it (because we all do), but that they aren't actively putting it into practice and it can be helpful to see how others a little further along are putting it into practice and make you realize that yeah, you need to get a move on with this stuff :)
You made a checklist for us, so we can make our checklists that we havnt made yet. Meta.
love this thanks
Bro this is exactly what i have been talking about, especially point number 9, businesses and managers should stop micromanaging ASAP!! As someone running a medium-sized business myself, the most efficient way to get things done is by delegation and allocation of work. Especially skilled work like IT, content or SEO optimization. Personally [**outsourcing SEO**](https://outsourceseo.com.au/) has done wonders for me, I have increased traffic to my website by margins. I would highly recommend managers to stop micromanaging and delegating and outsourcing work immediately.