Episode 179: Stop Obsessing Over Scale
In the online world, we’ve been brainwashed to believe that scale equals success, and the result is a constant quest to make more and more money and grow our business. But what if scale isn’t what it’s all cracked up to be? In this episode, we’re talking about all things scaling and how we need to stop this obsession, as well as my take on the two ways to make more money as a service business.
If there’s one thing the online business world is exceptionally good at it’s taking an existing concept and then using it to market and sell products. That’s definitely what’s happened with the concept of scale — and the overwhelming message is that you MUST scale to succeed.
Before we get into this, if you want to make more money, great. I’m all for it. But there’s a fundamental misconception in the online business world that scale immediately means more money and that scaling is the only way to do that.
I actually remember when I started hearing people talking about scale in the online business world as a shorthand for making more money, and as someone coming from the tech market, I was confused as this is a gross oversimplification.
The concept of scale is motivated by the desire to grow, but it’s not just “how to make more money,” but ensuring the business itself has the foundation to grow. It’s about capacity and capability — not cash. It’s about taking the actions required to be able to manage growth. We’re talking super sexy stuff like systems and staffing to make that plan happen.
Typically, scale is about finding a way to grow revenue rapidly without having to add resources and extra cost at the same rate. When people say they want to scale as a freelancer or agency owner, what they really mean is: I want to make more money. Scale may not be the way to do that because not all growth is about scale. Incrementally increasing revenue isn’t necessarily about scale.
So, let’s call what most of us want to do what it is. It’s not scale. It’s to make and KEEP more money.
Pick Your Path as a Service Business Owner
Now that we know what our actual goal is, let’s stop worrying about scale and get to the heart of the real question: How do we make more money?
As a service business owner, there are two real paths to doing this assuming you want to keep working with clients. (Because, elephant in room, yes, I know you can make a zillion dollars with a course or program overnight, okay?)
If you’re a freelancer or solo business owner and would like to stay as a party of one, then the fastest way to make more money is by using packages, pricing, and positioning. This is where breaking out of charging low rates and doing anything for everyone comes in. You need to get super clear on what you offer, charge accordingly, and position yourself as an expert.
Once you’ve done that, then you can start to focus on creating premium services at a premium price. Sometimes, this will require you finding a different type of client or a new market — but it’s 100% possible.
If you want to build a team, or what I call a micro-agency where you’re leading a team of people so you’re able to grow, the fundamentals around price and positioning are the same, but you need another layer of leadership development, team management, and project management involved. The plus of this approach is that, in time, you can start to make leveraged income from the work your team does.
The agency route is definitely a longer-term play, so deciding on what’s right for you really comes down to how you want to run your business and how you want to spend your time. Personally, I want to spend my time leading, mentoring, doing high-level strategy, and new business development, so the agency route is perfect for me.
Want to Make More Money? Spend Less of It.
Earlier on in my freelance days, I wasn’t interested in leading a team, so I focused on maximizing my revenue and my profit. I kept my expenses way down to the point my accountant was constantly telling me to spend more money.
Here’s a truth bomb: If you want to make more money, spend less of it. Be a better steward of it and become discerning with how you invest it. We need to stop seeing everything as an “investment” in our success and understand that to run a service business — aside from some baseline strategy and support — you don’t need a lot of tools, three paid masterminds, and seven coaches.
You just don’t. You need to do the work, make the money, and spend LESS of it. A good way to do this is to decide you’re going to pay yourself more, create a budget so you’re paying yourself first, and then determine your expenses. When you see it this way and that buying a $3k program means you may not get paid, you’ll be much more discerning.
While I’m not the budget police, I know how powerful this can be, and it’s a great way for us to stop spending our money chasing scale when scale isn’t even the actual goal.
Scale is beside the point as we’re not growing Google; we’re building a lifestyle-driven business to support ourselves — and paying ourselves should be the most important thing we do.
So, next time the “need to scale” gets into your head, check in, figure out what your real business model is and how to maximize that for success. It’s completely impossible to scale something that’s not built on a solid foundation. If you’re struggling to find clients or close sales, fix those things first. If you’re growing a team and you need to invest more time/energy into getting your team where they need to be to serve more clients, do that instead of buying a five-step blow up your agency overnight blueprint from a FB ad.
Making more money, and growing your business is in your control; you just need to opt-out of the hype and realize what your real goal is.