So… How to scale your business? The million dollar question. Everybody starts their business or dream with one goal in mind: to grow. Of course we all want to build a thriving business that will grow and expand and become as wonderful and as fruitful as it can possibly be. When we think of scaling our business the most obvious way that we can think of is getting more clients. Getting more sales. Right? The more you can get your name out there, the more clients you get, and the more sales you can make, The more your business will grow and thrive. This is what it would seem, and this is what most people believe when they start a brand new business. But there is another important piece. Your business needs to be profitable and efficient in order to scale. Scaling is to increase or to multiply what you already have and what is already there. So you only want to scale something that you know works. Right? If what’s already in place is an inefficient, disorganized money eater, or has weak parts, when you try to scale, it’s not going to fix those problems and those weaknesses, you’re likely just going to still have those but on an even bigger scale.
So no matter how small your business is right now, your goal should be to really systemize and organize the business you have, smooth out all the kinks, and make your tiny operation a tight ship so that as you create a plan to scale, your growth will be controlled and the efficiency of your operation will produce more noticeable and faster results.
I’m going to walk you through 5 steps for scaling your business. Each step is important in not only scaling but in making sure you’re in the right position to scale, so that as you take on more clients and more sales, you will have a strong enough structure to support the volume, and that increased volume will lead to noticeable growth in revenue.
Step 1: Decide the Way You Want to Scale
The first step in scaling your business is to decide – in what way do you want to scale? There are many different ways to scale a business. Scaling is not simply just bigger and more – although that is the general idea. But there is a great deal of strategy that goes into scaling.
I’m a visual person and sometimes its helpful for me to picture things in a more visual way, so when I think of building a business I think of it as literal building blocks. I like to imagine my business as a city and all of the products that make up my business are the buildings that make up this imaginary city. So when you’re building a city you can build outward horizontally and you can also build vertically. In the early stages of a new business, often times, we’re building outward, experimenting with different types of offerings. I talked in length about getting to know your products or offerings in episode 8, which I would encourage you to go back and listen to later as it relates to this topic and you might find it helpful if you’re looking to scale your business.
So, back to the building block analogy – imagining your different products or offerings as various buildings that make up your city– You might start out doing weddings, that’s one building, and then you might do some a la carte sales (parties, corporate events, holidays orders) that’s another building. Maybe you have an online shop that’s bringing in some revenue. Or you might decide to try offering group workshops…So there are all of these different buildings that are starting at the ground level. That’s building horizontally. Then, as you book more clients and make more sales, some of these will start to grow vertically. As time goes on, you might have one or two revenue streams that outperform all the rest. Those are your skyscrapers. Those will be the thing that draws all the attention to your city, and the ones that produce the most for you. When you think about scaling, one strategy is to feed and nurture the income streams that are performing best. So, with this particular strategy, those skyscrapers are going to be the thing that you will want to really pour your resources into because they are going to produce for you and help you to continue to grow. Your city may just have one building, meaning you just have one product and that’s totally fine. For example, you just offer wedding design. There are a lot of business that are really successful just offering one product. There are benefits to this because, by having just one singular product (or if you’re in a service based industry – having one cookie cutter approach), you can focus all of your energies on designing, pricing, marketing and selling that one product and in fact, sometimes it can be easier to grow and scale quicker just focusing on one thing.
If you do have multiple buildings in your city, you can also pour resources into the smaller buildings in hopes that those will grow and turn into skyscrapers as well. By having several revenue streams that perform moderately well, you can earn a decent bottom line.
Now, with each of your different products (or buildings) there are different ways that you can grow them vertically and make money. You can sell a lot of quantity of one product at a low price point, and you can also sell a limited quantity at a high pricepoint, or any formula in between. These are different business models and again, you get to decide what is the best way to grow. How you decide that may come down to a lot of different factors.
It matters where you see yourself in 10 years. If you want to build a large team, and scale into a large company, you may want to scale and grow your team to accommodate a higher quantity of orders. If you want to keep your business small but still producing significant income, you may consider taking on lower volume but offering a high-end product or service at a premium price point. Refining your business model to produce better results is sometimes a process of trial and error – and it’s important to get in the habit of evaluating and analyzing your performance year after year, and seeing where you can make tweaks in order to produce at better efficiency, increase your revenue, and increase your profits.
The point is, there are lots of ways to scale your business and you get to decide which parts of your business you want to focus on, and which model you want to use to scale.The important takeaway here is that if your goal is to make as much money as possible, you’re going to want to make wise financial decisions in where you invest your time and your resources. By looking at the different areas of your business and being clear on how they are each performing financially.
This brings me to the second important step when it comes to scaling a business, which is: Knowing Your Numbers.
Step 2: Know Your Numbers
No matter what way you are wanting to scale, one thing is for sure and that is that if you want to scale your business, you are going to have to know your numbers. Meaning, you are going to have to understand exactly how much your product sales are bringing in, exactly how much it costs to produce each one, in other words what you’re spending on each project, and how much is spent monthly or annually just to keep your doors open. Because in addition to the cost that goes into your product or service, there are also overhead costs like rent, utilities, staff, transportation, internal supplies, and maintenance.
If you don’t know exactly how much profit you’re making on a product, you can’t properly make decisions like how much you should invest in marketing that part of your business, or in building out more products, or how many jobs you need to book to profit a certain amount each year, or how long it will take to grow to a certain level of income. So when it comes to being able to plan and strategically guide your business towards a certain result, it all begins with understanding your financial situation. At a basic level, whenever you take a new job, you should be able to estimate exactly how much you’re going to profit on that job. And if you are not going to profit, then you shouldn’t take the job. At the end of the year, you want to look back on your different revenue streams and see the total sales that each one brought in, as well as the overall profit margin, and this can help you to refine things for the following year. Like, maybe you need to tighten up spending so your profit margin is higher next year. Or, maybe your expenses cannot be reduced so you need to raise your pricing to widen that profit margin.
So, the first step in scaling your business is understanding your numbers really well so that you can decide which areas of your business have the potential to perform best, and that will tell you what areas you should scale.
Step 3: Streamline Your Operation
Step 3 for how to scale your business is to streamline your operation. Imagine that you have 8 people rowing a boat. Let’s say 4 of the rowers are really working hard, and the other 4 rowers have their paddles in the water but they’re not really rowing as well as the rest of the team, so they’re actually just slowing down the boat. As the boat captain, without paying attention and noticing who is actually contributing to the boat’s efficiency and who isn’t, you add 4 more rowers to the boat, hoping that it will make it go faster. Now you’ve added more weight to the boat, and those 4 rowers who have been working hard from the beginning, now have to work twice as hard, yet the boat still isn’t going any faster. In reality, if you had just assessed who was performing and who wasn’t before adding more rowers to the boat, you then could have removed the 4 lazy rowers from the boat, and the boat probably would have doubled its speed with just those 4 original, stronger rowers just by shedding the dead weight.
When you think about scaling your business, it’s so important to recognize what areas of your business are producing and which ones aren’t. Likewise, it’s important to make sure that your operation is efficient before adding on more products or services. If you are a florist taking 4 weddings per month, and not seeing the profit that you’d like, you might start taking 6 or 8 weddings per month, thinking that will earn you more money. But if your process is inefficient, or your pricing structure is messy and uncontrolled expenses are eating into your profit, adding more weddings to your plate is just going to have you working twice as hard and still seeing minimal financial improvement. Instead, if you really take a close look at your process and look for ways to re-structure your pricing or lower your production cost, you may find that you can actually earn more money by working the same amount or even working less.
Your business is like a machine that has an input, a process, and an output.
The input is your potential clients. There are ways that you can screen or filter these clients to make sure that when they enter your sales process, they are the right fit so that you avoid wasting precious time and energy on ones who are not the right fit for what your offer. Using direct and detailed language on your website, and making it easy for clients to find pricing information, even downloadable information guide about your services are strategies that can help you to educate your clients and guide the right ones into your sales funnel while repelling the ones who aren’t a fit. If you are spending a lot of your time on phone consultations, perhaps there is a way that you could bypass this step. At the beginning of my business, I used to meet with each of my clients in person. I later realized that this was completely unnecessary and that – not only could most of this communication could be done over the phone – a lot of it could be done through automation. I eventually designed a questionnaire that was integrated into my web inquiry form, eliminating the step of having to verbally gather basic information from each client. I created a more detailed and informative wedding page for my website to help screen and qualify clients.
Your process is everything that happens from sales to production. If you think of your business as a machine, when you look closely and really examine each of the parts, there are probably many tweaks that can be made to help create better efficiency in your process, saving you time which is a valuable resource. For example, if you notice that you are spending too much time on proposals, consider purchasing template that can streamline your process. Maybe you can purchase a software or perhaps there is another creative system that can be designed to make creating recipes and ordering your flowers more efficient. You can examine your sales strategy and see if there are ways you can decrease fallout in your sales process. Gather customer feedback and see if you can gain any insight from your customers for how you can better meet their needs to close more sales.
Examine your production process and see if there are any weak points there that are affecting your efficiency or your profitability. In taking a closer look at your pricing structure, you might notice that you’re using the same markup you had when you started your business, but since then you’ve grown and because of that your expenses have gone up. Or, you might do the math and realize that one of your staff members is being paid too much when you consider the time it’s taking them to complete one arrangement. Or, you might see that your transportation costs are eating too much into your profit, and you need to raise your transportation fees. Or, you may be able to reduce your workload by letting go of tasks that aren’t serving your bottom line, and by working smarter, not harder.
Fine tuning and tightening up your operation in this way will help ensure that as you scale up your sales or your offerings, your bottom line will increase along with it. If your ship has weaknesses and is letting on water, the last thing you want to do is build a bigger ship with the same design. You have to identify and fix the problem before you can scale. It’s the same with scaling your business.
Step 4: Grow Your Team
You might find that you want to scale, but you can’t find the time in your schedule to take on any more than you already are. This is usually an indicator that you need to outsource some of your workload by hiring an assistant, or hiring a team to help you with the workload. This brings me to step 4, which is growing your team.
Now, to be quite honest with you, this is one area I do not consider myself a true expert in because the business model I chose for myself involved taking on fewer jobs at a higher price point, and finding as many ways as possible to streamline my process and work smarter, not harder to reduce and boil down my workload so that I could still produce a suitable amount of revenue to support my lifestyle without having to grow my team. I wanted the ability to be able to step away from my business if it came time for me to start a family, and I wanted to also explore opportunities that would allow me to work from home – such as offering digital products and online education. That’s just a bit of background on my personal business journey, but without getting too far off topic… While I don’t have a full time staff or a large team, I definitely could not do everything that I do all by myself, and I do believe I have some tidbits to impart when it comes to building your support team.
There did come a time in my business where I decided that I wanted to take on larger, more detailed weddings and I could no longer handle all of the production for those weddings by myself. So I knew I was going to have to find help. Many florists who strictly focus on events utilize freelance designers or independent contractors for the floral production portion of their business. I went through some trial and error when it came to finding quality designers to add to my team. Truthfully, I had to go through a few bad eggs to find the gems and I think that is sometimes just part of the journey. I tried training people from the ground up, because I learned very quickly that this industry has no shortage of people who are inspired and want to learn. But I also found that being inspired and eager to learn is not always enough. And that is not to say that you can’t successfully train someone and build them up into a valuable member of your team. But there are other things that come into play like attitude and work ethic, dedication, loyalty, and really taking the job seriously. If a lot of those things are missing, I think that it’s easy to find yourself at a point where you realize you are expending more energy and resources on a person than you can afford to. You have to remember that you are running a business, it’s not personal. I am a passive peacemaker at heart, and I naturally tend to put others before myself and this was a hard lesson for me to learn because I didn’t want to let anyone down. A huge part of me just wants to see other people blossom and succeed, but I had to learn to put my business first, and that was an important step for me to really be able to scale and to grow.
I found that it’s much easier to train someone in your style and your method of doing things when they already have a base knowledge of floral design. I realize that people with design experience can be a bit harder to find, but they are out there, and I would advise you to always be on the hunt for those who do have experience because that will save you a lot of time and money if you can find people who you do not have to teach everything to. Just like hiring for any job, it’s okay to seek out a certain level of skill. I realize that we are in a very niche industry, but that’s not to say that it can’t be done.
Other skills besides technical skill that I really look for are a positive attitude and work ethic. I pay close attention to the people who join me on events, and I will say that anyone who I see taking initiative, having a positive, can-do attitude and being quick to pick up a broom when there is a lull instead of waiting for instruction, those are people who I am always happy to have back and who I am happy to pay a decent hourly rate because the more I have to hold someone’s hand or tell them what to do every moment, that more that takes away from the big picture and when someone has the initiative to take action on their own, that gives and contributes to the team and I see so much value in that.
I think the best way to find quality people to add to your team is just to try out as many different people as possible, give a lot of people a chance, and just observe and pay close attention to their strengths and how they can add value to your team. If someone messages you and expresses interest in joining your team, allow them to assist on an event or on a production day. Allow them to take ownership on a task, whether it’s designing one welcome piece or bud vases, so that you can observe their design skills, but also observe how they take initiative, and how they work with others. Notice the speed in which they work. Do they work at a leisurely pace or do they understand the sense of urgency and respect that you are paying them for their time? Notice these things as much as possible then, invest in the ones who bring value to your team by having them back again, paying them fairly, being attentive to their needs, offering them more learning opportunities and finding teachable moments to help them grow.
Before you pour everything into the first person who expresses interest in being on your team, make sure you test the waters and always keep the door open for new people to have the opportunity join your team.
Having a positive team culture is very important to me. I try to make sure that we have enough help on production days so that we are never working past 5pm. I would rather pay an additional person and have us all go home after 6 hours or 7 hours than put all the pressure on myself and one person to get things done and we both are working until 10pm and exhausted the next day. I try to respect people’s rates, make sure we get breaks when we need them, and I just really try to make sure we have fun. I don’t want my weddings to be a stressful experience for people, I want them to be enjoyable. Because that positive energy trickles down into the work that goes out the door and into the hands of my clients and I truly believe that it makes a huge difference.
Step 5: Increase Sales
Now, the final step in scaling your business is probably the most obvious one that most people think of when they think of scaling, and that is increasing your sales. Obviously we all want to get more sales, and this can be the most difficult part for any of us to really master. I do think that sales strategy is an entire episode in itself, which I would definitely love to expand on in the future. But for today, I will just share my top 3 strategies for getting more sales. I do want to mention that some of these strategies are specific to the floral industry since I believe that is what will be relevant to the majority of my listeners but if you are a non-florist listening, take from this what you can…
There are a couple different factors in making more sales. One is growing your client base and increasing the quantity of your sales, and another is increasing the quality of your sales.
The first strategy I want to share with you has to do with expanding your client base and that strategy is to under-sell, over deliver with each and every one of your clients. And you may wonder what this has to do with gaining new clients, but truthfully it has everything to do with it and the reason for this is because your clients word of mouth is your most powerful form of marketing. When it comes to customer service, while it might be our first instinct to promise our clients the world and dream big in the sales phase, sometimes in doing this we set ourself up for a potentially difficult expectation to meet – especially when we are starting out and still learning. Instead, I’ve found it’s best to set reasonable expectations for your clients that you know are within your skill level and within their means, and then over deliver on the event day. Give them the most incredible experience you possibly can and really blow them away so that they will be overjoyed that they hired you and tell everyone about you. Do your best to make sure that every client’s experience is a positive one.
My second piece of advice has to do with increasing sales in both quantity, and quality which is to focus on building planner relationships. It’s important to establish relationships with wedding planners especially if you are trying to eventually break into a more luxury market, because most brides and grooms in the luxury arena will hire a full service wedding planner and it will be the planner who is going to be reaching out to all of their vendors. When I was trying to get into the high-end wedding space I decided that one way to work with more planners was to just make things easy and accessible for them. So I created a document that I could share with planners that they could save on file and share with their clients. I called the document my “Pricing & Services Guide” and in the document I included plenty of visuals, pricing and packages, and information about my brand and what was unique and set me apart. I collected a list of planners from instagram who’s styles I liked and who I was interested in working with, and I spent a day locating their emails and then at the beginning of the new year I spent one day sending an introductory email to each of those planners. I made sure to make the emails personal and not spammy, and I include the document that I created. This helped me to get on quite a few planner’s radars that I probably wouldn’t have had I not reached out. And sure enough, a few of them gave me the opportunity to work with them that next season. Just like with clients, and this is something that I always say, is that you can’t just wait for your dream clients to come to you. You have to take action and you have to go and get them. Take every opportunity to put yourself out there and form those connections because the more connections you have, the more opportunities will come your way.
Finally, my third strategy for increasing sales has to do with increasing the quality of sales, and that strategy is to continue to raise your minimum. I think that there is a lot of hesitation when it comes to setting or raising minimums, that has to do with fear of losing opportunities. But I would argue that by not setting a minimum, you lose more opportunities. Something I learned midway into my career that came as a bit of a shock to me was that not everyone is looking for the cheapest option. In fact, as you get into the luxury market, sometimes people are seeking just the opposite. The belief that everyone is looking for a deal is a limiting belief that many of us fall into in our humble beginning stages of our business. We want to please everyone and we think the way to do that is to be affordable. But the truth is, there is a whole other population of people in the world who value artistry and fine attention to detail, and who are seeking quality, not a deal. There are some who are looking for the best of the best. Imagine that. The second limiting belief that held me back for many years, was the belief that that best of the best couldn’t be me. When in reality, I was the only person stopping me from becoming that. I could become the best of the best and so can you. Placing a high value on your work can only lead to bigger and better things. You have to let go of the belief that you will miss out on things if you set a minimum. When the reality is, the only thing you will be missing out on is low budgets. What you will be gaining is a seat at the table where the real magic happens. So, I ask you, what are you waiting for?