Scaling a Small Business

If you have ever started your own business, or are thinking about starting your own business, more than likely you have followed this familiar story line.

When you first start your business, you likely don't have that many customers yet. Even though your product or service might be extremely valuable to someone, you more than likely have more time than money. That means as CEO you end up doing everything in your company from end to end, instead of paying someone to do steps for you. This could include things like answering customer questions, creating invoices and billing, figuring out your website, keeping track of receipts, e-mail campaigns and handling payments.

All of this on top of doing what you actually started your business for. For awhile, that works. Eventually, you will get to a point that you get maxed out. Taking care of all these things, including producing what makes money consumes all the hours in your day. In order to make more money than you currently are you can either figure out how to make things more efficient (which can only go so far), you can raise your prices, or you can scale your business and get some help.

The point of this post is to address the scaling part, because it is probably one of the toughest to do. It is also the most rewarding. Usually people start their own company to bring their unique talent or their unique vision to the rest of the world. The whole point of scaling your business is making sure that you are maximizing your time doing THAT thing, and letting other people handling things that do not require your unique gift.

If you are currently doing EVERYTHING in your business, and you are looking to do more of what you started your business for, please read further.....

I know the tendency here is to try and think this stuff through in your head. But, please don't. Take the time to write it down. It does not have to be in a fancy format like I am showing. It could be on a bar napkin for all I care. They key to writing it down is that it will let you think on it, re-visit it, and come up with additional thoughts at a later point in time. That is not something that is possible if you just try to think through it in your mind. Also, if you are going to have someone else help you eventually, it will need to be written down. Communicating the vision as well as the instructions will be helpful later.

There are 2 key steps that I think you should go through here. 1. Processes. 2. Procedures.

Whether you have thought it out or not, formally mapped it out, or just developed a workflow over time, your work is following a process. The first step to this is to create a "Process Map."

Depending on your business, you could have a single process, or you could have a dozen. In order to explain the concept, I have made a very simple process map for a photographer shooting a photo session. It is just an example, but it is supposed to represent ALL the steps that take place from initial customer contact to getting paid.

When you actually take the time to do this, you might realize that you are doing more than you thought. In this example, I am sure the photographer started the business because they loved taking pictures. As you can see, that is only one step on the process, and there are a lot of other things going on.

The next step is to color code your process based on 4 things:

- Things I love to do

- Things only I can do

- Things I hate to do

- Things other people could do

Again, this doesn't have to be a fancy chart. It can be a pen drawing with highlighters, or re-doing your sketch with crayons. The point is to determine where you can get some help. Here is the flow chart again with example color coding put in place.

This step could really take some soul searching. It really determines what you want your business to do, and what part you want to play in it. Let me give you a quick example that will hopefully explain this.

I used to make custom knives for years, and I made good money at it. I had to face all the hard decisions that I have already discussed. My "wait list" was over 3 years long, I could only work so much in a day and I had to make some hard decisions about what I wanted to do with the company.

The thing I loved to do was create my vision from scratch and make it happen with my own two hands. That is great that I figured it out. But, it also meant that I can only make so many knives per period of time, and sell it for a certain amount of money. I reached my limit of scalability.

Another option I could have taken was I could have just designed the knives. I could have had cut blanks delivered to my shop, and have shaped handles delivered as well. I could have paid others to assemble and finish the knives. I could have paid others to process orders, and do the shipping, and I could have focused on design. This option was what I called running a knife company. The option I chose was to create my knives all by myself with a true hand made process.

My whole point here is that it is important to get really clear at this step on what you want to do, and what you want your part in the business to be. Money is nice, but if you solely make a money decision, you could likely finding yourself running a business that you never really wanted.

Back on point. You have decided what it is that only you can bring to the world, and what you love to do. Let's maximize your time doing that, and get some help for all the other stuff. This may make sense, or sound scary. But, it is really a good business decision to pay someone to do work that you can do? The easiest way to see how this works is to start assigning time to the tasks you identified in your process map.

Here is the same example with time estimates assigned to each of the steps.

In another lifetime, this was actually one of my workflows and my business. The first step here is to figure out how much you want to make per hour for the product or service that you are providing. This might be a little dated, but my goal was always $300 per hour.

That rate can depend on a lot of things, and is beyond the scope of this post. It needs to include a lot of things such as overhead and equipment cost, etc. If I am taking photos with an $8000 camera and a $3000 computer it will be a different pricing model than if you are using an excavator worth $100,000. I can help come up with these numbers, but lets pretend for now that you know your target goal per hour of your time.

If you are running the whole business yourself, you simply need to add up the time for all the process steps and multiply it by your desired hourly rate. That should tell you how much you need to charge for that particular service. In this example, it turns out to be about $1245 in total. I can tell you from experience that charging that much for a 1.5 hour photo session was completely realistic based on the final order from the session.

In this example, 4.15 hours was the total to complete the entire process. However, only 1.8 hours requires the skills and ability of the owner of the company. Those are the things that I felt only I could do, or that I really wanted to do. The other things can be handled by someone else.

It can be scary to pay someone else to do work for you. Spending money seems like a big risk risk. However, when you look at this way, I could pay someone else else to perform the remaining 2.35 hours of work for me. In the grand scheme of things, it would cost me about $60, but it would free up 2.35 hours of my time. Since my part in the whole process only took 1.8 hours, I could literally do my part of the process twice, plus some. What does that mean? More than double the money in the end, and more time doing what I started the company for in the first place. Win-win.

Having trouble getting your brain around making a process map? Sound like a good idea, but you don't want to do it? Let me do it for you. It is one of the Small Business Solutions that I offer to do for people. It is what I am good at, and I am suggesting that you do what you are good at, and pay others to do the same. So, if that fits for you, please contact me and see if I can help.

Handing off work to others is the next big step in the process. How do you do that? This part came seem really scary too. Especially if you like to be in control of everything. After all, you have been running the business by yourself, and doing every step yourself all along the way. Can someone else really do those other steps as well as you can? Absolutely they can. You just need another step.

At the beginning of this article I mentioned two things. 1. Processes. 2. Procedures. We worked through the process, and now it is time to work through procedure.

Everything in the diagram above that is in orange is something that I have identified that "Others could do." The "Process" step is how you can make sure they do it to your standards and your liking. It does take a little bit of up front work, but it is not that complicated. It requires documenting the process for what you do in these steps.

For this example, let's take the "Edit Photos" block and create a procedure for it. Theoretically, this could be done for every step of the process, and that is the way that a lot of large organizations work. This step can be a written list of steps, a screen recording of you working, a fancy presentation, or whatever method that you think will work best for the type of work. An hour investment here in documenting your process will pay huge dividends in the future, and make sure that YOU are not the only person that can do this work and get your results. It will end up freeing you to do the things that only you can do.

For the "Edit Photos" example, it could be a simple list, such as:

- Burn highlights in the eyes.

- Dodge dark spots in the eyes.

- Use clone tool on any face blemishes.

- Create a selection mask around the face with feathering of 50px.

- Copy and past selection as new layer.

- Apply gaussian blur with an amount of 32.

- Erase selection over the eyes.

- Reduce layer opacity to 22%.

- Saved layered photo in specified location.

- Flatten image.

- Change aspect ratio to 4:5

- Save new image in "proofs" folder.

Done. That process is documented and repeatable if done in enough detail. You may find that this is better done in a screen recording. But, the idea is that someone else can do this step for you. As you work with someone and find the flaws in your procedure, you can always improve it. The big step is getting someone else to do it for you.

If creating these types of procedures is not your thing, but you know it is necessary, again, this is what I am here for. If you think a video and screen capture would be best, but don't want to learn the new programs and tech to do it, that is the purpose of my business. If you want to reach out to me for help in this process, please contact me or setup a time to consult on your project.