Every business grows through four phases:
Systemization – optimization – growth – and scale.
Systemization means getting every process in your business out of your head.
Optimization means repeating the processes that work best, over and over. It also means pursuing virtuosity in those processes – doing them well, without wasted effort or excessive “tweaking”. Optimization often means avoiding novelty in favor of repeating what works, even when it gets boring. This is also where delegation occurs and metrics are tracked to make sure staff can deliver at the owner’s level.
Growth means focusing on activities that grow the business instead of delivering the service yourself. This usually means focusing more on sales and marketing instead of coaching the clients or baking the muffins.
Scale means replicating your business over and over. This usually means a second location, but it could also mean placing your model over another business or simply adding a management layer to your current business to scale it up. Growth phase is incremental (one new client or one unit at a time); scale phase is exponential (50 new clients at a time or a new distribution channel).
My friend Sharran Srivatsaa introduced this simple pathway in his podcast. You can listen here:
This week, I’ve been writing about The Novice’s Curse. Many entrepreneurs are tripped up because they don’t follow this process of systemize-optimize-grow-scale.
Like me, they try to attract new clients before their business is ready to serve them well. So they run Instagram ads before they have systems in place for delivery (growth before systemization). Or they try to open a second location before their staff can run a sales consultation effectively (scale before optimization).
My first business simply didn’t grow until I mastered the fundamentals of systemization. As hard as I worked, as long as I worked, and as much as I tried to grow, I was always taking one step forward and two steps backward.
For example, I’d work hard to get a new client in the door. But they’d show up when I wasn’t available. No other coach knew how to sell them on the gym, so the client would leave. My ‘growth’ initiative would fail because my system (sales) wasn’t optimized (my staff didn’t know how to do it.)
In my mentorship practice, I created a logjam when, during an early period of fast growth, I failed to systemize our onboarding process. I once found myself packing ‘welcome boxes’, driving them to a shipping outlet, loading them into two shopping carts, wrestling with doors, and standing in line for an hour to get them out–because I hadn’t recorded the process for my administrator. Meanwhile, new clients were waiting for their first call (and others were waiting to sign up and pay.)
Our business doesn’t rise to the level of our marketing; it falls to the level of our preparedness. Businesses without clear, written systems will always be on a marketing treadmill of gain a client/lose a client. Their owners will always be burned out and angry at their staff.
Entrepreneurs that don’t track metrics will never be able to delegate work to their staff; never know what marketing is actually working; and always be in a rut of “trying stuff” instead of identifying what works and repeating it over and over.
Entrepreneurs who can’t afford to invest in marketing can’t grow their business, and if they aren’t clear on their ideal clients and value proposition, their marketing won’t work.
Finally, entrepreneurs who can’t replace themselves in management roles can’t scale their business because they’ll spend all of their time watching their people.
The four phases of business are systemize-optimize-grow-scale. Every business has to pass through each, in order. Businesses don’t grow to the level of their marketing; they fall to the level of their systems.