EP # 176 - 3 Things Every Small Business Owner Should Fix to Scale Their Business

Scaling your business doesn’t necessarily mean doing more—it means doing better. 

In this episode, we uncover the three critical areas you need to address to grow sustainably and strategically. Whether you’re preparing to scale or already feeling the pressure of growth, this episode offers actionable strategies to guide your journey.

Here’s what we dive into:

1️⃣ Customer Journey

• Marketing & Sales: Build systems that consistently attract and convert clients, from automation to team training. Avoid the pitfalls of relying solely on word-of-mouth or ad hoc strategies.
  
  
• Delivery: Ensure you’re prepared to deliver excellent service at scale without compromising quality. Learn how to prepare your team, streamline processes, and maintain client trust.
  
  
• Retention: Keep clients returning and referring others. For more on this, check out Episode 174 focused entirely on retention strategies.

2️⃣ Finances

• Professional Bookkeeping: Why hiring a trained bookkeeper or fractional CFO is vital for managing cash flow, tracking sales, and reducing mental stress.
  
  
• Linking Operations to Numbers: Understand how to connect operational data to financial outcomes to drive smarter decisions and improve performance.
  
  
• Timing & Frequency: Determine the right bookkeeping cadence (monthly or quarterly) based on your business complexity to catch and act on opportunities early.

3️⃣ People & Leadership

• Leadership Skills: Recognize that leadership isn’t innate—it’s a skill set. Learn to balance control with flexibility to empower your team and allow your business to thrive.
  
  
• Avoid Extremes: Over-controlling stifles growth, while "laissez-faire" management leads to mistakes and frustration. Find the middle ground by providing clear guidance, support, and autonomy.
  
  
• Building High-Performing Teams: Create a culture where employees contribute to growth, become assets rather than costs, and allow you to focus on being a visionary CEO. For more, listen to Episode 173 on scaling with high-performing teams.

🎙️ Throughout this episode, you’ll hear examples from real businesses and practical advice to tackle common challenges. Whether it's developing a marketing strategy, managing your finances, or leading a team, these steps will set you up for success in 2025 and beyond.

🔗 Ready to scale your business the right way? Book a sales call with me here - https://stairwaytoleadership.com/, and let’s talk about your growth journey.

Transcript

Maggie Perotin: 1:00

Hello everybody. Welcome to Diamond Effect podcast, episode 176. And as this year, 2024 comes to a close and the new year is coming, I wanna keep talking about you growing and scaling your business because I'm sure as a passionate business owner, you are thinking about how can I make 2025 better? Whether 2024 was a great year for you and you want to make it 2025 even greater or whether it was a tough year and for many businesses it has been and all you're wishing for is let's get 2024 behind us and I want a new start, a new hope for 2025. I want to help you scale and grow. So that's why today I want to keep talking about that and talk about three things you need to fix or set up properly, in order for your business to scale and grow. This episode is based on my work with my clients. I will give you some examples, some, case studies here, and think about it this way. If you scale your business to Two times, five times, six times in the short period of time. If you have any issues right now that you're not gonna address either as much as possible, as soon as possible, or as you go, those issues will two x and five x with your growth, not only in the. pain that they cause and loss of, resources like money and time and effort, but also in their complexity. So the sooner you can fix things, the sooner you can set things up properly, the easier it will be. And I'm seeing that because I coach all kinds of clients, right? When I start with a brand new entrepreneur and startup, their scaling is easier, it's smoother, it doesn't mean they don't have any issues, but they deal with it, it's not such a big deal to deal with them, they deal with them faster, it doesn't cause as much pain and as much time. Whereas if I work with more mature businesses and I come in where the businesses grew without certain fundamentals, then fixing things, untangling the issues takes much longer, takes more effort, more resources, more time on the CEO side, right? No matter where you are, it's okay. You can always get better and prepare yourself for scaling. All I'm saying that if you're listening to this and you're early, the earlier you start, the better. Here are the three areas that you need to think about fixing, improving, and setting up. One is your customer journey. And that goes from marketing and sales delivery and retention. And we'll talk about it in details. Two is your finances, your number. We'll talk about that too. And three. Your people, your team members, and we'll talk about that too. Let's get started. Customer journey. Point A in this is marketing and sales. So what I often see, which is totally normal, I've done it myself. It's like when you're starting your business, you're trying new things. You're trying new marketing strategies, kind of stuff. Sales, what type of process works for you, and you do it ad hoc. Certain things work, so you stick with them, but then you get busy with clients, and you drop the things that work, or you're doing them, but not consistently, and then you start relying mostly on clients coming back or referring others, so that word of mouth marketing. And you never get to set up a true system and processes in marketing. So having a bunch of things that work together to bring you new clients but also sell to the existing clients so they come back and set up in the way when they're like a cogwheel or working together where things are happening consistently without even you having to do it all. It could be partially your team. Partially automation and so on. So if you don't do that, it's very hard to scale. If you don't have a marketing and sales strategy that then it's translated into processes and systems, and you're just relying on word of mouth or the fact that your business has been around for a while and people know you, it's hard to scale. Okay, so I will give you a couple of examples. Now, every business is different and depending on the industry you're in and even maturity level you're at in terms of business, those things could look differently. So for example, one of my clients in the health and wellness industry, their marketing strategy and system that we created focused mostly on education, nurturing connections, parts of the systems were Connections with strategic referral partners and building certain personal connections, personal touchpoints, along with automated educational touchpoints like newsletters and so on. The second part of it is current patients. And ensuring that as a clinic and as a medical professional, my client was staying on top of their mind, even in between appointments or even when their, let's say, service was finished and they didn't need him for a while and so on. So how new patients could find the clinic. It was a combination of online marketing and digital marketing, organic marketing and Google, reviews, testimonials, website, connections with strategic partners. What was more typical marketing. So what was displayed in the clinic and information education that was happening even when patients were waiting and all of that, we didn't implement. All at once, because it's just too much to do, but one by one, step by step, and then streamlined it into a system. Now, another client of mine who is more of a typical business rather than a medical practice, their clients are professionals, high end, it's a business to business, truly, operation rather than business to individuals. And then there, there was a real sales process that included quoting and so on. So in order to create a reliable marketing and sales system, that looked a little bit different. There's not much referral partners in their industry. This is a direct to client more of a marketing. So utilizing the network clients that the business had because it's an established business and staying connected to those clients on a regular basis through individual touch points, digital marketing, organic marketing, social media presence, so on. Having a streamlined quote process where sales people can get more in depth into the client needs understanding what they want, customize the quotes; which then increases the sales closures. And also reach out to new potential clients. So again, once you implement that and establish processes and training for the team to make sure that happens like clock work. Now you have a system when you can amplify that, whether by adding new team members, whether by amplifying through some paid marketing, if you're doing organic marketing and so on. That's how you can scale when you know exactly which cogwheel brings what type of results, how is it working, and then figuring out how to scale it. Do how my clients do it because it might seem complex. It's really through having a top CEO winning strategy, where I always do on our first approach. I look at their business and who they are, what type of structure of their business they have. When they already have in place that can be just improved and amplified, what new things need to be added or should be added. For the scaling portion, and then we work together step by step to implement it systemizes and automate what we can read. So that's how they do it step by step in a strategic way. And through the top CEO winning strategy, I help them. If you are interested, reach out to me. Let's have a conversation and see how we can do it in your business. Okay. The second part of customer journey is delivery. So of course, when you're scaling and now you have to two times more clients, three times more clients, five times more clients. You need to also ensure that all those new clients get the high quality of service and offer delivery that the previous clients received. That you actually deliver on what you promise in marketing and sales and ideally over deliver, right? So at minimum, you want to deliver what you promise. Ideally over delivered. And before I talk about all their delivery, I will share a story of mine, not that long ago that I worked with a service provider who actually under delivered. They over promised during our sales conversation. And even though we had conversation about it, I had a lot of questions because I had a feeling they were over promising, we hashed through the details and so on, and we agreed on certain terms, and then Very quickly, within a month of us working together, I started seeing the signs of their team being overstretched. Probably they scaled. Clients, a lot of like mine, were signed. Team wasn't prepared. They were overstretched. They were dropping the balls everywhere. They were not doing even the minimum. to which the service provider committed, not to mention other things that they promised that never happened. And then finally, they actually completely ghosted me. That was really, bad experience on my end, but that's what it is. Not being ready for scaling and the owner not preparing for it properly. You do not want to do that because even if you have the best intentions and you have the greatest teams, if you over stretch yourself and straight scaling just through marketing and sales, but don't prepare for service delivery. You will lose clients, you will lose the trust that your brand earns, and ultimately it will not serve you long term. How do you prepare for the delivery? You need to think. The first questions you want to ask yourself is this. If I doubled or tripled my clientele right now with the current stock, processes with the current resources, with the current people I have, can I deliver the same level of service that I'm delivering now? If the answer is no, you need to start thinking, okay, what do I need to implement? It could be start looking for new people or think about what type of hires, what type of people do I need to hire? It could be, maybe you need a truck or maybe you need a larger location or a warehouse or whatever that is. Couple of clients of mine, that's what we've been working on in the past few months. Not only hiring new people, but looking for vehicles, which is apparently not that easy to do lately with the short, supplies of certain types of vehicles. Looking for larger location, looking for new suppliers, or maybe not even new suppliers, but complementing with the current suppliers with new suppliers to create more resiliency in the business, more backup should one of your main suppliers, something happen, right? You need that as your business grows, even thinking about the client onboarding experience and streamlining their payments or the communication of what they need to do to successfully go through their journey with you and how Maybe right now it's all ad hoc, it's manual and somebody needs to remember to do it and thinking about how you can streamline so no client is left behind. No client is left without knowing what to do, what are the next steps, especially if your service delivery happens in sort of projects, chunks, and it's not one thing. Done and that's it right now. The last part of customer journey is retention. So now after my client took their first offer with me, or I delivered to them the service one, but most likely they could come back and I want them to come back, or I want them to refer other people in their network. How do I retain them? That's actually, I covered that in detail in here in Diamond Effect podcast episode 174. So just a couple of episodes ago on how to increase your retention and keep your best clients coming back to your business. So I'm not gonna spend any time covering that. I'll just refer you to that episode and you can listen to a more in depth content about this. Okay, so the second area you need to fix as soon as possible to scale, but also to make your life easier. Right now, wherever you are in your business is your finances, your financials, and if you don't know how to bookkeep and if you don't have any like financial education, it doesn't have to be a big degree, but anything. To back up how you keep your books, I highly recommend you hire a trained bookkeeper. And you probably have a lot in your network, or you can ask fellow entrepreneurs who are happy with their bookkeepers, but a professional maintaining your finances is key. I understand bookkeeping. But I don't even do it for my business. First of all, I don't like it. Second of all, I know that understanding is a one thing, but doing it properly, it's a whole different story. And I'd rather have a professional do it. So then I can rely on the reporting. I can rely on the numbers, not only for my taxes, Also for managing my business and making better decisions. And how do I know not everybody has it because again, I work with the clients who sometimes come in To me and they have seven multiple six figures businesses And they're all stressed out. They're all anxious and worried because they don't know if they're making enough money to sustain the business. And they're, our negative brain always goes to the worst case scenarios, but because they don't see their numbers on a regular basis, and if they don't have any other system when they're tracking sales and when they're seeing how the income progresses, that's just the recipe. For mental stress. That's what it is. Now, very often a bookkeeper or fractional CFO or a financial professional will also not only keep your books and maintain your records properly, but they will also run reports for you. And they'll teach you what to look at and how to understand your business from the numbers perspective. If not, I teach my clients how to do it. I have some financial educations and an executive MBA where we had like managerial finance. So managerial finance is what I teach my clients is how as a CEO without being a bookkeeper or a CPA or any financial professional, can I understand my numbers and also tie them to my operations and also tie them to what they mean and how can I influence them in my study. In terms of having your numbers updated, it's all up to you. If your business is smaller and you don't have a lot of transactions, you have more or less transactions by higher value and the business is not complicated. If you have a different way to track your sales and what's been sold, where's the cash flow coming and so on, your books could be updated quarterly. But I would say that's like the least in terms of the frequency. Don't go once a year-quarterly. As long as you have a different way of tracking. So you can always quickly look, okay, this is what we have in sales. This is what we're still waiting to get paid. Some businesses have systems like that where sales system tracks that even medical practices have that. So if their books is updated quarterly, that's fine. However. If your business is larger and there is a lot of transactions and the business is complex, having books updated monthly is key because that means your business is moving faster, right? More transactions, you're moving faster. If you don't know what's going on in your business for three months, you might lose a lot of opportunities, not only to make more money, but to fix things when they're still small and barely started, you can see certain issues before they become really big challenges that's hard to overcome. So having Your books clean and understanding your finances. Not only will allow you to see that are lower in cash flows, and you can then make decisions what to do about it. Not only how to prepare and maybe budget and save, but also from the sales and business growth perspective, what can you do, especially in the less busy months, to bring that income higher. In the less busy months, that means you still have capacity within the current operations of the business with the same amount of team members, with the same amount of resources that you have, you can still raise your income and grow your business without having to hire more, without having to expand other things, if let's say you only grew in your high peak periods. Because in your high peak periods, your business might be already at the maximum operations the way it is, right? With the amount of people that you have, with the systems that you have, and so on. And that will require certain investments and expansion. But if you can grow in your lower peak periods and you're creative about it, then you can still grow without raising your costs dramatically, especially fixed costs. And then one quick example on how you tie operational data to your finances, right? So for example, if you know that you had 10 orders and those orders created X amount of income on average, then you can backtrack or the other way around. But let's say you can backtrack saying, okay, where did these 10 orders came from? Oh, they came from. 15 quotes that we send a month, right? So on average, if we send 15 quotes, we get 10 orders. Then you can look at why, for example, you didn't close the other five quotes. Were there any areas you could improve? But you can also know that from the 15 quotes, they came from. 30 inquiries, right? So if you know that on average, without improving anything, if I have 13 inquiries, they convert to 15 quotes, and that converts to 10 orders, and the average order is this, or those 10 orders on average is this. Now you have the operational data tied to financial data. And then you can look at, okay, what can we improve? And if we've improved everything and the gains are minimal, how can we grow that? But your low hanging fruit is always an improvement. Improvement of your conversion rates in this example. The third part you want to fix in your business, or you want to set up properly, especially when you're getting ready to scale, is your people leadership skills. I actually heard in a quick clip from a Dragon's Den or Shark Tank, something like that, of a new entrepreneur who was talking about a little bit their background, and they were saying that they were working for one of the huge corporations, and when when they became a manager, they told themselves, I'm not a good manager. Very often people are not good managers because if you've never had to lead people before, you just haven't acquired those skills. So that particular, entrepreneur quickly realized that, yes, those were skills and they started learning and then they became better manager, which of course helped them as an entrepreneur looking for investors and then building their team, often I have my clients come to me telling me the exact same thing and somehow as human beings we just expect from ourselves to just know naturally how to lead and manage people. We don't think of it as skill sets, but they are, and it doesn't come naturally for most of us. Those are acquired skills. I wouldn't have been the great leader that I was and a good people leader that I was without developing my skills, without training and mentorship and coaching and practice and focusing on being the best I could be really intentionally. So what kind of Let's start from the beginning. Quite often, when a business owner is just starting to hire, they think of themselves as falling into two camps. One of the two camps. Control freak. So people who don't want to lose control and they're scared that if they start hiring people and delegating, the people that they hire will not do as good of a job. They will not have the great connection with the clients. They will not deliver as great of a service as they're delivering depending on what the role is that they are deciding to hire. Another camp of people are more of a"laisser-faire". They hire the people and they just here you go. Here's all the tasks that I wanted to get rid of. But then they have other issues because they're more of a less fair without providing support to their employees. And both extremes create Issues. So if you're more of a control freak, what it will create is that You will have no CEO time. You will always be in the weeds and you will always be the one who is stagnating your business who's causing your business not being able to grow because you have to be involved in everything. And there's only so much you can do you will also be demotivating your best people who are smart and want to contribute. If they're hoovered on and always, feel like they can't do anything on their own because you're going to go and correct it or do it for them, then they will not want to stay in that environment because there's no opportunity for growth and learning and showcasing their talents, they will leave. Now what it will also do, It breeds helplessness in maybe people who like to be told what to do and who like to be always, secure in a way that if I mess up, my boss will fix it, not a problem. But it breeds helplessness and people will stop taking initiative. They actually don't develop their skills. I would say they actually regress because they stop thinking for themselves because what's the point, right? Now, if you're in the more or less a fair camp, which is dumping everything on your people without supporting them, what will happen, especially in the beginning, you'll have a lot of mistakes and a lot of issues because people have no direction. So yes, they'll be doing the best they can, but they might not know certain key things to succeed. So you'll have a lot of rework and a lot of fixing. Now you will still be demotivating. your team members because nobody likes to fail and if every time somebody does something and it leads to challenges they will feel like they're not doing good enough job or they can't get it or that they're not supported and they will leave and then you might go into this vicious cycle of reinforcing the belief that there's no good people out there because whomever you hire they're never succeeding. So the secret To create people leadership is somewhere in the middle. Where you give people support, especially in the beginning, and that's training, that's onboarding, that's coaching, but also processes and guidelines when they know what kind of outcomes are required, the critical parts that they need to know about your business that they would never know unless they worked for you. And also you let them shine on their own. You give them enough flexibility and independence when they can bring their brain, their experience, their innovation, their passion into the business and grow it with you while you're focusing on other CEO you need to focus. So when you have great people, they should be making you money. There, your business should be growing with the employees that you have. And if it's not, then there's a problem. You might not have the right people, you might have hired, not created the right positions and so on, right? Your people should be the investment in the business, helping you grow it, not the cost. They should help you scale. Now, if you're telling yourself right now, but Maggie. I don't know how to be a manager. I don't think I'll ever like it and so on. I want to challenge you. Very often we don't like things or we don't like to do things if we're not good at them. If we're beginners, if we've never tried and we're just learning, right? It's not fun. to go skiing or snowboarding or whatever other sport when you suck because you're just trying. It gets fun when you get better, when you don't fall as often, when you score more often, right? That's when the sport gets fun. So it's the same. I've seen it over and over with my clients. When at first they were scared, they didn't want to grow their teams, but at the same time, they wanted to scale their business and expand their missions. And then when I help them develop leadership skills. As they became better and better leaders, they started loving to be the CEO. They started loving to be the leaders because they realized that once they know how to have a high performing team and how they can expand their mission and help more people through their team members by guiding them and teaching them and building a legacy as well. That becomes so fulfilling. So I'm also referring you to another podcast episode that I did recently, episode 173, on how to scale before 2025, where in that episode, I actually specifically focus on people leadership, on building high performing teams, communicating properly with team members and so on. Because as I said, I'm going to talk a lot about growing your business in the new year and going forward just because it's the best time of the year to talk about it. Thank you for listening and if you want to scale your business in a way that creates an asset That's sellable down the line. You might not be thinking about it right now, but at some point you will. And all your hard work will be best used if you have an asset that you can sell down the line. Because also what happens, When you think about your business this way, you create it in a way that allows you to have work life balance and actually enjoy your life. And why not? When you get to decide because you're the owner, you're the CEO, I can help you do that through my top CEO formula. And all you need to do is book a sales call with me through the show notes or the link in the comments. And let's talk about it. Other than that, have a fantastic week. Bye.