When we get into business for ourselves, the ceiling for earning potential breaks off.
Some of us entrepreneurs would be happy with additional $2,000 a month to make life easier and some of us would be happy with an additional $2M a month.
The idea, the implementation, and the long hours come first. Then we talk about scalability.
I’ve seen businesses scale right out of their own league, which leads to crappy service and lost customers. Sure, you can keep filling the bucket back up with new customers, but overtime this leads to a failing business.
The key is to balance your growth with infrastructure.
The chicken before the egg idea.
In the field of dreams they say “If you build it. They will come” and that motto will give you the ability to keep up with orders, but an overhead that keeps cash flow down or out.
If you spend a ton of money advertising, with no way to keep up with generated demand, then you’ll lose all of those customers.
Personally, I believe that if you have enough cash flow, then you can build infrastructure quickly by being a nimble ship instead of a large Titanic.
How do you balance business growth then?
By ensuring that you have 2x infrastructure at all times while still being profitable.
“But if you have 2 times the amount of payroll, how would you pay for the bills?” you may ask.
By ensuring that you are profitable at 1/2 the workload.
It hurts to hit the ceiling that you thought was gone. New customers rolling in, but disappointment resounds around the business as angry customers want their money back. It also hurts to take out loans to pay payroll.
I’ve seen and lived this balancing act in person for many years. My family business tripled in size over 6 years, but my father stayed on top of bottle-necks and envisioned what 2x would look like. His insights gave me the knowledge to find problems, then create solutions.
To be successful, us entrepreneurs need to harness our problem-solving brains. Use our future sight. It’s stressful at times, but it’s worth it.
