Momentum Podcast: 482

Strategic Growth Isn't Always Revenue

by Alex Charfen

Introduction

As a business coach, I tell people you're either growing your business or it's going away. I mean that. If a business isn't growing, it can stagnate and fall apart. However, I don't want anyone to ever misinterpret that to mean that you should always push top line financial growth.

In fact, there are other ways to grow your business that are just as important and sometimes you should purposely stop growing your top line.

Episode Description

Growth isn’t always financial. Sometimes, you have to strategically grow some things in order to grow others. You have to take a step back in order to continue growing at a rate you want.

I talk to entrepreneurs all the time about growing their businesses. That’s what keeps us in momentum – growing a business and moving things forward. The problem occurs when you want to grow all the time. A single flat line month will drive entrepreneurs crazy.

Experienced entrepreneurs understand that in business you should not always be growing top-line numbers. To deliver at the highest level, sometimes you need to make the strategic decision to grow the infrastructure of the business, not the sales of the business. Taking the focus off of the top-line and growing delivery and cause your business to grow in lightning speed.

Growth in infrastructure changes things and supports the people, processes, projects in your business. When you put the focus here, it will have a slingshot effect because they are the foundational pieces of growth in your business.

To grow strategically:

Understand that most businesses go through these periods routinely.
Set an outcome and a timeframe to win.
Realize that deliberate building periods act like a turbocharger for your business.


If you are ready to start growing like crazy and build infrastructure in your business, reach out to us at billionairecode.com.

Full Audio Transcript

Alex: As a business coach, I tell people you're either growing your business or it's going away. I mean that. If a business isn't growing, it can stagnate and fall apart. However, I don't want anyone to ever misinterpret that to mean that you should always push top line financial growth. In fact, there are other ways to grow your business that are just as important and sometimes you should purposely stop growing your top line.

I'm Alex Charfen, and this is the Momentum Podcast, made for empire builders, game changers, trailblazers, shot takers, record breakers, world makers and creators of all kinds, those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny. We define it.

We don't understand defeat because you only lose if you stop, and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future. Instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world because entrepreneurs are the only source of consistent, positive human evolution, and we always will be.

For anyone who knows me, they're probably going to be shocked at the introduction to that podcast because I talk to entrepreneurs all the time about growing your business, about pushing your numbers, about making sure that you're helping the people around you grow within the business. That's what keeps us alive as entrepreneurs, and that's what keeps us in momentum, growing a business, making things happen and moving it forward.

However, here's a challenge that we run into often in our coaching programs, is that we attract the type of clients who want to grow all the time. What I mean by that is they want to see top line growth. They want to see profitability growth. They want to grow the entire business. They want their numbers to move in the right direction, and even a single month of flat line or non-growth numbers will drive them crazy. However, here's something that experienced entrepreneurs understand that often it takes experience to actually put into play. That is that in business, you should not always be trying to grow your top-line numbers or your revenue numbers. Sometimes you actually have to take a step back and build the business, grow your infrastructure in order to continue growing at the rate you want.

In other words, sometimes you have to strategically stop growing certain things and others in order to grow others. Let me give you some history on how this relates to Cadey. In fact, I'll give you a time where we did exactly this. If you listen to this podcast, you know we're coming out of one of these periods. In September, we stopped pushing our paid marketing. We stopped pushing any paid marketing of any kind because we wanted to grow our delivery systems. We wanted to make sure that we were building the system so that when we got a client, we kept a client and nothing happened.

Well, this isn't the first time Cadey and I had went through this. In fact, I remember a really dramatic example of this. If I go all the way back to 2010, Cadey and I started our certified distressed property expert business in 2008. For most of 2008, we ran it together. In 2009, we moved to Austin. Our two-person team went to quickly a four-person team, then a five-person team, then a 12-person team. By 2010, we had 20-something people, and we were growing the business like crazy, but here was the issue. We were selling a ton on a monthly basis, but we were continuously disappointing people. Our delivery systems weren't built out like they needed to be. Previously, we had been selling a few units a week, and now we were selling dozens of units a week, and some weeks, we were selling more than that. It was an absolutely overwhelming period of time, and our entire team kept wanting to grow and grow fast and do everything that we could to continue to move forward as a team.

I had to get our leadership team together and have a serious conversation about the fact that if we kept trying to push our top line and sell more without fixing things, we were going to end up damaging our reputation and possibly damaging the product that we were selling. We did one of the most difficult things I've ever done in a business. We actually came in, and we declared a construction period. In fact, me and some of the other team members went over and bought construction cones and construction tape and hard hats, and we brought them in, and we put them all over the office, and we got signs that said under construction. When our team came in, in the morning, we explained to them that we were going to go through a period of construction. We are going to go through a period where we had to grow the infrastructure of the business in order to grow the sales of the business.

We actually told everybody, "Hey, we want you to know something. Right now, our focus is on growing the infrastructure of the business, not on growing the sales of the business." We made it a theme. We actually shared it with everybody. We hung the stuff around the office. We talked about being under construction every morning. We've prioritized around creating the delivery systems and cleaning up all of the processes that we needed to deliver at the very highest level to the clients that we were working with. That under construction period was incredible.

In fact, here's what happens. In businesses where entrepreneurs make the strategic decision to grow through infrastructure and not numbers, oftentimes, that period of growing the infrastructure will act as a slingshot. That's absolutely what happened to us. In fact, let me share it with you. We started the business in 2008. In 2009, it grew like crazy. In 2010, we went through our under construction period early in the year. We had done 500,000, then seven million, then almost 10 million in revenue. The business absolutely exploded. That under construction period acted as this massive turbocharger, this slingshot. In fact, by taking the focus off of the top line and building our infrastructure and growing our delivery systems, the business was able to grow like crazy.

If you listen to the podcast, you know the next year, 2011, we were the 21st fastest growing company in the United States. I truly believe that because I had the experience to know we couldn't keep pushing top-line growth, we had to back off and actually create some stability and grow our infrastructure. I truly believe that's why we ended up on the Inc. 500 list.

Here's why this is important. Growth is not always financial, but entrepreneurs only look at financial numbers most of the time. It's the only number we care about. You should look at other things. You should look at your client satisfaction. You should look at how easily and how swiftly people are moving through your product. You should look at your client results. Sometimes growth is in the way of infrastructure. Sometimes growth is in the way of systems that deliver to your clients. Sometimes growth is not numbers. As entrepreneurs, we need to recognize that.

When we took the pressure off of sales in 2010, I wasn't happy about it. I wasn't excited about. It wasn't a period where I was like, "Woo-hoo, we're going to stop selling." It was a period where I knew based on past experience that if I didn't take the pressure off of sales, if I tried to chase sales and cleaning up our delivery systems, something was going to happen. I didn't stop us from selling. I just stopped proactive measures on selling so that we could build our systems, and it worked. Growth in infrastructure changes things.

Here's another reason why this is important. When you look at your infrastructure, here's what infrastructure in a business is. It's made up of three simple things. One, people. The human beings in your business that are making the business move forward. If you're in a fast-growth period and you've grown like crazy and your numbers are up and then things start getting challenged, oftentimes, it's because the people don't have the right training. The people don't really know their outcomes. Your team doesn't have the systems in place that they need so that each person knows clear outcomes for what they're driving towards, accountability of what they're responsible for and what the people around them are responsible for, and then clear scoreboards for whether they're moving forward and perspective on whether they're winning. People have to have those things in order to move forward in your business.

Infrastructure is made up of processes, the processes that you have documented. You should have your customer experience documented to the point where anyone in your team can deliver. That means when you look at lead generation, lead nurture, delivery, retention, resell and upsell, you should have those spelled out clearly. Those are the five core functions of the business. Listen to the podcast called Five Core Functions, and you'll understand them better, but you should have those processes that lead to those five things clearly documented.

The third part of infrastructure is what are the projects you're doing right now? What are the new initiatives your business is prioritizing and putting into place? When you look at those three things, people, processes and projects, that truly is what your business is made up of. When you put focus there, it will often help you grow just because those are the foundational parts of actually growing a business.

This is why this is important. If you're always pushing top line, oftentimes the focus comes off of building the infrastructure of the business. You should have the confidence to pull back, to create a plan, and to grow strategically. Strategic growth wins. Strategic growth means saying, right now we need to grow infrastructure. Strategic growth means saying, right now we need to get the right people on board. We shouldn't keep pushing. We're going to break something. Strategic growth means we don't have the right processes documented. As soon as we do, we're going to put the accelerator pedal down on marketing, but until then, we're going to grow there. See, that is strategic growth. It's not always top line or bottom line. Sometimes it's growing the processes that allow you to deliver the product that you have.

Here's what you need to know. Under construction, build periods, infrastructure building periods, periods where you're cleaning stuff up in the business not only are completely and totally normal, but most successful entrepreneurs and most successful businesses go through them routinely.

Second, set an outcome and a timeframe to win. Don't take the accelerator off of marketing and sales completely. Set a timeframe. In early 2010, we had a 90-day period where we were under construction. We continued to sell the business that came in. We let our partners continue to sell. We prepared for marketing, and then we built infrastructure like crazy. That 90-day infrastructure building period acted as the slingshot that got us on to the Inc. 500 list. I know we wouldn't have made it without that.

Third, deliberate build periods act as a turbocharger, as a slingshot, as an accelerator to your business because you know that old saying you've got to stop working in your business and stop working on it. Well, once you build a team ... Sorry. You've got to stop working in your business and start working on it. Once you have a team, you'll have to let them do the same thing. You have to stop letting ... having your team work in the business, pull back and let them work on the business so that they're getting the strategic work done, not just the tactical day-to-day delivery. By having that deliberate build period, you actually give your team the daylight they need to be able to fix things, put foundation in place, and actually deliver consistently and grow your business.

This is the epiphany that I had in growth, and this is what I want you to think about, is that we all as entrepreneurs always want to grow top line. If we're willing to mature our perspective and see that there's growth in a business in other ways other than just top line, there's growth in delivery systems. There's growth in infrastructure. There's growth in success with the clients. There's growth in the feedback you get from clients. There's growth in the results your clients get. All of those things are growth, other than top line and other than bottom line. When we start recognizing that there's growth other than revenue, we see an entirely new way to grow our business and define leverage and to move forward faster.

I would never suggest that you stop growing for a long period of time because you don't want to forget how as an organization, but if you're growing and you get to a place where delivery isn't right, where it feels challenging, where it feels like everyone is climbing uphill, where it feels like the systems just aren't there to be consistent, go through a strategic growth process for your infrastructure. Build your business, and take the pressure off top-line sales and just watch. If you're willing to have this perspective, if you're willing to approach it this way, if you're willing to lower the pressure and noise for your team so that they can build the infrastructure you need, it's very likely it will act as a massive slingshot for your success.

If you're ready to start growing like crazy and build an infrastructure in your business today, and if you want help with people, processes and projects, reach out to us. Let us show you how to build an infrastructure as fast as the opportunity you've created will allow. If you're ready to have the infrastructure around you that lets you take advantage of the opportunity you've created, go to billionairecode.com. Fill out some questions for my team, and you'll have an opportunity to book a call with us. We'd love to talk to you. We're helping entrepreneurs around the world grow the infrastructure of their team, get the right people on board, put the right systems in place and grow faster than they ever thought possible, billionairecode.com.

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With gratitude,

Alex

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