How to Scale Your Business 10x
In this post, I’m going to explore some concepts of time allocation as presented by Alex Hormozi on how to drag your time horizon into the present and scale your business way faster than anyone you want to beat.
‘It’s not as important how hard you row, but what boat you are in.”
Taking control of time in a way that allows you to scale your business rapidly is not about doing lots of activity, it’s about making the right strategic decisions..and making fewer mistakes.
It’s the difference between being micro fast but macro slow, or micro slow but macro fast.
Most entrepreneurs operate micro fast, and macro slow. They go really fast, then change direction, they go really fast again, then change direction, never generating the required momentum to achieve exponential results.
Exponential success comes from not having to take detours. If you consistently move forward over a long enough period of time you will go really far.
“Ninety percent of success can be boiled down to consistently doing the obvious thing for an uncommonly long period of time without convincing yourself that you are smarter than you are. – Shane Parrish
“Ninety percent of success can be boiled down to consistently doing the obvious thing for an uncommonly long period of time without convincing yourself that you are smarter than you are.” – Shane Parrish
“I only believe 1% of the decisions matter. The rest of them are irrelevant. the difficulty is understanding which 1% of the 99% are the ones that matter.” – Naval Ravikant
Successful Frameworks that Shape the 1% of Decisions that Matter
Money = Denomination of Time
Money is simply a store of time. Consider that:
- Every transaction we make is for some percentage of our lives
- Our wealth is a measure of how little of our lives we must trade for the things we desire
- Money is an IOU from society for future goods and services, which is translated as, other people’s time.
Consider two people who wish to buy a Lamborghini. The person with lots of money needs to trade a much smaller percentage of their life to make the purchase. The person with no money needs to trade a very large amount of time to make the same purchase.
Money is simply a store of time.
Therefore, it is only through the leverage of money (aka making more of it) can you truly multiply the time that is available to you. It’s the strategic decisions (ie, the macro) that will ensure you are in the correct boat to maximise financial leverage and therefore time.
The rich know this.
They tell their kids to pursue high leverage opportunities such as:
- Real Estate
- Funds
- Acquisitions
- Business Ownership
High leverage opportunities build wealth that requires less time input from the individual.
Poor parents tell their kids to pursue low leverage opportunities such as:
- Get a good job
- Build a small business
- Learn a trade
These opportunities are low leverage; they require more time and effort from the individual, when in reality both low leverage and high leverage opportunities require the same time, but not necessarily the same skill.
“Big goals and small goals are both hard to achieve, so you might as well make them bog, so it’s worth pursuing through the inevitable hard times.” – Stephen A Schwarzman
To understand the skills required to build high leverage opportunities, you need to understand four key areas of scale within your business. They are:
- Scale the Entrepreneur
- Scale the Market
- Scale the Deliverable
- Scale the Business
Entrepreneur x market x deliverable x business acumen = FORTUNE
Framework #1: Scale the Entrepreneur
The first point of failure when it comes to building success sits with the individual or the entrepreneur. You simply aren’t as good as you think you are. The deficiency stems from one, many or all of the following
- Lack of skill (eg cold calling)
- Lack of character trait
- Lack of belief
Imagine you have a ladder, and one side is your character traits, one side is your beliefs, and the rugs are your skills. See diagram below.
Now if any of these areas are deficient, you’ll be limited to the lowest rung on the ladder
- If you have the character traits but lack the belief, you’ll be limited
- If you have the belief yet lack the character traits (ie determination, perseverance, focus), you’ll be limited
- If you have both strong traits and beliefs yet lack the skills you’ll be limited
If you lack in any of the above areas, you’ll end up with a ladder like the one below.
Examples
The One Thing
One of the key areas where many entrepreneurs fall short is their lack of focus. They have their hands in many pies. hoping that one of them will work out.
Lesson: Niche Slapping fallacy. The belief that one of them will work out if you pursue all
Lacked: Focus
Category: Character trait
This is false, all of them could work out, but none of them will work out if you are pursuing them all.
If you have your hand in many things, stop, pick something and commit to it, The people who are beating you just have one thing going on. You lack the character trait of focus.
Attracting Talent
Complaints often head in the business world include comments like, no good salespeople exist, no one can sell as I can, my sales team is so inconsistent etc. This is not their problem, this is your problem.
Lesson: Inability to attract the talent for the job
Lacked: The skill of recruiting, hiring, interviewing, training, and managing a high performing sales team.
Category: Skills
The question is not whether you can manage a sales team (binary), but instead how good at managing them are you (continuum).
The best way to learn is to phrase your bottleneck/complaint into a solvable question
Complaint: My sales team is inconsistent
Solvable question: How can I learn to create consistency in our sales team?
Building Traits, Beliefs and Skill
Once you have identified the areas you lack, you can then improve them through the tried and true method of repetition and feedback.
- Do the boring work
- Outwork yourself doubt
- Your work works on you more than you work on it, no work is in vain,
The term ‘passive income’ is boring and overused. Let’s make active income cool again. You build your character through the work that you do, so consider doing the work, not as a task in itself but as a means of building that character trait.
Conviction comes from doing something so many times you are bored of it. There’s no shortcut to success. Skills, traits and beliefs all compound through the repetition of work; that is what yields crazy outsized returns..seemly overnight.
What is your skill stack, what are your deficiencies, and are you working on them? If not get to it.
Framework #2: Scale the Market
Once you have established that YOU are the first point of failure to your own success, it is important to factor in which boat you are in, or what market you are working in.
Why do more incompetent people make more money than you? They picked better markets.
How to Pick Better Markets
Easy answer: Select the avatar where you can provide the most value and build a business around that.
Hard answer: Pick a single avatar you that you can productise your service and provide high value with low operational drag. Choose only one, and get better and better at it over time.
Four Attributes when Looking for a Market to Pursue
- Pain; They must not want, but desperately need what I have to sell them
- Purchasing Power; They must be able to afford what I have to sell them
- Easy to Target; Your target must be accessible and ideally large
- Growing; You want the business you are in to be growing, not a ‘sunset’ industry
As mentioned earlier, it’s far more important what boat you are in, rather than how hard you row. Ride the tailwind of great markets and scale.
Framework #3 Scale the Deliverables
Once you have the market, you need to scale the deliverables. How?
Broaden your Scope
- Go upmarket; ie chains/multi-location owners
- Go down market; ie hairstylists
- Adjacent market; ie lashes and nails
- Go broader; ie beauty
- Go deeper; in the existing market; ie buy competitors, new platforms, outbound, increase ad budget etc
Three C’s of Leverage
Once you have broadened your scope, you can leverage the four C’s, ideally in the permissionless form:
- Collaboration/Labour; permission required; ie employees
- Capital; permission required; ie Buffet Munger etc. using other people’s money to make money
- Code; permissionless; ie iPhone apps (zero cost of replication)
- Content/Media; permissionless; ie Joe Rogan or Mr Beast (zero cost of replication)
Permissionless leverage is where the new money is being created.
Framework #4: Scale the Business
Once you have managed to scale the deliverables, you can then work on scaling the business. A good book to read is Ready, Fire, Aim. The below diagram provides a good roadmap for scaling.
Which areas are you currently deficient in. Are there any areas that you could work on to bring your time horizon (closer to) the present?
