Do you know how to tell whether a Ramen joint is a good one?
You test the place by ordering the simplest version with just broth, noodles and a few garnishes. No meat, no shellfish, no other exotic or expensive ingredients.
The same goes for discovering the best Burger, Arepa, Dumplings, Pizza, Curry, etc.
Why?
The reason is: Simple dishes have nowhere to hide. They'd better be darn good with very limited ingredients.
With fewer ingredients, it comes down to how a creator of that dish crafts ingredients by adding just enough skill to make it shine.
This is, by far, the hardest thing to do.
Instead of hiding behind bells and whistles, a creator must resist the urge to show off for the sake of his ego and let his dish do the magic.
Adding is easy. Subtracting is hard.
Not only is it hard to strip a dish down to bare minimum, but it's also hard NOT to feel inadequate. Since it is so simple, the dish will be judged by the level of confidence, knowledge, and restraint that a creator possesses.
I know what you are about to ask.
“How is creating the simplest dish even relevant to scaling a business?”
The simple strategic concept below can help you create new milestones to scale your business. Also, you will find whether your business is “scale-ready” by answering 5 statements.
So, read on.
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Stop Amplifying the Mess as a Way of Scaling
In the world of entrepreneurial service business, this Ramen principle applies to generate a sustainable and scalable business.
Instead of focusing on adding elaborate additions to your business first, invest your time and effort to create the smallest version of the business that works, which will accelerate the speed of scale in the long-run.
This is often overlooked, frankly, because it calls for a massive amount of frontloading work. It requires time, numerous trials, and patience to perfect your own formula over time.
The process is quite unsexy. You might even find yourself bashing your head against the wall a few times.
As you guessed it, not many are patient enough to go through this journey. That’s why the game of running a business does not qualify everyone on earth to participate.
This simple concept will put you in the right mindset of perfecting a simple formula strategically, rather than letting the business grow at its own pace.
In my time, I have seen many low 7-figure businesses that were grown out of sheer grit, hustle and grind. This can be done, but I must warn you that it is not done without undesirable side effects.
Without an exception, all these entrepreneurs burned out.
As a result, they no longer see their businesses as purpose-driven or mission-driven. Instead, they care more about serving their own needs and wants.
Because they grew their business organically, not strategically, they have loads of “undoing” to do that they have built up over years. I often refer to this as “a machine with 1000 Band-Aids.” It’s ugly.
Often, they have misled their employees by forcing the same level of grit, hustle and grind onto them causing a high turnover rate and toxic work environment.
Their business stalls at less than 2 million gross annual revenue mark. Worse yet, their profit margin stays the same causing stagnation. At this point, they can’t scale without deploying a drastic intervention.
I would hate to see you go through the same journey. Basically, all they did was to amplify their mess thinking they were “scaling.”
More customers, more employees, a bigger office, new locations, new offers… these things create an illusion that their businesses are scaling. On the contrary, it is on its way to a slow spiral death. They just don’t know it yet.
Here’s how you can avoid this route.
Scale Down Before Scaling Up
Just like a car or a house, businesses also require continuous maintenance. We all have our own messy areas that either need to be cleaned out or streamlined.
It could be about sunsetting some offers. It could be about niching down. It could be about spring cleaning your finances, team or partnering vendors.
Ironically, the most popular questions I get from entrepreneurs are:
"Should I start XYZ in my business?"
"Should I offer XYZ?"
"Should I do more of XYZ?"
In most cases, that's hardly ever what they need to do with their business.
Of the entrepreneurs I talk to, 8 out of 10 of them on average need to cut down on their offers, funnels, email sequences, etc.
The part that makes their business stand out is often covered up by useless frills that may or may not catch people's attention. As a result, they either lose sight of what moves the needle or lose clarity.
This is even more tragic if they are spending the bulk of their time adding services that amount to no revenues only because they are too scared to face the real work.
Just imagine for a second that you already have the most simplified version of your business. How does that make you feel?
I bet you will feel:
In control because you can see everything easily without being distracted.
Confident because you know you can deliver on the promises you make.
At ease when exploring other options to scale your business knowing your current model works with less maintenance.
You don't need a longer, more elaborate funnel. You don't need 7 different email segmentations. You don't need a website with 20 pages with the latest plug-ins. You don’t need lead-magnets that sign people up for your email newsletter but with a dismal sales conversion rate.
More business activities and more offers do not equate to growth of your business. It’s just more work.
If you want to scale your business, it’s time to go back to basics.
What Does a “Scale-Ready” Business Look Like?
Simply put, a “scale-ready” business model achieves the maximum effect operating on fewer resources and no waste, just like the simplest Ramen. If the broth is impeccable, the texture of the noodle is just right with a bit of garnish, this magical combination will make food critics go bananas.
It looks deceptively simple, yet it delivers everything customers want.
What you want to do is leverage what you already have with less effort, as opposed to hustling and grinding. Once this is figured out, you can easily formulate how to scale either ‘as is’ or explore ways to tweak so that it would be more appealing to a wider audience.
Better yet, once you perfect your business model formula, you can charge more. It is not always about increasing customers or offers.
Make no mistake, this is NOT about cutting down on things to save money or reduce sales. This is about identifying stagnating areas of your business to scale exponentially. This means cutting down on some business activities and doubling down on what generates sales.
Also, it is important to note that this is NOT the same as creating an MVP (minimum viable product), which is a good concept and methodology for product players. For service players, creating a business that is a “perfectly manageable & complete offer that transforms someone’s life that is replicable” is the goal.
Your Business is Scale-Ready If…
If your answers to the below are “yes,” then your business is “scale-ready.” The questions you answer “no” to are obviously the areas you will want to work on.
We all have weak spots in our businesses, and I personally have not encountered any business owners who answer yes to all of the 5 statements below unless they are lying.
Your business has a clear message that conveys the value, vision and promise that your customers want to get behind, and this has been tested with data to back it up.
You have a smallest & meanest version of your business model that allows expansion without incurring massive additional costs.
You have a battle-tested, streamlined workflow system that has a capacity to scale.
You have a solid plan as to how you want to form your team to satisfy #3 while keeping #2 in mind, and you have a plan to attain them.
You have been consistently perfecting the way you communicate with a wider audience maximizing the use of #1.
Remember, you do not want to amplify the mess. You want to healthily scale. Any business activities or resources you are paying for or spending time on that do not fit the statements above should be slashed.
Get Your Business to be “Scale-Ready” with 5 Key Ingredients
#1: Flip Your Narrative from “Fear of Loss” to “Newly Gained Freedom”
Unlike adding something new to your business, which can be overwhelming but also exciting, eliminating unnecessary parts of your business can be unnerving and uninspiring.
Earlier in this post, I mentioned it takes a high level of restraint to pull it off. Some of you may feel fear of losing something that you build over time. It is completely understandable, but this resistance can hold you back from getting started.
To combat this, I want to offer another perspective by asking you, “Is it truly worth holding onto?”
Give this a deep thought.
But it is hard to let things go. If you see the possibility to gain something special, something that you need (i.e. mental capacity, energy and time), I bet you will find a way to push forward.
#2: Understand that You Need to Achieve Simplicity, Not to Create It.
When it comes to incorporating the Ramen principle in your business, it's vital to think of it as a journey or a process.
In other words, it either starts from a mess you currently have or starts from creating a mess by conducting various experiments while monitoring each effort strategically. This is perfectly OK because no one produces a simplest version of his business out of thin air.
“Simple” does not mean “easy.”
But rest assured, if done right, there will be a time when you hear the sound of “click” when the pieces fall into place. At that moment, will feel all your work was worth it.
I think there are too many entrepreneurs who give up too early to see the light at the tunnel. Action creates clarity. Holding on to something that no longer serves you will keep you further away from clarity.
You don’t just throw this together. There are numerous iterations involved in ultimately arriving to this final product down to incorporating the art of “purposeful imperfection.”
#3: Make the Time to Step into a Role of CEO
The work required to “scale-ready” your business happens outside of regular operations. This can be a huge challenge because you must set some time aside to do this work.
There is no easy solution to this, other than to truly commit.
What has worked for me is to step away from the usual work with a notebook. In the beginning, I was concerned about new emails coming through, the constant flow of texts, etc. But, over time, I learned to ignore them for a short period of time by telling myself, “There is nothing more important than this for my business.”
You can start small. Perhaps earlier in the morning before getting started to work may work the best for you. It may be easier to do it over the weekend. Whatever you do, remember that working ON (not IN) your business is far more important for its well being. If you keep pushing this work away, the act of doing so can set you back for years.
I know this from my own experience. I used the work with my retainer clients as an excuse to put this work on the backburner. The truth was I was too burned out and did not have an ounce of energy left to work ON my business.
In the end, I had to accept the reality that engagements are engagements. No matter how much I work, if the work isn’t replicable, it will not be sustainable.
Calling yourself out at times is part of your job as a CEO.
#4: Edit, Edit, Edit with a Set of KPIs (Key Performance Indicator).
When you set out to improve efficiency as well as quality of your offer, you have to quantify the results.
As a starter, you should ask these questions while you monitor progress. First, measure how long it takes to complete your offer without making any changes, then keep track the progress over time.
1. How fast can be done from start to finish of your offer?
2. What's the least cost required to complete your offer from start to finish?
3. How many people, at minimum, do you need to maintain the quality of your service that you promise to deliver?
4. At what point does this offer become unprofitable or beyond cap? (Find a fatigue point.)
5. What else can you use to cut down the lead time without sacrificing quality? Technology? Specialists?
During this process, what you are looking for is unnecessary redundancy. You might also find a process that can be cut down in half with a proper template in place.
#5: Don’t Forget the Qualitative Side of Things.
Monitoring the progress using a set of of your choice (#4) is vital because it helps you to take your emotions out of the equation. The way you feel about certain business activities or your attachment to the things you are accustomed to can cloud your judgement.
However, this is not to say that you have to discard all your feelings and senses, not to mention your original value, mission and promise.
It is all about maintaining a good balance between qualitative and quantitative objectives.
When you have to make a decision, be sure to look at it from both sides. What are the numbers telling you? Is this aligned with your core values? You need to be able to say “yes” to both questions.
Final Word – Do You Really Need to Scale Your Business?
All this time, you were reading about how to successfully scale your business by scaling down first. By now, you have the concept engraved in your brain.
So, why am I asking this question to you at the end of the post? Why now?
This is actually strategic on my part. I want you to pause and think about this question before diving into scaling your business.
There are a handful of well-regarded entrepreneurs who consciously made a decision not to scale because scaling doesn’t allow them the kind of lifestyle they want. And these entrepreneurs are pretty vocal about their choice.
This doesn’t mean that they did not perfect their business model. On the contrary, they perfected it to the point that they know exactly what to do in good and lean times. The only difference is that they decided to keep operating their smallest & meanest profit generating machine as-is.
With this decision, there is a cap on their gross annual revenue, and they are perfectly OK with this as their goal is to enjoy life.
Scaling is not everything.
If you are interested in learning more about not scaling your business in a conventional sense (moving into a larger office, hiring more employees, etc), I’ve written about the book, “The Million Dollar, One-Person Business.”
So, I want to leave you with this question, “Why do you want to scale your business?”
There is a right and wrong answer. If you feel you need to scale because everyone else is aiming for it, this is the wrong answer. Another wrong answer would be to believe that scaling is the only way to make a business profitable.
Before you start to romanticize scaling, I strongly recommend you explore what matters most in your life and make the best decision for you.
Scaling on your mind? Before you dive in, be sure to check out this post to find out whether your business is “scale-ready”!
Is this year going to be THE year you are going to scale your business? Find out if you can say “yes” to these 5 questions!