By mick | July 16, 2021

EPISODE 53 | Why you are Scaling Your Business Wrong

Hey folks and welcome to another episode of Builders Business Success Podcast!

A few little things have changed.

I thought we’d put a new segment together because we’ve got a floating light bulb and it’s called, idea of the week. ‘Cause we’ve got a floating light bulb, had to use it somehow.

So the old personal productivity hack is kind of gone, we’ll still do personal productivity hacks, it’ll be a good idea, but it’s allowed us to broaden our horizons as far as what we can talk about.

Instead of it just being a personal productivity hack, it could be all sorts of good ideas.

And if you’ve got a good idea that you’d like to share something that you have heard from us or from some other source and you’ve implemented and it worked well for you, I’d love you to share that idea.

So you can sort of send me an email? You can comment on one of the live streams.

So what we are talking about today is how to scale without the stress.

We’re gonna also do a Q and A.

And of course, idea of the week with the new floating light bulb.


*Transcription of the show*

So let’s fly straight into this and talk about how you can scale your building business without the stress. And I’ve spoken to a lot of builders over the years, and there is a bunch of you when we use the word scale, you run away screaming.

And I understand why, but I just want to debunk a few myths about really what scaling is, and why often when I talk to a builder about scaling, they just don’t want to, “I don’t wanna go anywhere near it.”

One of the reasons that that might be in your mind, where you might be going like, you know, there’s no point in listening to this podcast because I don’t wanna scale my business, I want to stay small.

Scaling isn’t really about the size it’s about the performance. We’ll unpack all of that, so just stay with me and open up your mind to the possibilities and the benefits of this, because there will be a gain, a massive amount of benefits if you understand genuinely what scaling is.

So one of the reasons that that builders don’t like talking about or thinking about scaling is that maybe you’ve gotten bigger before, and they’ve put on more people, and they’ve had bigger jobs, and they’ve been bigger prices on the jobs and so forth. And it got very, very stressful because everything just got bigger. They ended up having less time.

You would think as your business got bigger you had more people doing things, you would have more free time, it doesn’t work out like that for most builders, and we’ll understand why by the end of this podcast. And more often than not, here’s the weird thing, revenue goes up significantly, profit goes down, which is a bit silly.

So now you’ve got more risk, you’ve got more work, you’ve got less time, you’ve got less profit. No wonder people don’t want to talk about it, and don’t want to have a focus on how to scale their business.

What has often happened is that they have just gone back, like so many builders I’ve spoken to, that had maybe 10, 15 guys, what have you. And then after so many years, they’ve just gone back to them, sometimes just them and an apprentice, for instance, but they’ve definitely paired it back and got less people on the team.

Or they’ve just gone back to just using subbies and no one on the team, because it seems easier if it’s smaller. But the problem is, the underlying problem with all builders that grow, is that if the fundamental business model is flawed, the problems expand in an exponential way.

And what that means is, you know, let’s say you had four problems and you probably wish you only had four in your current business, and it doubled in size. That doesn’t mean you’ll have eight problems, it will probably mean you’ve got 16.

That’s what I mean by the problems increase exponentially as you grow if your business model is fundamentally flawed. So the key with this is to understand the scale process, and we’ll unpack that as we go through today, but not be scared of it.

And understand that we’ve just gotta make sure that the fundamentals are covered, you’re doing them effectively before you start to make it grow, before you make it bigger.

So you avoid the problems blowing out. And that’s what’s happened to so many builders I’ve spoken to, and no wonder they go, “I don’t want to scale.” You know, they have been once bitten and they’re absolutely twice shy.

Now the thing is, the reason that pretty much every builder I’ve ever spoken to anyway, the reason that they got started, if they can remember, was that they wanted more time freedom. They wanted to be their own boss to make their own choices, they wanted to make more money.

They wanted to call the shots, pick and choose which jobs they wanted to do and all that sort of stuff, because they felt that they would get more freedom working for themselves than they would with a boss, they would get more money working for themselves than they would with a boss.

And as I said, you can call the shots and decide who you work with, who you want, what jobs you take on, what jobs you want. That is very rarely the case for builders.

That they have more time, more financial freedom, and more choice. And particularly if you’re going to stay small, getting any of those sorts of freedoms becomes much, much harder.

Because it doesn’t matter how good you are, how efficient you become, there are only so many hours in the day, so you basically do need other people to do the work to give you that freedom. And that throws up a whole nother layer of problems and challenges to be able to manage a team and manage all of these spinning plates. But stick with me, I’m gonna show you a way through this.

So what’s in the way? We’ve kinda discussed this, but really what is in the way of scaling properly is understanding what real scaling is. And real scaling is getting that freedom.

So as your business scales, it means you can take on more business, more people, but it doesn’t add, in fact, it can reduce your own personal workload and it increases your financial remuneration, your financial rewards.

So that’s what we’re trying to do it for, and if you’ve got the right model you can scale it. You can increase without increasing your own workload and the massive amount of problems. Part of the problem is mindset, okay?

Because, and I think we’ve talked about this in previous episodes, there is a difference between the mindset of a business owner and the mindset of an entrepreneur. And the mindset of a business owner traditionally is if something needs to be done I will do it.

And so the business owner tends to grab things and add them to their own list, because they care, which is a good thing, because they are skilled, which is a good thing, but they think that no one else cares as much and will do as good a job as they would. And so they tend to take on more, take on more, take on more.

The effect that that has on your daily action list is it keeps growing and growing and growing, you end up with less time yourself, you get stressed out, you get burned out. You make poor decisions which can cost you, can create more of a time load on you and can cost you money as well.

And certainly because you’re taking on all of these things, again, there is a limit to how many hours in the day, how much you can get done. So you end up being the bottleneck for your business.

That’s the key here, is that we’ve got to shift from having that business owner mentality to an entrepreneurial mentality or mindset. Because the entrepreneur’s number one priority every single day is to do something that will contribute to the removal of something off their daily action list permanently.

So let me say that again; The entrepreneurial mindset is such that their number one priority every single day is to do something, one thing at least, that will contribute to the removal of something off their to-do list permanently, big difference. So the mindset of the business owner is I’ll take that, I’ll do that, I’ll do that, I’ll do that.

The entrepreneur is, how can I delete? How can I get rid of that? How can I just not do that anymore? Or how can I automate it? Or how can I outsource it? Or how can I delegate it? So they are the four things that the entrepreneurs thinking about all of the time; Is dump, ’cause that’s the best way to get stuff…

There are things, I’ll guarantee you, that there are things on your list that probably show up daily, if not weekly, that if you never ever, ever did them again, it would make zero difference.

We’ve just done them for so long, we’ve hypnotized ourselves into believing that they’re important, they’re essential, we must do them because it is now a habit.

If you step back from some of those things you’ll find, and if you ask this question, what will happen if I don’t do this today, or if I don’t do it at all? There will be things, I guarantee it, there will be things that will make such a small difference if you didn’t ever do them again, just, you can not do them, and you can start to use your time to do the high leverage things that you know you should do but you just never get around to it.

So you should be thinking, dump, you should be thinking, automate, is the next one. The next one is outsourcing. And these are all in the order of how much it costs. So it costs nothing to dump. it costs very little sometimes to automate, because there’s so many apps and software out there, you’ve just got to get somebody to be able to set that up for you.

But that might be a decent cost in the beginning, but it piles into insignificance after a little while. Then outsourcing is a little more costly again, and the most costly is delegating, someone who’s in your team that you are delegating to. That’s the most costly of all, and in fact the most costly of all is keeping hold of it yourself. But if you’re getting it off your list, that’s the order that you should be doing it in.

The other thing that is in the way of you scaling is just that past that we’ve talked about. So don’t allow the past to dictate your future, because if you’ve got a new mindset, if you’ve got a new model to run your business, so if you’ve got a proper attract strategy.

So all of the things that we’ve been talking about in past episodes, how to build a proper attract strategy, and mindset, and philosophy in your business, and a culture. How to have a quality client pathway that educates your prospects into becoming a great quality client and gets rid of the people who are inappropriate for you.

If you’ve got those things in place, if you’ve got the deliver plaster that we’ve talked about in place, where you’re managing and creating a better team culture with communication and so forth, and procedures and systems.

And then finally the financial management, which we haven’t talked about yet, that’ll be in a future episode, just the financial management. But if you’ve got all of those four major parts in place, you can now scale because it is a solid business model, and you’ve eliminated all of the common and costly problems which will allow you to scale a business.

But here’s how you need to approach it, and this is absolutely critical as far as scaling. And that is that you’ve gotta use what I call a ratchet system, not a rat shit system, a ratchet system. And what that means is that you’ve gotta identify certain performance criteria in your business. And for instance, it might be a net profit percentage for instance, but you can use anything.

It could be an efficiency or a productivity goal for onsite stuff, it could be for administration, whatever. But you’ve got to pick various parts of the business and select an objective, a measurable objective, and knowing full well that to attain that measurable objective, that improvement, you will need to work harder.

There’s no way you can do it without working harder, just accept that. So what we do is, here is the current level of the performance, and we need to improve that level of performance.

You need to take it from here to here. And we know that our required daily activity is here, and to get this new improved output, we need to lift our activity.

But here’s the most important thing, why this performance needs to have a cutoff, a deadline. Is once you hit that objective, that measurable objective, all, not some, but all of your effort needs to go to that entrepreneurial mindset of learning how to reduce and completely eliminate your need to contribute to the maintenance of this new performance criteria or performance outcome.

And so you go, you improve, improve, improve, but you work harder, you work harder, now I’ve hit it. Now, all of your effort needs to go on learning how to dump, automate, outsource, delegate, but get stuff off your list so your required effort on a daily basis comes back down to zero, not a little bit, not 20%, but zero.

So you can then pick something else and you increase your workload, and you bring it back down to zero. That’s why it’s a ratchet system. It’s like one of those four wheel drive jacks, you know? They get up here, and then this comes down, and the whole thing goes up, and then this comes down.

And you’ve gotta have that mentality, you’ve gotta develop the entrepreneurial mindset and have very specific, measurable improvement objectives for your business.

Get it to that point, and then put all of your effort on how to eliminate, remove yourself from being necessary to maintain that new level of performance. So how you do that; You must put time into team. And I’ve made a note here for myself, T-E-A-M, which means together everyone achieves more.

So you’ve gotta put effort into bringing on your team and having higher team morale, better team communications, having the team contribute to improvements in productivity and efficiency and enjoyment, and all of that sort of stuff. You’ve gotta put time into that.

You’ve gotta put time into procedures, so how to be more effective doing all of these things. And you’ve gotta put, absolutely, you’ve gotta put time into self, and that means communication and leadership skills.

And that is going to lead me into the, not the next part of the show, but the bit at the end, the new idea where we’re gonna show you the light bulb and everything. An idea that will help you do those things, make sure that you’ve got the time for self and improving all of those things.

So I hope that made sense, and I hope that has busted the myth that, you know, your head will explode if you try and scale your business. It just means that most people are doing it wrong.

If you do it this way, in a very matter of fact, and measured about it, you can scale your business, even if it didn’t work for you before in the past it will work for you in the future.

Q & A

Our Q and A; There was a question asked just recently and it was how to keep focused. Now somebody has just made a comment and it said, “Morning Mick.” So morning back to you, I can’t tell who it is with this new system.

So at this stage you’ll need to put your name in there as well so we know who it is. In the future we’ll be able to put a link in there so you can click that and give us permission to find out who’s putting the comments in and we can have a proper conversation. It should be exciting.

But the question that was asked is how to keep focused. ‘Cause there’s lots and lots and lots of distractions and people wanting you, and ringing you, and tapping you on the shoulder, and knocking on the door, and all of that sort of stuff.

So I’m gonna cut to the chase here; The key with this are your goals. And most people… It’s Stevie O. Hey there, Steve O. It’s so good to hear from you all the way down there in Warrnambool at the end. Oh, he says it’s the start of the Great Ocean Road, that’s right, not the end of the Great Ocean Road.

It just depends on your perspective. So the key with keeping focus is that most, particularly adults, we don’t have written goals. We’ve tried it, it didn’t work for us so it’s all too hard. And the challenge is that we don’t have goals that really inspire us.

Now, if you wanna go back and find another episode where we talked about the personal success ritual, that is an absolute key process, or activity that you can get into that can powerfully impact this.

But the key is you’ve gotta have goals that really mean something to you. If you are being constantly distracted and interrupted, that is a sure sign that the goals that you have, the objectives you have for yourself and your business, are not powerful enough.

Because even if you think that you’ve got goals and objectives that are important, if you are getting distracted, that means at a subconscious level they’re actually not that important.

So we need to revisit that and figure out what we really want that gets us up early and keeps us up late with passion. Because, here’s the old analogy that I use all of the time, if you’re on your way to catch a plane, and hopefully we’ll be able to still catch planes with what’s going on, we’ll be allowed to catch them again.

You’re on your way to the airport, you’re only just gonna make it in time, and your good mate rings you up and says, “I know you’re going to the airport. Can you drop past my flat and feed the gold fish? I forgot to do it.” And you’re only just gonna make it to the airport, you’re gonna say, “Dude, sorry, I’m only just gonna make it.

I can’t do it. I Can’t help you out. You’ll have to find somebody else.” And you go straight through to the airport because missing the flight is so important. You know, you cannot miss that flight because you know what it’s going to cost you in time and money, and missing out on opportunity and all of that sort of stuff.

So you need to have goals that get that sort of focus for you, and I’ll guarantee you, when you’ve got goals and objectives that are powerful and grab you by the heartstrings, you’ll be almost impossible to distract, and your interruptions will dissipate and disappear. So that is the answer to that question.

Personal Productivity Hack

So here we go. Are you ready folks? Drum roll. It’s time for idea of the week.

I better do this again while you’ve got the shot of the light bulb, so you can see that it actually is floating. No magic tricks or post editing or anything like that. That’s actually happening.

So here’s the idea of the week, and I’ve got this prop here. And this only arrived yesterday, it’s a big clock. Now in the past have talked about time blocking. Time blocking is so powerful.

All the things that I talked about with scaling, that you’ve gotta work with your team, you’ve gotta work on yourself, with your communication skills and the leadership skills. Everyone goes, “Yeah, I know, I know, I know.”

But they just don’t get around to it because they give all of the onsite work and what have you, priority. And the secret to getting this sort of stuff done is time blocking, just blocking out small chunks of time to do the work on the business.

That’s the key with this, is you’ve gotta do work on the business, you’ve gotta do that thing that I talked about with having that entrepreneurial mindset where you’re always working out how to get stuff off your list.

And I found this to be a magnificent tool for time blocks, because with a time block, you’ve gotta have a start time and you’ve gotta have a duration. And this is a really cool little tool for getting that duration right.

So if you’re gonna give yourself a 10 or a 20 minute time block, you simply wind it round here and let it go. And listen to what happens. It ticks. And you might think, well that’d be frigging distracting.

Turn everything else off for your 10, 20 minute, 50 minute time block, and just have this ticking going in the background, and you think you’re at your grandma’s place.

But you’ll hear this ticking, and it has an amazing effect because of the beats per minute. It’s a derivative of 60 beats per minute, and it gets you into an alpha brainwave state, and it’s very visual too with this red thing. And you can see the time dissipating.

So you turn off all your distractions, you get one of these bad boys, I think I got it off eBay or somewhere like that, you’ll find one. And you’ve got that noise going, your phone’s off, your email is off, and this is ticking down, and the time is disappearing. It creates a sense of urgency.

And then once it finishes, guess what? It does this. That signifies that it’s all over, and you’ve got to stop your time block when it does that. And if you keep doing that, it trains you to have this sense of urgency and focus, and turn everything off to get stuff done.

And if you were to do some 10 minutes, some 20 minutes, some 30 minute time blocks each day on the really important things, and guys and girls, I’ll guarantee you that you waste significantly more than 20, 30, 40, 50 minutes an hour a day, guarantee it. And if you start to do some time blocks, you will be blown away by how much you can get done in a short amount of time.

But get one of these bad boys or something like that, that makes the noise, turn all your distractions off. Start to get into your time blocks and you’ll be absolutely amazed at how much you get done.

So we’re drawing to a close for this podcast. I don’t wanna go over time as I always do.

Takeaway & Jump On A Call

So what’s the takeaway?

In my world, what we’ve talked about today is your business is a platform for supporting your lifestyle. It’s not meant to suck the life out of you. It’s meant to give you a life.

And it absolutely can if you implement what we talked about in today’s podcast. It can be a platform to give you the lifestyle, the timeframe and the financial freedom, and the choice to do a whole bunch of things if you approach it the correct way.

So that’s it for this podcast. I hope you enjoyed it, I hope it inspired you, I hope it changed your mindset. And as I said, I’d love you to give us a call. If you’re listening to the audio only podcast, you can go to this website here. You can probably… If you’re listening to the audio only, right?

You probably can’t see me pointing at it, but go to buildersbusinessblackbelt.com.au, hit the, schedule a call button, and we’d love to help you out, point you in the right direction with any of the stuff that we’ve talked about today or on previous podcasts.

And you can hit one of the links in any of the platforms that you’re watching, either the replay or the live one, or if you’re watching the blog, there’s a button underneath the video.

I’d love to hear your comments, make sure you put hashtag live or hashtag replay depending on whether you’re watching it live or the replay, and we’ll figure out which platform you’re watching us on.

So we will be back next week with another Builder’s Business Success Podcast. I hope you enjoyed it.

I’m Mick Hawes from Builders Business Black Belt. That is all, bye for now.

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