Scaling Your Business Sustainably
Summary
In this episode of the Tilt Podcast, Joel and Jed discuss the nuances of scaling a business sustainably. They emphasize the importance of understanding the reasons behind growth, the challenges faced in specific industries like construction, and the necessity of diversifying services. The conversation also touches on the strategic use of debt and the critical role of planning in achieving business success.
Takeaways
Growth is a valid path for business if done sustainably.
Understanding the 'why' behind growth is crucial.
Growing without a plan can lead to failure.
The building industry faces unique growth challenges.
Diversifying services can lead to increased revenue.
Cash flow management is essential for business health.
Debt can be leveraged wisely for growth.
Planning is key to achieving business goals.
Current customers often want more services.
Sustainable growth requires a solid foundation.
Keywords
business growth, sustainable growth, scaling business, service diversification, leveraging debt, business planning
Scaling Your Business: Why, How, and When to Grow
At Tilt Business Coaching, we’re passionate about helping business owners achieve their goals. Growth is often a part of that journey, but it’s not the only path—and it shouldn’t be pursued blindly. The decision to scale should be intentional, sustainable, and aligned with your personal and professional objectives.
Here’s a closer look at how we guide clients through the complexities of business growth, including the common pitfalls, critical foundations, and strategies for scaling successfully.
Start with the ‘Why’ of Growth
When a client expresses the desire to grow their business, the first question we ask is simple but crucial: Why?
Growth should be purpose-driven. For instance:
A good reason might be wanting to build a team to free up personal time, create additional income, or achieve specific lifestyle goals.
A poor reason might be feeling pressured to grow because “everyone else is doing it” or being influenced by social media hype around flashy lifestyles.
Growth for its own sake can lead to burnout and financial strain. The best growth strategies are tailored to individual goals and grounded in practicality.
The Challenges of Scaling
Scaling a business isn’t just about adding more clients or employees. It requires careful planning, especially when transitioning from a small operation to a larger one. For example, in industries like construction, we often see builders fall into the “growth trap.” A sole trader who’s comfortable managing a small team may assume doubling their workforce will double profits. Unfortunately, it’s not that simple.
When the owner steps off the tools to manage multiple teams, the business must generate enough profit to cover not only their own income but also the wages and overhead for additional staff. Without proper pricing, systems, and financial planning, this can result in decreased profitability—even if revenue increases.
The key takeaway? Scaling isn’t just about more jobs or teams—it’s about building a solid foundation first.
Laying the Foundations for Growth
Before scaling, it’s essential to understand the financial, logistical, and operational aspects of your business. This includes:
Knowing your numbers: What are your true costs for labor, materials, and overhead? How much profit do you need to sustain growth?
Pricing correctly: Ensure your pricing reflects the value of your services and covers all costs associated with scaling.
Planning strategically: Growth should align with your end goals, whether it’s creating more time for family or achieving financial independence.
For one of our builder clients, we spent months refining their pricing structure and forecasting the costs of hiring additional staff. Only once these foundations were solid did we proceed with scaling their team.
Choosing a Growth Direction
Growth doesn’t always mean acquiring more customers. For service-based businesses, expanding offerings to existing clients is often the easiest and most effective path. Consider:
Diversifying your services: What additional value can you provide to your current clients? For example, an accountant might add bookkeeping, financial planning, or consulting services.
Creating synergies: Can your business link with complementary industries or offer bundled services?
Jed, one of our coaches, expanded his own accounting practice this way, eventually building a multi-faceted business that included bookkeeping and business coaching—all while serving the same core client base.
Funding Growth: Leveraging Resources Wisely
Growth often requires investment, whether it’s hiring staff, purchasing equipment, or expanding operations. Many business owners hesitate to take on debt, preferring to save up instead. While saving is a great habit, leveraging debt strategically can preserve cash flow and provide the flexibility needed to scale.
For example, one of our clients wanted to invest $200K in a new venture but planned to save the entire amount first. We advised them to borrow instead, keeping their savings as a financial safety net. Cash flow is king in business, and having reserves can mean the difference between survival and failure.
Scaling Done Right
Scaling a business can open doors to new opportunities and greater freedom—but only if done with intention and care. By focusing on the why, building strong foundations, and leveraging resources effectively, growth becomes a tool for achieving your goals rather than a source of stress.
If you’re considering scaling your business, remember: more isn’t always better. It’s about doing the right things for the right reasons, with a clear plan to make it happen. At Tilt, we’re here to help you navigate the complexities of growth and create a business that works for you.
