How to Scale Your Business - Biz Buds Podcast - Tom Ross & Mike JandaHow to Scale Your Business - Biz Buds Podcast - Tom Ross & Mike Janda

How to Scale Your Business

Wondering how to grow your business? The answer is simple: hire more people and delegate responsibility. But if you are a creative entrepreneur, chances are you have considered hiring, but are plagued by the following questions: Where do you start? What is the mindset you need to be in to hire? How do you overcome the fear of expansion when you add overhead to your plate? While it may be tough to get past these mental roadblocks, it is essential for you to grow.

No matter how talented, smart or successful you might be, if you want to scale your business, you will only be able to go so far on your own. You can either try and do everything on your own and run yourself to the ground, or you can hire people to help. Today, Tom and Mike share their insights to help you with the process.

If you are in a rush, here are the key takeaways from this article:

For all the juicy stories that Tom and Mike have never shared before, click on the topics above or keep scrolling.

Tom & Mike’s Struggle with Hiring & Delegating

For Tom, hiring has always been a scary thought. Many of his friends who have seven-figure businesses do a thousand tasks themselves – from editing every video, putting out social media posts to responding to every customer query. And Tom relates to this because his company made a million in revenue before he hired anyone. But as a consequence, he ended up in the hospital. It took him 10 months to finally make his first hire, and because he was too afraid to let go of the reins and do everything by himself, he hired a part-time employee to start off. 

When Mike started freelancing, in year one he built a business of around $203,000. By year number three, when he was heading towards 200 plus, he decided to finally start hiring people. But even though he was billing 200 something thousand dollars a year and was piling money, he was afraid to hire and expand. He was afraid because he was stuck in the mindset of doing everything on his own. He believes that this mental roadblock is something most entrepreneurs end up struggling with, and this inhibits their ability to hire. They think – why would I hire somebody to spend an hour at a task he could do in five minutes.

After years of entrepreneurial experience, they both agree that once you get past this ‘Do-It-Myself’ mindset, you will see the value in hiring and delegating. 

5 Actionable Tips to Delegate & Hire Effectively

Audit your time & hire accordingly

Spend a week or two auditing your time. List down all your tasks and categorize them according to impact. Then, analyse the list and ask yourself: what tasks can I hire a junior person to do?

Mike’s shift in perspective: Mike once attended a business networking event, where he met many creative entrepreneurs. In one of the breakout sessions where they asked each other questions related to entrepreneurship, he realised most of them were struggling with the same problem – there was just too much work for them to do. The one piece of advice that came back to him after these sessions was: don’t do anything you pay someone else to do. 

Tasks that aren’t mission-critical, can be delegated to lighten your workload. Mike took this advice and began writing all his tasks on a piece of paper. From buying paper for the printer and filing receipts to emailing invoices to clients and driving to the bank to deposit the cheque, all the things you don’t necessarily need a design graduate to do, but a person who is organised, skilled and talented. Once he had a list of these tasks, he used it as his hiring mechanism. During the interview, he asked prospective employees if they had any experience with the tasks mentioned on the list, and he hired people on the basis of their competency with those tasks. 

Understanding market rate: Every task and person has a current market rate. For instance, a junior developer has a lower market rate than a senior developer. Similarly, a CTO has a much higher market rate than a senior developer. 

Once you audit, you will end up with a giant list of tasks. Then you can go through them and decide what your market rate is and what your hourly rate is. If you’re spending your time doing junior administration tasks, you’re losing out on your hourly rate and as a result, losing money for your business. However, if you find someone to do these tasks for you, you could be concentrating on tasks that fetch you a higher hourly rate.

For example: You decide to hire someone to do six tasks per day. Each task takes one hour for them to complete. You decide to pay them $15 per hour. This amounts to $120 dollars for them to complete these tasks. But while it takes them an hour, it takes you 10 minutes. Even then, it only costs you $120. And if your market rate is $120 per hour, and you get an hour back because you’re spending $120 on someone who can help you, you are still breaking even on that employee. 

By delegating smaller tasks, you free yourself up to do higher impact work that requires your level of expertise. At some point, you have to realise that the higher impact tasks add more value to your business. 

Mike’s first hire was a kid from high school. His resume mentioned that he was very good at computers. He would come back from high school and would work in Mike’s basement from 3 pm to 8 or 9 pm. Mike would design and build pages on a website and hand it over to the kid who would then replicate these files and create 10 other subpages on the website. While Mike did all the high impact tasks including the initial design and setting a standard, his hire would do all the production-level tasks that required some amount of skill and talent.

Spend your time doing high-impact work

To run a successful business, it is critical to have people come in and execute low-impact action items. 

How Mike’s billings doubled: When Mike went from just him to five employees in one year, his billing doubled. That happened because it freed up his time so he could spend it on higher impact tasks like flying to meet clients, taking them out to lunch and spending more time building relationships, while his employees focused on production work and customer service. This led to more referrals and more work from his clients. People also began to view his business differently. They were willing to give Mike bigger, more expensive projects because now he had a team of people working with him. The perspective of his business changed in the eyes of his clients, and his numbers got bigger as a result. 

Tom uses this podcast as an example: Once Tom ends his call with Mike, the file gets automatically saved and uploads itself to Tom’s Dropbox. Then, his audio guy listens to it, cleans, produces, uploads and schedules it with the appropriate titles. This alone takes an hour off Tom’s plate. Over the weekend, Tom spends an hour writing up Instagram content, after which his designer turns them into nice posts and carousels. 

Then, his newly-hired assistant who manages other admin work too gets the content and starts scheduling it on his platforms. She also repurposes it for other social media platforms like LinkedIn. As a result of this, Tom has content on several different platforms and it frees up at least two weeks per month of his time which he didn’t have before because he is also running a company full time. While he did the initial training, the podcast is now self-sustained and works like magic.

With more time on his hands, he was able to introduce one-on-one coaching sessions for $500 per hour. Two people booked him and it paid for many days of work. Because of his team, he was able to save time and money he would have otherwise spent doing low-impact jobs, and reinvest it into growing his personal brand. He claims if they all vanished tomorrow, he is going to have to stay up until two in the morning, editing his own podcast. So this is a good example of doing the work you love the most and has the highest impact. 

With the right people, you will build a support network that will allow you to focus on high-impact work and the growth of your company.

Start hiring at a small scale

If you’re afraid of hiring, these are some of the questions you’re probably asking yourself: how do I understand the HR process? How do I set up payroll? How do I find the time to figure all of this out? It is understandable to be nervous about hiring because being a manager requires a completely different skill set than a creative or entrepreneur. If you’re at the initial stages of hiring for your company, start small. Start by delegating a simple task that takes 30 minutes of the day off your plate. 

In Tom’s wise words, if you delegate that, you never go back: When you actually get something off your plate because someone else is helping you with it, it will become inconceivable that you would ever take it back. Tom is a huge believer in hiring contractors or part-time hires to get the ball rolling. Ask a contractor or someone junior to step in and help. Don’t start with automating or delegating your expensive high-impact tasks. Start small and get comfortable with hiring, expansion, new cash flow, managing, and most importantly letting go.

Tom’s first hiring experience: Back when Tom was running his blog he had the arduous task of publishing tutorials. The process was a long, drawn-out one where he had to go on 30 different tutorial directories and fill out a form to submit. He also had to fill in a title, description and reformatted images. While it wouldn’t take very long, probably a handful of hours each month, he hated it. So, he went on a website and found someone who would do it for him at a very affordable price. This proved to be a successful hire because they finished the task like clockwork and sent him an invoice every month. He went years with the task just happening in the background and only spoke to them when he got their invoice. 

So do your ‘Mike Janda’ audit and assign the lowest impact tasks, or the ones you enjoy the least, to the most junior employee or contractor. And that will be the eye-opener to convince you that delegation works. 

View your business on a three-month increment

The truth is for most creatives, it’s hard to predict their business six or nine months down the line. Marketing is just such an evolutionary business, you can’t go to your clients and ask what they have coming up in nine months. They’ll say, they don’t know. However, they will probably plan for three months. Many businesses work off a quarterly budget, it is standard practice. Public trading companies also report their earnings on a quarterly term. If you also start to view your own business on a three-month increment, instead of an annual increment, it frees you up to make hiring decisions without the fear you have at that moment. With a three month increment, you have a window to look ahead. 

For instance, if you are too busy in January, don’t hire. Just put in the extra hours and get the work done. If February is busy too, hold off on the hiring. Keep working and grinding because you know that March is going to be a slow month. But if suddenly March is also projected to be as big as January, then you’ve hit your three-month mark. This isn’t a spike in your workload or your revenue, this is a new plateau. And a new plateau is when you want to start hiring. You’re hitting big numbers, you’re showing signs of consistency, now you need a team to get to this new, higher level of work. 

Many entrepreneurs are afraid to hire because they’re afraid of investing in people instead of their own businesses. Picture this: hiring an employee costs you $5000 per month. For three months, it amounts to $15000. You evaluate your profits and realise that you are going to have $15000 of profit over the next two months. As a result, you can hire a said employee for the next three months. While it is going to be a $15,000 risk, it isn’t a $60,000 annual increase in your overhead.

Once the employee comes into your business, they have a responsibility every bit as big as yours to prove valuable to the business in 90 days. And if after 90 days, you’re not sitting there wondering how you did what you did without your employee, tell them it’s not the right fit. Let them go and find a new opportunity that is better for you and them. But chances are, after three months you’re thinking you’d rather pay your employee than yourself because you got yourself a good hire. This is how Tom and Mike have felt about most of their employees.

You can’t put a price on your sanity. While teams and employees can definitely help you scale, they will also provide you with the support you need to take your foot off the gas. So even if you’re breaking even or have plateaued, having a support system really helps. It’s not always about revenue.

Assess your range of risk

Gary Vaynerchuk’s agency has now scaled up to about 900 people. He is hyper-aggressive about scaling and tends to hire people as quickly as possible. He reinvests every single cent and therefore, runs the company at basically no profit. He pays himself a small salary and puts the rest of the revenue into hiring. Hiring too quickly can lead to bad hires, but he doesn’t care because he’s willing to take those smaller hits for the larger macro game. This is very common in startup circles as well. They get funding because they are trying to scale faster than their competition and become the next unicorn startup. 

Similarly, Amazon ran their company at a loss for almost 20 years. They grabbed the market share by reinvesting their profit and when the time came for profitability, all they had to do was stop investing in market share. This resulted in their profits skyrocketing. 

So if you aspire to be the next Amazon, you don’t do it by being super-profitable along the way, because someone who’s more ruthless and more willing to take risks is going to do what Jeff Bezos did. You cannot compete with a company that pays little to no tax and runs at zero profit for 20 years. That is why they’ve swallowed all the smaller players. And love it or hate it, this strategy has proved super effective for them.

But if you are cautious or risk-averse like Tom, don’t start investing money at a crazy scale. Continue to hire, and do so in a way that isn’t risky to you. As Mike said, you can actually evaluate your business, see how viable it is. Hire a part-time contractor, instead of a full-time employee to begin with. You don’t have to put everything on the line.

For example: For his list of delegations, Tom wrote mowing the lawn as one of his tasks. But mowing the lawn is a four-hour job. And if, for instance, his market value is $200 per hour, then it’s a waste of $800 dollars worth of his time. He could simply hire someone to do this instead.

That’s how a thriving economy works. If everyone did everything themselves, there would be no economy. As an entrepreneur, you are meant to hire people. When you pay someone else to do work you simply can’t do yourself, it is a better use of your time. With this free time, you can either rest or take up work with bigger returns.

In conclusion, delegating will definitely have a positive impact on your life. When you finally take the plunge you will not only notice how it impacts your business but also how relaxed and happy you feel. But remember, no matter how well you delegate you will have tasks in your day that aren’t big revenue drivers. They will always exist in some form. But hiring people will help you reduce and scale them back rather than them taking over your day. 

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