#190: Should You Scale Beyond a Business of One?

Welcome to the High Income Business Writing Podcast, helping you propel your writing business to a whole new level. And now, here's your host, Ed Gandia. Hey there. Welcome to the High Income Business Writing Podcast. I am your host, Ed Gandia, and this is the podcast for business writers and copywriters who want to earn more and less time doing work they love for for better clients. Just a quick reminder that you can find detailed show notes for this episode@b2b launcher.com Episode 1 90. Those notes always include a summary of our discussion here, as well as any links to resources I mentioned during the show. You know, for most writers, the idea of growing beyond a business of one is not a consideration. They know they want to stay solo. They know they just want to work on their craft and work with clients who pay them well. And that's pretty much it. But for a few writers, this idea of scaling beyond just a business of one person is a very attractive concept. They really want to grow more of a business, maybe some sort of agency or an agency model, even if it's a small agency, they feel called to do that for a variety of reasons. It could be creative reasons, it could be that they're wired in a more entrepreneurial way. It could be that they were really attracted to the idea of scaling their income and they want to be able to expand their capacity beyond just what they can do. This idea often comes up when I talk to prospective coaching clients. Many people hire me or want to work with me because that's one of the things they want to work on. They want to be able to scale their business, especially more established higher income riders who realize, you know what, I've pretty much hit a ceiling here. I'm looking to grow. Maybe I've tried a few things and I've had trouble being able to scale effectively and they want to work with me on this. And while I love the concept of scaling, and I've certainly helped quite a few writers scale their operation, I want to make it clear that this model is not for everyone. And in this episode I want to talk about that. Because if you don't feel the calling to do this, I just want to tell you right now that that's okay. There is nothing wrong with you. I sometimes feel like we create this culture here, especially in the west, where it's all about growth. And if you're not growing and if you don't have a traditional business where you're bringing in employees and growing your revenue and your profits, then you're not really any Good that you're not really worthy. And that's not true at all. Most of us, I would say, get into this business, meaning writing or copywriting, because we want a lifestyle business. A lifestyle business is really a business that's run by its founder or founders and the main objective is to sustain a particular level of income. The main objective is not necessarily growing the business year after year in most cases. I would say that in the lifestyle business, the core value is definitely not growth. It's really to be able to enjoy and sustain a particular lifestyle, typically one that has a high level of freedom and flexibility. I think when I say lifestyle, a lot of people think that I'm talking about high income and the lifestyle that that can provide you. Not necessarily. I mean, it could be that, you know, your idea of lifestyle business is earning 60 to $75,000 a year, but have all this freedom and flexibility. It's really more about tied to a certain value and keeping things the same. Because all you want to do is just to get there and sustain that. Nothing wrong with that. In fact, Brian Clark from the Unemployable podcast, a fantastic podcast by the way, you should definitely check it out. Brian Clark was a founder of Copyblogger Media and he's since left that business. They have sold their WordPress company, StudioPress and he's started just a wonderful podcast called Unemployable. And he has been really promoting this concept which I love the term, he calls it seven figure small. The whole idea is that we're living at a time where you can actually create a high income business while staying really, really small. In most cases, either just you or you. Usually the case is you and a group of subcontractors which work on a very part time basis. It's a distributed team, virtual team, and we've never been able to do that until very, very recently. Now one thing I want to clarify because when people hear that term, at least in my community, seven figures. Seven figures small. The way I interpret it, Brian might disagree a little bit, but I think he would agree is seven figure small. When we're talking seven figures, this is really more of a concept, not a strict model. So the idea is not necessarily to get to seven figures meaning a million dollars or more per year in revenue. This is really more of a vision and an ideal to strive for for a lot of people. Gosh, getting to 3, 4, $500,000 a year in revenue and keeping things really, really small and simple. That to me is a seven figure small business. The whole Idea is the leverage is the idea that it's high revenue but small cost. Okay? And again, it's never been easier to start and run that kind of lifestyle business. That's really what it is. 7 figure small is a lifestyle business. And for a lot of us, the thought of adding more complexity, the thought of growing for the sake of growth is not very attractive. I think if you're not really sure, if you're kind of on the fence, I want to maybe offer you a series of factors and see how many of these resonate with you, because that might make the decision a little bit easier. Sometimes it's just you kind of know inside which way you feel compelled to go at your core. But societal pressures, the I shoulds out there could be getting in your way and of your true intention. So let me read some of these to you and see if some of these resonate. Maybe you value the flexibility more than anything else. You know, I know I've talked to a lot of writers over the years. The biggest reason they went out on their own and have stayed self employed is that flexibility in their schedule. For whatever reason. You know, maybe they want to travel, maybe they have young children, maybe they want to spend more time with their parents, family, friends, whatever it might be. They want to be able to kind of visit their kids and grandkids all over the country and be able to work and have that portable business that enables them to do that. Okay? So the flexibility is kind of the biggest thing that they care about more than the income, people who are not after a seven figure income. So you're not necessarily looking to create a business that provides you that kind of income level. Maybe you recognize that you don't have the temperament for that kind of business. You're not that entrepreneurial or you're not entrepreneurial at all. The thought of creating something bigger than you is not attractive. And mainly because you just know yourself well and you know you don't have the temperament to be able to create and grow and manage that kind of business. This kind of business. Look, there's no doubt about it. If you were to grow, it often comes with longer hours and more work, more stress. And maybe you feel like the thought of that makes you cringe and you know right away as you think about that, that's not what you want. Maybe you don't really want more complexity and those kinds of headaches that you know would come from scaling your operation. Now look, I should say that every business and every business model is going to have its own set of headaches. Okay, so I've never believed in this idea of, oh, you know, if I went in this direction, that's going to have headaches. Look, you have headaches now. Everyone has headaches. Every business has challenges. But maybe it's a trade off thing. You're not willing to trade off your current headaches for this new set of headaches. You prefer to keep the headaches you have now because that other kind is not that they're bigger headaches, it's is that they're the kind of headaches you just can't handle. You're willing to handle the ones you have now. You're okay with those, you know how to manage those. But there's some types of headaches that maybe you are just not attractive to you at all. Maybe you don't have the skill set needed. Notice earlier I said temperament. Now it's really more of. And I kind of mix that in. But strictly speaking, you maybe recognize you don't have the skill set necessary to scale your operation that way. Traditionally scale that operation. So here's an example. When you scale a writing or copywriting business, a creative business, many times you end up becoming more of a project manager. Because now you're managing people, you're managing projects, you're not doing all the work, the craft yourself, right? You also have to become a leader. Now you're leading a team, even if they're contractors and even if they're virtual contractors. That is a different skill set. Before you just have to manage yourself. Now you have to manage people. Now one thing that we have to be careful about is when you listen to these factors, be honest with yourself because fear can definitely be a self limiting factor. Fear might be getting in your way. So you have to be careful and make sure that some of these factors that they're not sounding, they resonate with you and you say, yeah, that's me. You got to make sure that that's not fear talking. Okay, so let's talk about the skill set. Oh, I don't have that kind of temperament or I don't have those skills. Okay, well, is that fear talking or are you know that that's just not what you want? Because sometimes just because we don't feel we have the skill or the temperament, you know, those are things that could be developed. But there are some things that, you know, you might realize, yeah, I recognize that, but that's just not attractive to me at all. And you have to recognize how much fear is playing into that decision. Maybe you know yourself too well, I'll give you an example, personal example. That's me. I know that if I were to scale my operation beyond where I am now, considerably beyond where I am right now, I know that I would fall prey to my workaholic tendencies and I could end up working way, way too much. I tend to get really focused and dedicated in my work and I just know myself and I have to be really, really careful. And if I were to pursue something really ambitious, it could take me down the wrong path, okay? Because I know that I would end up working ridiculous hours or potentially work ridiculous hours. Then another one would be that something else to consider. Another factor here is that, look, revenue is not the same of profit, okay? So when you grow beyond a business of one, your profit doesn't grow proportionally as it did before. Let's say you were able to get to $150,000 a year on your own and you've been capped out for a while. I mean, you just maxed out in terms of your capacity. You're thinking about growing your business. Once you start bringing people in and you start scaling your business in your capacity, your work capacity, doubling that to $300,000 a year is not going to mean another $150,000 in your pocket. Okay? You're going to have now cost. So the net that's going to come out of that, your profit is going to be less than $150,000. And you need to recognize that key factor that if you were to scale, it's not doubling in size in terms of revenue is not going to mean doubling in profit. You're going to start getting diminishing returns. So it's just one more factor to consider. Now I would say, look, if a few of these factors resonate with you, if you're nodding your head, if you were nodding your head as I call them out, scaling might not be the right path for you. Okay? But the good thing, the good news here is that there's no right or wrong. You create your own rules. Again, I want to make sure that if you've been thinking about this, if it's something that you know people have told you you should do, you don't necessarily need to follow the script you've been given. You don't necessarily need to follow the advice that well meaning people have given you. I've had many well meaning relatives and good friends warn me about the dangers of a solo business, meaning a business where you only earn when you work. And I say well meaning because I know where they're coming from. And these people knew what they were talking about. But these people grew up, are working an industry or in an environment where that was always true. For instance, dentists. There's the old saying, unless you're drilling and filling, you are not billing. And that mantra is one that's been true for many professional services individuals. People who provide professional services such as accountants, lawyers, dentists, etc. Unless they scaled, if they scaled, then it was very different. But solo operations have always, until a few years ago, been held back by those constraints. That's no longer the case. You know, one of the things that I work with my coaching clients on my more established higher income clients is before we go full on scaling traditional scaling, I have this concept called scaling light. And essentially what we do is we work on a few ideas and strategies that enables them, my clients, that is enables them to maximize their internal hourly income or hourly rate. Now I never recommend that you quote work by the hour, but our internal hourly earnings is a really good metric to track and follow because let's just say you're averaging $125 an hour based on all this work you're doing and the time you're putting into it. If you can double that to $250 an hour by changing some of your strategies, by changing your model a little bit, by changing some of the things you do without adding more complexity, without adding new people, without hiring a writer, then you know what, you've just created a lot more income for yourself without having to get into that level of complexity. So scaling light is definitely an option. And essentially what you're doing there is you are implementing strategies that enable you to earn more in less time or at least earn more in the same amount of time. Lots of different ways to do that. Not going to get into them here, but that should certainly for most people be the first thing they consider is. All right, let me think about before I start adding that kind of complexity, what can I do to maximize what I earn for every unit of effort or time that I put into my business? Okay. Another thing to consider is that you can again, you make your own rules. You could do a blend and not necessarily scale into a traditional agency model. So for instance, you could bring in other people and resources as it makes sense and as needed and maybe you limit that to on a case by case basis for your best clients only. I'll give you an example. So I brought in for one of my clients years ago, a cold calling specialist. So we'll give you all the background but this company wasn't interested in bringing that function in house with a full time employee. I was doing some lead generation copywriting work for them and they wanted to know if I could help supplement that with somebody who could cold call. Now, I almost said no because I assumed when they asked that they were talking about me and that's not what I was doing. I was doing writing and copywriting work. I wasn't interested in cold calling for any client for any amount of money. However, I remembered that I had someone, a colleague of mine who had recently started a cold calling business in the high tech industry. This was a software company that approached me and anyway, I reached out to him and I said, here's what I got. I got this opportunity. I don't know a lot yet, but before I get back to them, is this something you might be interested in? He said, absolutely. Long story. I was able to bring him in through my business have. Of course he did all the work in terms of providing that service. He cold called prospects for my client, representing them, working through my company. And my net profit on that was $3,000 a month. I created a retainer agreement, $3,000 a month. He made great money, I made great money. My client got great results. They got what they needed and it was guaranteed income. I think we had a contract that was six months and we did it for 18 months. They renewed three different times. So that was not what I set out to do. But this was a situation where my time investment every week was about two hours a week, if that, just doing a little bit of tracking calls. And that went down eventually to about two to three hours a month of my time required. I was able to really leverage myself, my business, my brand, my reputation without having to add more complexity to the business. So be on the lookout for opportunities like that where maybe you don't set out to do that, but because you're paying attention, you know that there might be an opportunity here to add more income for very little added complexity, time, energy, stress and effort. Something else you could do is you could create one or more additional income streams in the way of information products, some consulting, maybe in a different industry, or even productized consulting. Productized consulting really falls into the info product category. Think of it as a course or some sort of advice or education that you provide in a kind of packaged product. There's different flavors of that. But the point here is you might find some opportunities where you can create these additional income streams that enable you to generate revenue without necessarily investing the time to earn that revenue that you would have to do in your core writing business. Okay, so think of things you could do to be able to basically leverage and squeeze value out of the knowledge, insights, and experience you already have and essentially be able to sell that without you having to do the necessary work that you would have to do to generate that same level of income in your writing business. Here's another idea, and at first this might sound a little bit offbeat because it doesn't seem to fit some of the other ideas that I've shared with you so far. But you can decide to strategically live beneath your means so you can make better decisions and have a more flexible lifestyle. So, for example, let's say that you're earning about $150,000 a year, but you make a conscious decision and effort to live on $100,000 a year and then build a buffer. You're adding to your buffer $50,000 a year that you continue to add to, but then you're drawing from once or twice a year because you are taking longer stretches of time off that you carefully pre plan way ahead of time. So the idea here is, when you make $150,000 a year, but you live on the $150,000 a year, you have no margin. You have no financial margin or wiggle room in your business or in your life. But if you make that margin, if you're living, like I said, On 100,000 but making 150, you can decide to take a month off every July, for instance, and travel. Or you can decide to, you know, it doesn't have to be travel. You can decide to do something different, or you could decide to basically use that difference, that buffer you're building to help you ride some of the slower periods of your business and then not have to stress out about that or have to make poor decisions. Okay? So that is another great way that you can maintain that lifestyle business that you've decided to create and sustain without having to add complexity to your life or to your business. And here's one last thought. You don't have to scale in this business. Maybe you'll decide to keep it the same way it is. It's simple business of one, but it's going to be in a future business or a very different iteration of your current business that you are running today, where you'll decide to go ahead and scale in a more traditional way or blended way like I've described here. Okay, I know for me, you know, I decided a couple years ago to scale my operation significantly. It was actually more than a couple years ago, built a team, and it's been fun. But lately I've been kind of reconsidering the wisdom of that, and I've made some decisions to kind of cut that down a little bit, make it simpler, because once I did it, I realized, you know what? This is not necessarily what I want to do. And I've had to kind of rethink some elements of my business. And at first I thought, oh, man, I failed. I thought this is what I wanted, and now I'm not really enjoying some aspects of it. And I failed in that regard. And what I've come to realize is I didn't fail at all. I tried something, it didn't work exactly how I thought it would work. Some things work, some things didn't. And now I have the clarity and the knowledge I need to, you know, kind of come up with my next step and the next iteration of this model. So the other thing that gave me some assurance is that I know that this is not the thing that I'm going to be doing forever, or at least not in this way. I know. And now I see that at some point I will probably scale my business, maybe significantly, but it might be a very different type of business. It might be a very different iteration of my current business. And now I don't have this anxiety that, you know, I'm missing out on something, right? That FOMO fear of missing out. If I'm not doing it now, you know, when will I do it? It doesn't matter. I no longer worry about that. You know, bottom line here is don't fall into the trap of comparing yourself to others and thinking that in order to have a real business, and I say real with air quotes, you have to scale into a small agency. This is no longer a binary situation, a binary decision where you have to choose between A or B. We're living in the best era of humanity. I really believe that we have choices and options now that no one has ever had before. And I think this is an amazing opportunity for us to really get creative and make decisions that our parents and grandparents could have never made. I think it all starts by getting clear on your values, on your big why, why you're doing what you're doing. What do you really value? What's truly important to you, Prioritizing those values and then crafting a business that enables you to live well today, doing work you love for people you love, working with, all while continually looking ahead a little bit and positioning yourself well for other opportunities down the line. And remember, you make the rules. You get to decide what's best for you and for your family. So be intentional and above all, have fun in your journey. That's what it's all about. This has been Ed Gambia. I hope you have a wonderful rest of the day. Take care. The High Income Business Writing Podcast is a production of B to B business launcher. Learn more at b2b launcher.com.