Should I grow or scale back? Ask Evan

Hi, I'm Evan Carmichael. Welcome to another edition of #AskEvan. Today we're going to continue on with our challenge series as we look at helping entrepreneurs with specific questions they have to grow their business. And I'm going to answer a question from one of our Facebook viewers named Mark Drager who wrote in on the TELUS Talks Business Facebook page. And he wrote a question for Evan: If you feel you're at a place in your business where you have to grow revenue to increase profitability, or scale back and stay smaller to increase profitability, how would you recommend proceeding? So thanks, Mark, for the great question. Here are 3 suggestions that I have to help you. Number 1: Are you a builder or an operator? As entrepreneurs, we tend to always want more. We set goals, and when we reach them, we set bigger goals, and then even bigger goals. Most entrepreneurs are builders. We get excited about building companies, having a bigger impact, and continuing to grow. The builder would say, "Grow revenues, Marc." Some entrepreneurs are better operators, though. The growth doesn't excite them as much as continual improvement. They look for ways to keep doing what they're doing but make it better each time. Profitability becomes easier as you create your systems and refine your processes. You might still grow your revenue numbers, but it's not the main goal of the business. The operator would say, "Improve profitability, Marc." There's no right or wrong answer here. It just depends on the type of entrepreneur you are and where you get your energy from. Number 2: What's your ceiling? Another way to look at it is to try to understand what your ceiling is. Most entrepreneurs can only grow a business to a certain size and then they plateau. They just don't have the interest, skills, or passion to build beyond. When I was in the venture capital world, we always looked at the founders of the companies that came to us and tried to figure out what their ceilings were. Is this someone who can build a company to $100 million and take it public, or are they gonna have to be replaced somewhere along the line? Some entrepreneurs are great at startups. They know how to bootstrap and turn nothing into something. They thrive on it, and the lack of resources and having a small team push them to succeed. But once they get to a certain amount of comfort, they stop trying as hard. The business also gets boring for them. And they have a crisis of confidence. Sometimes the best solution for these entrepreneurs is to sell the business and start all over again. Other entrepreneurs are better builders. They hate the startup mode but love taking companies and building them up. They might come into a company that's been hovering around the million-dollar revenue mark for a few years and turn it into a $25 million company. They love that kind of challenge, and then once they hit their ceiling, they get bored again because it becomes more about managing the company instead of high-speed growth. Time to cash in and find the next company to grow with. The general advice here is to work in the type of environment that best suits your personality. You'll have a lot more success, and you'll also have more fun. Number 3: Live a day in the life. If the question is to grow revenues to new heights or scale back and become more profitable, then it might help you to see what life looks like in both scenarios before you make a decision. You should already know what the scaled-back, more profitable version of your business is. You've lived through it, so you know how big your team will be, how much work-life balance you'll have, and the type of work you'll be doing and not doing. It's the bigger version of your business that is both exciting and scary. An easy way to learn more about what that kind of life looks like without having to go out and build it is to find an entrepreneur who's living that life and ask to spend some time with them. For example, if you're a million-dollar business and you want to get to 5 or 10 million, what does that business look like? Find someone either in your industry or in a related industry who's running that kind of business and see what their day-to-day life looks like. If there's nobody in your local market, look to a different geographic area, even a different country if you have to. Most entrepreneurs are willing to help out other entrepreneurs if they see that you're genuine about learning and there's no direct threat to their business. See if you can shadow them for a day, or at least get a tour of their offices and ask a few questions. Ask about the entrepreneur's lifestyle and his or her goals. Do you get excited? Do you want to be like this person? Or does it seem like too much work and stress? Again, there's no right answer, but going to live a day in the life of someone who's already done what you want to do will hopefully make the decision easier to make. Thank you for watching. If you enjoyed the video and you want to see more, please give it a thumbs up below. I always love seeing those come in. And if you have a comment about this post, or if you want us to answer a question for you about your business, feel free to leave it in the comment section below. I always read those and love seeing them come in. So thank you, and we'll see you on the next episode.