7 Factors to Scale a Business with Trey Dunavant
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"Some of the most successful businesses I've seen have scaled because they hired salespeople better than the founder."
— Trey Dunavant
Find Your Buyer
- Understand your product's daily life, values, and impact on the target buyer.
- Tailor communication to their unique needs and motivations.
- Identify factors like efficiency that resonate with customers.
- Establish the Ideal Customer Profile (ICP) for precise targeting.
Amplify Your Brand
- Align all business aspects with the ICP for consistent messaging.
- Focus on brand design, messaging, and communication channels.
- Avoid directly jumping to product adjustments without brand alignment.
Create New Revenue
- Diversify product offerings to cater to different customer needs.
- Design services at various levels to capture a wider customer base.
- Focus on both existing and potential customers for revenue growth.
Team Alignment
- Achieve clarity on team goals and directions.
- Enhance collaboration and accessibility in leadership.
- Invest in off-site strategic planning for alignment and avoiding silos.
Operationalize Your Sales
- Implement a comprehensive sales methodology and technology stack.
- Focus on structured talent management for new hires.
- Plan carefully for scalability and effective team integration.
** When Should A CEO Step Back **
- Step back from sales roles to prevent growth bottlenecks.
- Recognize when hired salespeople might surpass the founder's abilities.
- Shift focus to vision, leadership, and team alignment.
Repeat Your Sales Motions
- Develop a standardized, end-to-end sales process.
- Cover all aspects from marketing to customer conversion.
- Ensure consistency and efficiency in client handling.
Scaling Through Investment
- Strategically reinvest profits for high ROI.
- Assess risk tolerance and adjust investment strategies accordingly.
- Commit to investment plans for focused growth and execution.
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Welcome to another episode of the better leadership team show. Let's dive right in. Today we've got a great guest. Well, we always have great. I'm never going to say today I'm not that excited about our guest, but I am really excited about our guest. We met, I guess it was a couple months ago now, but, Trey Donovan has over 15 years of experience helping to scale B2B B2C and e-commerce companies.
Through multiple leadership roles, he expanded a nationwide specialty products, business division from sub five figures to mid eight figures, sub five to mid eight figures through the most challenging season of its 60 plus year existence. Companies like Hyatt, Cisco, Starbucks, and the Lakers are just some of the noteworthy opportunities he's been a part of implementing leadership, productivity, and growth strategies that deliver impact while creating a culture that allowed them to simultaneously lead healthy, sustainable lives. As I said, I met Trey a couple months ago. We sat down and had a chance to talk at this event. And he told me about his company and his scalability score assessment. And man, I just said, I need to know more about that.
Because to me, that's got to be the main job of a leadership team. So Trey, real glad to have you. Welcome.
Thank you so much. After that introduction, it's all going to be downhill from here. So.
Yeah sorry guys, you can tune out now. It's not, it's going to be very good. And, by the way, if you happen to hear any throat clearing or coughing as of the recording of this, I'm getting over COVID. Don't feel bad for me. I feel great, but you can hear my voice is probably even deeper and sexier than it normally is.
That's right. got rasp.
Yeah, I've got more of a radio voice today.
Yeah.
So, so hey Trey, we've got a tradition on the show. That's all of two episodes so far. So you're the third one, but it is a tradition. It is, I always want like to start out with a really important question, which is what do you believe is the one most important characteristic of a leadership, of a great leadership team?
Yeah.
I think what comes to my mind is alignment. And it needs to be alignment around a vision. So, right, if we're going to be aligned to something, there has to be a prerequisite of some type of vision, some type of North Star, some type of, you know, center place that we're all looking at. But I think the alignment to that is what I have found to really drive great leadership teams.
They can be very diverse. They can be very different leadership styles within an executive team or leadership team, but man, when you're centered on the same vision and you're aligned and committed to making that vision work. It sure makes things a lot easier and a lot more effective.
Love that answer. And Trey, I don't know if you find this, but when I work with leadership teams and I do these, you know, two day quarterly planning, and I just did a two day kickoff with a new client, the CEOs
90 percent of the time believe they have alignment. If you talk to the CEO, they're like, well, yeah, I've got a vision and everybody knows that vision, but when I get that leadership team together, I come to find out either the vision is not really clear at all, or the vision is very clear in the CEO's mind, but not real clear to anybody else.
It hasn't translated.
Yeah, so I love that. And then it's so important to make sure everybody's marching in the same direction.
So why the focus, you know, Trey, when we talk that word scaling comes up all the, you know, from the first 30 seconds of us talking, that word is used. And I love that word.
Why the focus on scaling for you? Why did you take that direction in your career and in your business?
Yeah. I think, you know, I've always been in some former fashion related to the growth elements of any business, right? Sales, marketing, whatever those drivers are, internal operations and efficiencies are included in that. But. It's always been about growth and I think growth is good, right? Growth is forward momentum.
Scale is almost like, man, can we outpace the average in our industry or channel or particular vertical? Can we outpace the average and do so while making it healthy and sustainable? Right? Because I think that is the challenge. And so if I were to kind of just put a few words around what I believe scale is, it's not necessarily unicorn hyper scale.
It can be just outpacing our industry or average growth rate and doing so while keeping all the wheels on the bus, again, keeping things intact as we do that. Right? So it's not a leaps forward to slide back and restart or reset, which I think happens too often. Right? When some people think scale, they're just like
juice this thing at all costs, right? We're just gonna push as hard as we possibly can. Well, that's not sustainable and nor is it typically healthy long term. And so what I'm interested in is, hey, let's outpace the average, but let's do so in a healthy, sustainable way.
I love that because you're right when that word scale is used a lot to just replace the word growth.
Yeah.
And I like what you're adding to the conversation there is it's not just growth, it's outpacing the competition and I assume you mean top and bottom line
Yes.
Outpacing the competition and doing it in a healthy, sustainable way.
Right.
I love that.
And although it sounds like a, like a duh kind of question, but why is that outpacing of the average, outpacing of the competition. Why is that important? Other than, yeah, as an owner, you're going to put more money in your pocket. Okay, got it. Put that aside. Why is it important to outpace the competition?
Well, I think we're always looking for some type of hack right. Is there a way to scale this quicker than just doing more of the same? Cause I feel like a lot of times when we look across businesses, it can be, man, if I can just do more of the same thing, my competitors doing, I'm going to win. Right. I'm going to outpace by just simply upping the output.
That isn't what we're after either. Right and we talk about this in creation of new revenue, but like when we create new revenue. There's one way to grow and that's pack more people into the same exact product or service we're offering. There's also a way to grow to say what other products or services could we offer to not only differentiate, but add more value to our clients and therefore again, drive growth that's higher than our industry standard or our particular
Vertical or channel standard.
And so it's not only about growth, it's about growth that is paced higher because we've been more innovative. We've been more strategic and so therefore we get better results. And really the goal with scaling is to do more results, get better results and do it with less output.
It's not about doing more. It's like, what can we actually refine? What can we cut in order to be more revenue and more profit efficient?
I love that. And you know, the healthy and sustainable piece of it.
One of the conversations I have with my clients all the time that all want to grow or they're not working with a coach is the importance of that growth and the importance of outpacing the competition, I think, drives the healthy, sustainable environment.
Now, you can't have one without the other. You could grow in an unhealthy way. I don't think it's going to be sustainable.
Right.
But you do that.
But I think part of what outpacing the competition does is it allows you to attract great people if you've got that growth, which means more opportunity.
Yup.
It allows you to retain the folks you've got because you're giving them opportunities, you can pay them more.
Yeah. That's very true. Typically the businesses that are scaling in a healthy, sustainable way do become a beacon in their space, right? Other people notice that you can even acquire top talent from competitors and others in your industry simply because they realize, man, something that they're doing is working like that excites me, their vision, their place in the world.
Like that's more exciting than where I'm at. I can take all my talents and abilities I currently have. And go hook to that wagon and really go a lot faster, a lot further. So absolutely you typically become a beacon in your space when you're doing it right.
Yeah. And also, if you're outpacing the competition to me, what that means is you're adding more value, you're impacting society and society. You define what society means for your company, but you're having more impact. So I love that. What have you seen is the number one, most important obstacle to scaling.
This one's probably going to come a little bit out of left field for some listening, but I believe that one of the critical elements of scaling is actually knowing your buyer better than your competitors do really defining who you serve and how you serve them. In other words, it's this idea of going deep and not wide.
I think we live in a world where we can get more eyeballs. We can get more ears. We can get more attention through marketing or whatever efforts we can drive more engagement. Is it with the right person though? And so what I always come to is, you know, you can sit with businesses that have raised over 100 million dollars in capital. Who still don't have an ICP nailed, right?
An ideal customer profile nailed down. You can also have a business who's grown well over decades, 15, 20 plus years through more or less reactive growth, right? Here's the product or service we offer. Again, we're going to go find as many people as we can that want this. And we're going to ask them to tell their friends about it.
And this thing is just going to grow by simply serving our clients well, asking them to pass the word along and moving forward that way. There's a better way. There's a more effective and efficient way. And that is, let's understand our buyer better than anyone in our industry. Let's understand not only demographically who they are, but psychographically, right?
What is the psychology behind the buyer that we're serving? What's important to them? What are their goals and aspirations? What are their challenges? How do they describe their challenges? What keeps them up at night? What fuels them or inspires them? When we can start to unpack. Those elements, all of a sudden we can speak to them better than the next person. And guess what? Again, we're going to scale.
I love that. And we're about to get into, Trey, your seven factors of scaling. And I know this is the first one but let's dive into this first one a little bit and then we'll kind of cover them all at a high level
Sounds great.
And dive in where we want because I love this idea of, you know, finding that buyer and creating them as a real avatar, a real person
Mm hmm.
And sharing a quick story on my end is I was actually on a service project God, I guess it was about six, seven years ago in Uganda, where I actually went with a Christian church group, little Jew boy with it, with a Christian church group, going to Uganda to help very young entrepreneurs in Uganda start businesses and we did a little shark
Wow.
Thing and we helped them
So cool.
Business planning. It was unbelievable and i'm working with this guy you know super smart was trying to start a business making and distributing charcoal briquettes.
Okay.
So I said to him who's your core customer? And he said, families in Kampala, Kampala is the capital of Uganda where we were, families in Kampala.
And like you probably would have reacted, I'm like, we need more than that. That's not enough.
Yup.
Tell me more about these families in Uganda. And he was struggling and just out of nowhere, an idea hit me. And I said, close your eyes. I said, I want you to picture your best customer or who you want your best customer to be.
Picture that person in your head. He said, well, it's a lot of people. I said, I get it. Picture one best person in your head. So he did. I said, you got a picture. Yeah. I said, is it a man or a woman? He said, well, I want to sell it. Both men and women. I said, stop, who are you picturing a man or a woman?
(Thats right.)
He said, a woman. I said, let's give her a name. What's her name? He said, Susan. And then I hit on the magic question. I said, tell me more about Susan. And all of a sudden he went into a biography of Susan. Susan is 34 years old. She's got three kids. Her husband died of AIDS five years ago. So she gets her sister's help to take care of the kids.
And her sister has to take the kids to school. And while the kids are at school, she sells chicken on the side of the road. And that's what she needs the charcoal briquettes for. And it's really important to her that she gets home in time for the kids and she could, you know, be there when the kids leave, you know, when her sister takes a, you know, and all this stuff started coming up about Susan and what kept her up at night and what was important to her and what her passions were.
And, that's what, sometimes that I'm interested if you do the same thing, if you, I find giving that person a name,
Yeah.
Tell me more about that because we don't sell to companies, right? We sell to people.
Right. Yeah, it's absolutely important that we identify who that is. And to your point, yeah, what's the day in the life look like for that individual, right? What is important about what we do as a product or service that impacts that person? How did they come to know us? What's the introduction process?
How did they become aware of who we are? And then how did we speak into that in such a way that, again, for Susan, maybe it was efficiency, right? Maybe it's I can take X amount of briquettes. It's a lighter load. I can get it to the corner of the street where I sell these products and it's really efficient.
I can burn these four briquettes all day long, you know, whatever it is for her, but there's a reason that it makes sense and understanding what that is. Attitudes, behaviors, aspirations, all those things come into play because it is a race to who can know them better. And then we can start as, because there's a difference between a product market fit, right?
And truly having an ICP. Product market fit is, is the world at large interested in what I have that could be at a local level that could be at a town or city level that could be at state, whatever it is, you're going to start with something. Then you're going to realize, yeah, people want this. There is absolutely a product market fit.
Then we have to understand, okay, who does this impact the most? Who gets the most value from what I'm offering the quickest. Let's start to unpack some of those things and then we can narrow down from, yeah, anyone who burns a fire needs my briquettes down to, no, it's actually Susan, who is the ultimate buyer of my product.
Yeah. And then Susan's going to tell other people like Susan.
Correct.
And then that marketing's a whole lot cheaper that way. So.
Well intrestingly.
Yeah.
Oh, sorry. Interestingly, again, it's not know your buyer, it's find your buyer. There's a difference, right? We have to know them, but ultimately it's not just to know them better. It's because we need to go find more of them. If we are going to scale, we need a lot more Susans than one.
And so it's like, man, the better we can know Susan, the more we can then change it up and say, okay, where are the other Susans at? Where do they spend their time? Who are they talking to? Who's influencing them? How can I get in the space to be able to find more and more Susans? That's the whole point. And so, yes, it's know your buyer, but it's actually because we want to find our buyer.
You know, we need to find more of them to scale.
Yeah. And just to be clear, that's not just a B to C, B to B is finding your buyer. It's not find the company.
A thousand percent.
Find the industry. It's find the actual buyer, there's a real person on the other side of the table of the other side of the zoom call. There's a real person. They're not a company making the decision.
Thats right. Yeah. And they have legitimate pains and challenges that they're probably trying to overcome that your product or service could help with. Or, there's a desired destination that they're just struggling to get to, right? So, it's either a pain or you know, a dream state that they're not able to reach without your help. So.
And do most companies you work with have one ideal customer profile. It's Susan who needs the charcoal briquettes, is it one or might they have a few different avatars or a few different ICPs?
Certainly depends on the business but yes, you can have multiple. I think you do reach a point where it's like, okay, we can only chase so many rabbits here, to use an analogy, but ultimately, yeah, you can have a few. You can have up to three, I think, and still be really effective because again, Susan's, the Susan analogy there's going to be some differentiators between different Susans, but you can still have that one ICP. So.
Excellent. All right. So now let's dive in to what you call your seven factors of scaling. Take us through the seven and we've already hit the first one and dove in, but take us through at a high level what the seven are, and then we'll we'll dive in where it makes sense.
Okay. Yeah. So the name of our business is scale factor. We use factors as an acronym just to make things easy. So we did hit the first one there. Find your buyer. A is amplify your brand. The third one C is create new revenue. The fourth one is Team alignment. Fifth is Operationalize your sales.
Sixth is Repeat the sales motion. And then we wrap up with Scale through an investment strategy. So F A C T O R S it just keeps it easy to remember in that order.
Excellent for an old guy like me I need ways to remember things. And do these happen kind of in first do F then do A then do C or they, is it iterative do they all happen at the same time, how does it work?
You know, so yes, find your buyer is our north star, right? Everything from our business, our products, our service, the way we structure ourselves, how we grow and scale all centers around our ICP so find your buyer has to be our north star. However, I have entered relationships with business owners or businesses, organizations who say we need to start with operationalize your sales.
We need to fix that, right? It's very, very broken. We may do something like that first and then work back to number one. If I had my preference right in a perfect world, start with your buyer, start with find your buyer. And then from there, you can work your way through the whole process.
Got it. But I imagine something like team alignment is something you're probably always working on, right?
Absolutely yeah. And there's things that definitely roll kind of in the background all the time. Repeat your sales motion. Again, a lot of times we're working with a business, let's say, who's maybe between 500,000 dollars in revenue up to a million and a half, let's say, well, they may be at a point where one of the biggest challenges they have is that owner founder
is still part of the sales process, right? When it comes to the sales motion, they are still touching just nearly everything. Well, sometimes we have to relieve that right before you can even build capacity to look at some of these other factors. We have to, you know, resolve that first. And so, yeah, I would say in a perfect world again.
Go from F all the way through to S. But, some of those are going to run in the background all the time. To your point, the team alignment, even the operationalize your sales, that's going to shift and change over time.
Got it. So let's go one at a time and dig a little deeper. We've already started digging on finding your buyer. So tell us about the second one, amplify your brand. What does that mean?
Yeah. So really it's this idea that again, once we've identified we'll keep using the analogy Susan, and we know who she is and what she's about and what drives her, what motivates her, what her pains and challenges are then we can say, okay, does every part of how we show up in front of Susan
speak to that everything. I mean, we look at anything from a logo, a brand, colors. Like, what is our identity? What is our brand story? Our messaging? What outlets do we use to communicate with? Who do we align with from affiliate or an advocate situation? Right? All these things need to be geared directly to our avatar or our ICP
and so we take a full swath look at branded amplification because you know, we can have our ICP nailed. And I see this often. Somebody says, you know what? We're gonna invest. We're gonna do the hard work to find out who our buyers are. And they do that through investment of time, resources, energy.
They go and they take the time to do that. But then it's sort of like they hop straight from there sometimes to products. Oh, actually, we need to shift some of the products we're offering or we need to change some of the services and they skip a critical integral part. If we are going to find more of our buyers, we've got to start with does our brand at every level again speak to this from a design, from a copy, from a way we communicate all the things I listed there.
Those are really, really important when it comes to amplifying our brand to the right people.
And how do you define the difference between brand and marketing? Are those synonymous or should we look at them in two different ways?
They're different. You know, your brand is again, your brand identity, your brand story, I think are very key, right? Who you are, how you show up in the market, how you present yourself, how you speak about what you do, the stories you use, the validification, right? If it's data, right? Some companies that are very data driven use that.
Some use stories, right? This is how I help someone else just like you. Whatever those are that could be our brand. Then there's the visual part of our brand, which is, you know, literally visual assets, graphic design, colors, you know, the way it's presented in that way. Then there's copy, you know, the actual way we speak again, are we actually using the same language that our buyers use?
Or are we trying to say the same thing, but we're not using the same words. And so therefore it's just missing, right? It's we solve the exact problem that they're looking for. They're looking for a solution. We solve the problem. And yet, if we don't say it in the right way or communicate in the right way, guess what?
It's going right over their head, right? We're not going to make that connection.
So, the connection I just made is find your buyer is it's about who's buying what you've got, of course, you've got to write the name and then the amplify your brand is like, say, okay, now that we know the buyer, we have to make sure we're communicating who we are to buyer in a way that they're going to resonate with.
So, those two fit together great. Take us to number three, create new revenue. What does that mean?
This is a fun one. I love this one personally. Create new revenue is all about okay, let's look at our existing product or service matrix, right? Hey, we have X amount of products or services. Typically, I'm just going to kind of start to real ballpark and broad brush things, but typically we'll have up to 80 percent of our client base
working with us in a in a singular way, a particular product or particular service we offer, and it's a lot of our clients that use that well, a lot of people when they think growth and scale, especially right? If we're going to scale, what do we need to do? I think the first thing that most people think about is, well, we need to get more buyers to buy this particular product or service.
Well, I like to use an analogy of think of like a five star property, a really nice J. W. Marriott or, you know four seasons, whatever comes to your mind in a major city or metroplex. Think about that and the way those are structured because we use this as an analogy when we talk about creating new revenue, you've got a lobby level, a very base level of that.
Well, what does a lobby in a property like that offer? It offers typically free wifi, AC right on a hot day, maybe has a coffee bar. Maybe if you're lucky, you get a free cookie or some kind of, you know, food out of it, it has restrooms. It's a great spot to meet a friend if you literally just need to step in somewhere, quiet the noise, get some AC, have a conversation, right?
New York City, it's August, that's where you're going to go. You also go there probably because you know the brand. You're like, I know the way this feels. I know it's gonna look a certain way. It's gonna give. I mean, again, if you want to present yourself in a certain way for a particular meeting, you're gonna select your choice based on that, right?
Well, in our business, it's the same way. We need to have lobby level things that we offer to the general public that are completely free. But then we also have to be strategic as we go up this analogy here that you have the right products or matrix in place because here's what happens. Go up those floors.
The mezzanine is the next floor. Maybe you're offering more value and you're getting something in return. Think of first, last name, email and phone number. For a particular downloadable or PDF or webinar or whatever it is, right? You're offering more value, but you're asking for something small in return.
That could be a mezzanine offer, but think about a standard floor offer using the same analogy, you know, maybe 80 percent of that property is standard floor. Maybe it's not quite that much. Maybe it's more like 60 or 70%. But there's a large majority of that property that's built for standard rooms that you know, anyone has access to.
Well, when you think about a business in the same way, you can think, well, if we're going to scale, we just have to be able to pack more and more people in there. That's not going to scale, right? That's not going to work. You have a set amount of real estate. You have capacity. So packing more into a standard floor is not always the best option.
And most businesses stop there. That's as far as kind of their thinking goes.
But if we think about what would it look like to introduce a club level, what would it look to introduce a product or a service that offers more value that it's not built for the masses, right? It's not built for every Susan to the ICP that we were talking about earlier.
It's built for only 10 percent of those. And what we've found is the math actually works. So over the 2000 plus businesses that we've engaged with, you've got 10 percent of your client base. That's at that standard offer that you have will pay, will invest 10 times what they are right now to get more value from you.
You've developed the trust, you've gained their trust, you've provided enough value for them to say, you know what, if this company had something that served me in a deeper way and they could offer me this and this as well in the same vein, I would pay 10 X for it. We found that of those 10 percent of those would pay 10 X, right?
So start running the numbers in your business, whatever your standard product or service is, think about charging 10 times that for a product or service. And if 10 percent of your client base, you serve 200, right? If 20 of those people were to pay you 10x, you can see all of a sudden revenue is driven way higher.
Your profit margin is way better, and you're not just serving more. So capacity becomes less of an issue.
And so this is the way we think, and I love, you know, working with businesses through this because most often, depending on how long a business has been around and what kind of, you know, engagement they have with their client base, our customers will tell us exactly what they need.
They'll tell us exactly what they want. They'll tell us what they would invest to have it. And they'll tell us how ready they are. Are you ready to do this now? Or is this something you have to wait for, right? In their life cycle or whatever it is. They'll tell us all that. So all we have to do is listen well, provide what they're asking for.
And do it in a way that we can again, get 10, 15, and maybe even 20 percent of our client base to do it. We are not looking to just take on, you know, mass amounts more. So it's really fun to go into a business and look at what could that be? What might that be? How can we structure that again? That's in a healthy, sustainable way to them.
We're not trying to diversify. And that's what I want to be really clear about. The after tier is not, we can do anything for anyone, or we can even take our ICP and say, Hey, we're here to solve all of your problems. No, it's not about casting a wider net. It's about drilling deeper.
I love that. And, you kind of alluded to this, but I want to put a sharper point on it is the best way to find out what those additional services are or products are for that 10 percent is it just in the grand scheme of doing business, make sure you're listening to what their other challenges are and what their other desires are and or is it appropriate to say, hey, let's get on the phone with our top X customers and ask
Absoloutly.
Them some questions and find out what's keeping them up at night. Do you recommend being proactive and making those calls to try to figure this out versus throwing darts and saying, I wonder if they'd like this. I wonder if they'd like this.
You have to absolutely. I think that should be part of every single business in their motion in their sales process should be time for legitimate questions around. How did we do? Certainly, right? We want to know how we did, how the customer's enjoying the current service. What else could we do? Where else are you still having pain or challenges in this vein, in this you know, area.
And so, yes, I think it should be a proactive thing. Absolutely proactive. And you can do it with modern technology. You can do it across so many fronts, right? You can do that via email survey. You can do that as a pop up on a website that they answer one question, right? But when you're doing that, times the masses, you get information that you want.
You can do it in conversations. You can absolutely do in proactive outreach. Hey, we care about you. You're one of our best clients, and I just want to hear from you. What could we be doing better? What are some other things that you're like, man, I just wish Trey did X because if he did X as well, that would take off so much of a headache off of my plate.
Right. It would free me up to fill in the blank. They're going to tell me because they already like your product and service. You've generated the trust. And so it's just a matter of asking the right questions.
Excellent. Excellent. All right, let's go down.
Number four of seven is team alignment.
Team alignment. You spend a lot of time in this space. I'm sure. And to your point earlier, it is always ongoing, right? Team alignment is never static. We never reach the summit, put down our gear, take in the view, right? If we do, it's moments in time and then it's all right, pick up the gear.
We're still moving, you know? And so we look at achievement, we look at accountability, and then we look at accessibility is kind of bullet points, right? When it comes to team alignment, but most importantly, it's like, do we have alignment around what we're trying to achieve. And I think your, you know, opening question to this podcast today was, what does it take to be a successful team?
There has to be a level of alignment around whatever achievement we are looking to do. And that's gonna be seasonal, that's gonna be annual, you know, different businesses work on different rhythms, but really having clarity around achievement, what are we trying to achieve? Because that, again, as a North star, everything will trickle down from there.
I think when it comes to accountability, do we have levels of accountability, you know, I think one thing that sometimes is hard for, especially small businesses as they grow is differentiating levels of accountability. You've got some leaders who are kind of original to the business. Maybe they're not founders, but they came in really early.
They have a huge sense of ownership in what happens and inevitably they take on and hold way more than they should. Versus saying we're at a time where we need another layer of leadership. You can't race too fast that way. I've seen that happen as well, right? We're a small business and all of a sudden we want six layers of leadership.
It's not effective nor efficient. That doesn't work. But there is that time and place where you go. We need to figure out what that next layer is, and then we need to push down accordingly. We need to delegate accordingly, but all of that is only possible through, again, that alignment to what we're trying to achieve.
And then accessibility. How do we connect and collaborate as a leadership team, right? What does that look like to truly be in sync? We can look at anything from the technologies we use to the rhythms and habits we uphold in a business. All of those things come into play. But when it comes to accessibility, we need to make sure we're in alignment.
We're in sync. We're lockstep together. And a lot of that is investment. A lot of that is taking the time to again say, okay, leaders, we're not working in the business today. We're gonna work on it. Right? Let's pause what we're doing instead of just looking at output.
Let's maybe go off site, you know, for even a couple of days and let's get clear. Let's get aligned. So that way when we come back in again, we're not working in silos.
Love it. I mean, you're, you're obviously preaching to the choir there and (we) we both probably seen, you know, man, not mom and pops. I've had clients I've started working with that may be 50, 60, 70 million dollar companies. So they're not fortune five hundreds, but they didn't start yesterday and let alone a team alignment.
They do not have a leadership team. Now the CEO has six, seven, eight direct reports they may call that the leadership team but just because the CEO has direct reports doesn't mean they're a team. It doesn't mean they're aligned. It doesn't mean they have some rhythm where they're getting together and planning and adjusting and fighting with each other when you need to.
Absolutely.
And so, love that. Let's go to number five, which I'm really interested in hearing about operationalize your sales. Tell us a (little) little about that.
And again, this is especially and hyper relevant, I think to small and midsize businesses who are scaling. But too many times we haven't figured out how to truly operationalize our sales. We have band aided, duct taped, kind of acquired a sales process over time, right? We've operationalized our sales to a degree, but I'm shocked at how many business, I worked with a business once who did over 215 million in revenue who still lacked a CRM, a legitimate CRM.
Sounds ridiculous, right? It sounds shocking, but you'd be amazed at some of these industries and verticals, how antiquated things can be. And so when we look at operationalizing sales, yes, we look at technology. Do we truly have the tech stack necessary to do the work that we're doing? But it's more than that, right?
It's not only what sales methodology are we using, right? How are we going to approach our sales process as a whole? Do we have the right technology? Do we have the right approach when it comes to people and talent management? If we were to hire. Do we have a process for bringing someone in that they could adopt again, our sales process and run with it?
Probably not right. This is where a lot of people get tripped up. Yeah, I could totally do that. They make that first hire and it absolutely kills them. Or maybe they make the 10th hire and it absolutely kills them because the early adopters came in, found their way quickly, took that ownership almost like a some people refer to them as like lone wolves, but they come into the sales team, they take complete ownership.
They're kind of entrepreneurs is what they essentially are. And I've seen businesses scale like that to where they have quite a robust sales team. But then we want to bring in someone to actually shape and mold them into your process. You don't have the necessary needs. So operationalize your sales.
It holds a lot of things in there, right? And you can take a lot of fragmented approaches to it. It's very customized to the business. Where are we at today? Let's first assess where we're at. And then let's look at what are the things that we can do that are again, going to drive the most scale quickest.
What are we going to get the best return on or the most juice for the squeeze?
What are the challenges that our clients run into typically the smaller mid market companies is the CEO entrepreneur is typically and logically the best salesperson, they know the product or service better than everybody else. They more than that, they live it.
They breathe it, they sleep it and it's their passion. So of course they're going to be the best salesperson. And by the way, there's nothing wrong with that. You're a 10 million dollar company and you're the CEO and you're still the lead salesperson. That's not necessarily wrong, but have you found,
is there a trigger moment in the maturity of a company where that CEO needs to start stepping back and somebody else needs to be the best sales person or a group of salespeople. When is that magic time? If there is one where the CEO needs to step back.
I always want to make this a race step back as soon as you possibly can because you will become a lid on the growth so quickly, whether you realize it, whether it's glaring or not, you will. And I agree the natural flow and progression of business maturity is that founder is the best salesperson because of all the things you mentioned.
It is who they are. It is their DNA. My challenge though, would be, it's very uncomfortable for them to say, what is it? Like, let me reach inside. Let me go inside and say, what is it in me that makes me so effective? That's hard. That's hard work. It's hard to put our finger on. I don't know. I just show up and you know, I just, you know, I relate to context and stories and clients we've served and I built this thing.
So I know the ins and outs of how it was built and the way we built it the way we built it. All those things are good, but they just come out of you naturally. And so it's really challenging. It feels like, you know, swimming upstream to say, what is it when someone brings up something in this vein, what story comes to my mind, what client comes to my mind, what about the way we built our product or service comes to my mind, get it out, right?
You got to start getting it out because my argument would be some of the most successful businesses I've seen have scaled because they hired salespeople better than the founder. We think the founder is the best salesperson because that's the current bar. Who's to say that that's actually the truth or it's just within this bubble that is the truth.
I would argue if you do it effectively, you can hire salespeople that will far outpace you be way better than you and allow you to really take control of what you should be taking control of, which is vision, leadership, alignment of team, and actually, you know, continuing to take new ground.
Yeah cause it's important for a CEO founder entrepreneur to understand they're causing two very large problems that will stop them from scaling. Number one, as long as they are the best salesperson and they take pride in that and they don't believe anybody else cares as much or can do it like they do it.
They're one person that you can't scale that unless we find a way to add more hours in the day or some magic pill so you don't have to sleep. I mean, you can't scale that. That's number one. The other thing is, even if you found some magic pill, then as CEO, you're not doing the job you should do which is being head of company and driving culture and being the ambassador internally and externally and all those things you should be doing as a CEO. So, that operationalized sales for yes, from a system standpoint, but from a people standpoint is so important.
let's go to number six, repeat your sales motions. What does that mean?
Yup. So this is a fun one end to end sales motion is so important, right? Once we do, I would say, and I think you touched on, I'm going to go shift the founder's identity from like, I am the best salesperson to, I want to equip someone to be the best salesperson. Then you got to look at the actual brass tacks of how do we engage with a client from that very first moment where they're introduced to our brand all the way through to raving fan.
And continuing to spread the word about again, our product or service and how great it is. So we have to look at the whole process. One is the front end is more the marketing side can be very, especially in the inbound type company can be very, very critical. But then we have to look at, okay, what is our qualification process?
What is our preparation process? What's our presentation process? How do we work everyone through this system in the same way? You could also think of this as a customer journey, right? In a marketing kind of analogy. Or using marketing language, this is customer journey. What is the end to end engagement that we would like 95 percent of our clients to go through?
Or does it look kind of like a smorgasbord of like, they sort of just bounce in. Yeah, they all land in the same spot, but it's sort of like. You know, I don't know a great analogy, but you can, it's a funnel and you can throw it in from any angle and it, yes, it's going to bounce and ricochet around and finally find the bottom there.
But like, if that's what our sales process looks like, if that's what our sales motion looks like, A it's not going to be repeatable. You'll never build in great efficiencies to it. And so therefore you will be fighting yourself. Most often, because the ultimate goal of this is not only to create the sales motion, to make it super, super efficient, you're answering your clients questions or your prospects questions before they even have them with that next step in the journey.
So it's really good for them. Also internally, you're not burning time and energy on things that aren't effective. And so when you can get it to be, you know, you think of a well oiled machine, that's what you're looking for. Something that churns really, really well.
And it kind of relates so well back to the operationalize your sales piece, because that allows you to bring on salespeople and set them up to succeed versus go try to make it happen. And also when you've got the CEO doing it, the CEO is typically not following a standard process.
The CEO is like I just know what to (And) say. And I know how to build relationships and I care. And that's very different than what a sales team is going to do. So I love that.
Fourth-Quarter abdication is common, right? Fourth quarter abdication meaning, hey, I've got the deal done, here's the paperwork, can you make sure it gets set up and like, they're on to the next one, right? Or whatever it is. And it's like, so many situations like that, to call it a process would be, you know, stretching the truth.
So really, dialing in the process, making it to where, hey again, when we look to grow and scale, I can plug people into this process. Because I can clearly relate it to them. I can communicate it to them. I can show them visually how it works. I can show them the tools and resources we use every step, every stage.
What are the checks and balances? If this has happened then, right? What are the, if then's or if not, if this hasn't happened, then we need to go and X, you know, all of these things become really important when building that sales motion, because once it's built, my goodness, that's when you can scale it.
That's when you got a machine.
Number seven, last but not least, scale through investment.
Yeah, this is a fun one as well. So scaling through investment too many times. I've been in conversations where we get to the end of a year. We've got some profit. We're like, great pat on the back. We're doing some good things now what? You've got some leaders who are a little more risk averse. What are they going to do?
Put this away for a rainy day. This is going straight into a savings account, making .003 percent interest. But guess what? If we need it, it's there. You've got the other one. Who's like, you know what? I'm not doing that for tax or other reasons. I've got to invest this, but I don't know what return I'm going to get.
So guess what? I'm going to go invest in something. I know the return on. Sometimes that looks like a vehicle for the company, which may be a legitimate need, right? We got to grow our fleet. So, but they know when they walk into that dealership, they can exchange money and they know exactly what they're leaving with too many times.
We don't have that same sense of security or awareness or even visibility to things inside the business, right? Well, what if we could invest this in this area of the business? What would our return be? And how confident are we in that return, right? So we kind of look at it through a couple different lenses.
One is when we look at an investment plan, we do have to know and understand what is our risk assessment as a leader? Are we someone who says this is the time where we push a little more chips on the table than we're used to because this is our growth. This is our year to scale, right? This is when we're going to flip the switch and actually do this.
There's also people who just aren't wired like that and that's okay. I think the investment strategy absolutely has to be built around the founder and if not the founder, the leadership team, depending on the size of business, there has to be alignment around that. Otherwise, again, you're going to have some dissension really quickly, but when we know our risk aversion or our risk capability, then we can look at every element of the business.
And again, what we're trying to say is, where can I put in x and get a 10x return? Where can I put in an x and get a 20x return? There's all kinds of ways to get 1x return on things, right? We can put it in and it'll help. But what we wanna do is look at every area of the business from front end to back end, from sales to technology, to people to again, product or service or even things like that.
Where can we make an investment that will drive the greatest return and then find the comfort level within reason, and then we end with the commitment. What's the commitment behind this? Because it's easy to talk about. It's a lot easier sometimes to commit to because some of these investments that we commit to, let's say January 1st, don't need to happen till the third quarter.
That may be a third quarter investment too often between first quarter and third quarter, something shifts or changes, and we don't actually have the commitment to follow through on it. And so there has to be an ending commitment to say, this is how we're going to invest in the growth of our business.
Got it. And companies that want to grow that, you know, I find sometimes companies very quickly look to the outside for investment as opposed to, you know, investing through as revenue grows and profitability grows, reinvesting in the business. Do you find companies, you know, too quickly look out there for investments, for private equity, for things like that, or maybe it's the opposite maybe there are companies that need to go that route even quicker than they do.
It's a really good question because I think based on the industry or the vertical, it's vastly different. I feel like you've got some that race to raise the outside capital. It's like day two. They're already thinking, well, man, we need this outside capital to really win because we're going to grow so quickly.
You've got others, especially industry based that are very conservative in their growth. They bootstrap everything. They are absolutely opposed to raising any capital from anyone or any source. So I think it varies vastly on the industry or the business type. But what I would say is we do have to look at, you know most of the time we look at what do we want, right?
What's the vision that we have? We always have to look at what is going to cost. Same applies for an investment, right? If we go raise capital, what is that truly going to cost us? Yes, we would have all of those working capital. We'd have liquid to do all these things we need to do, but at what cost, and there's always a cost for everything in life.
There's a cost much less in business, but what is that cost and just weigh it out because there's absolutely ways to leverage in a positive manner and drive scale, but we just have to weigh that. And then I kind of break it down by primary, secondary and edge case, right? What's a primary investment we could make.
What's like, Hey, this would be great to make, but it's not a must for this year or this quarter or whatever. And then what's that edge case option. Hey, if we get there, that's a total card I would play because I think it's going to hit, but we're not sure. Right. So kind of think of it in like first, second, and then edge case scenarios. And I think that could be helpful as well.
Yeah, and I think it's important. There is such a thing as trying to grow too fast, too quickly. And, I've had clients I've worked with where the CEO and a good portion of the leadership team becomes so focused on where the next capital investment is coming from to support their growth, because if they don't have it, they're going to have to lay people off because they hired all these people and built all this stuff in anticipation of growth.
And they focus so much on where the capital's coming from. They lose focus on the business. And that's really, really dangerous.
Also it can happen where you raise investment. You get capital and you feel this pressure to burn that capital, right? To invest it. So I've seen people just racing, trying to spend money. That's sometimes really hard to do, right? It's like, Oh, we've got to invest. We've got to use this, I can't sit on it.
And there's legitimate reason for that. But sometimes I've seen some really poor decision making just because. You know, the old saying of like, it's burning a hole in our pocket is really true. It's like, we've got this capital, our investors expect us to use it for growth. So let's just spray and pray, you know, and that's not a great strategy obviously.
Yeah, be careful what you wish for. Maybe what you don't need is more capital from the outside.
Exactly.
Hey, Trey as we start to wrap this thing up, this was great. Tell us a little bit more about your company and how your service works.
Yeah. So our structure and how we help businesses, is really take these ideas of these seven factors and build a scaling plan. So unlike a business plan, that's a macro that includes mission and values and all these things. We say, what is our finite plan to actually scale the business? And so we're big believers in every business having a scaling plan for themselves.
And so we take these seven factors, we walk through them and we distill these into a 50 plus page playbook, more or less, right? A scaling plan that they take into their business and apply. And so when we do that, we do it a couple of different ways, right? We have a platform that'll be launching soon, actually, about the time this airs, it will be live and that is a platform where you could technically self pace through some of this building, right?
You could build your scaling plan. Think of it like TurboTax. You want to do your taxes. I don't know everything about you, but if I ask the right questions, you can fill in those blanks for me or go find that information and you can build that scaling plan. Same thing. We also do that with a lot of support.
Right. If it's a larger company, more complex, a lot of times we're bringing in that outside voice, that expertise to say, okay, as we build the scaling plan, there's coaching and consulting that we can support that with. And then ultimately, you know, the back end is leverage that continue to use it, engage with it often.
And so that's how we help clients.
We typically help them build a scaling plan over the course of 7 weeks is typically what it takes to build out a robust scaling plan. But that all starts with understanding how scalable business is you mentioned earlier our scalability assessment. So we create an assessment.
If anyone listening says, I would just be curious how scalable my business is. You can go to thescalefactor.com/myscore and you can get your score, your scalability score for your business. Not only your scalability score number, you can see how your business stacks up against other businesses in scale.
So you'll give a delta there. And then lastly, what is the growth opportunity? Over the next one, two and three years. And so it's a quick assessment. It's easy, but it'll come packed with nine pages of not only data and input on where your business is, but also action steps you can be taking immediately to grow and scale.
Love it. If you're listening, not sure why you wouldn't do that. And (that) that will be in case you're in the car, it'll be in the show notes. The link will be in the notes.
Awesome.
Trey is there any place else you want to send people to go to find out more about you, more about the company.
Certainly our website is thescalefactor.com. And you can look on any social platform @scalefactorco on all our socials. So scale factor co, we'd love to have you along on the journey, follow along. We always try to add value at every chance we can. So you'll get plenty to invest in. I think we always try to make it actionable, even down to our newsletter.
It's a three, two, one. What are the three facts? How can we apply these and then what actions are we going to take? Right? So we try to make it easy.
Well, if you want a great company, you need a great leadership team. Trey, thanks so much for helping us get there today.
Absolutely. Really enjoyed the conversation, Mike. Thanks for having me.
Same here. Thanks.