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Issue #8 • August 2017

How to Scale Your Online Business Income Over Time

Financial Statements Strategic Planning Strategy & Operations

Scaling. I’m sure you’ve heard that word about a million times since you’ve joined the blogger realms. If you haven’t yet, when an online entrepreneur mentions scaling their business, they’re talking about how to grow their business while adapting to an increased workload without losing the integrity of their work, products, services, or revenue.

Finding the most efficient and effective ways to scale their business and income is at the forefront of most blogger’s mind when they’re working to earn their living online. I’ll show you some real life examples of bloggers who successfully scaled and continue to scale their business later on, but first let’s talk about the scaling mindset.

Things to think about before you scale your online business

At this point right now, do you have a scalable business model? Are you even sure what all that entails?

Growing a business for scaling purposes takes a specific type of mindset. It even takes a specific type of business model. For example, if you’re running a service-based business where you value working one-on-one with clients, scaling is most likely not going to work for you. Scaling involves that hands-off, automated ability that doesn’t lend itself to a service industry.

However, if you’re in products, SaaS, or other industries like them, and scaling sounds intriguing to you, here are a few ways to make sure you’re optimizing your existing business to make it scalable.

You must have the right systems in place

Scaling requires the ability to step away from your work for a more hands-off approach. That means you need to have thoroughly thought through setting up processes and systems that either automate your existing work or define that work so you can hand it off to someone else without much explanation.

So if you’re planning on scaling your business eventually, it will require a lot of upfront work that will pay off in the long run. Some aspects of your business you should consider creating systems, processes, and automation for are:

  • Training processes
  • Daily to-do lists
  • Email marketing
  • General accounting (bill paying, payroll, etc)

Basically, anything you can think of that allows you to step away to work on something else can streamline your operations. What do you think you can streamline right now for your business?

Don’t rush scaling

This is super important. According to the StartupGenom's survey of 3200+ startups, 74% of failures can be explained by premature scaling. You just can’t rush this. Scaling your business needs to be a careful and calculated process for a few reasons.

If you’re not ready, overnight success is actually a huge problem. Can your website handle a deluge of visitors, or will it crash with too many hits? If you’re selling a product, do you have the inventory to keep up with demand? Do you have team you trust to handle customer support, marketing, and other daily tasks?

It’s best in this instance (and honestly most instances) to set realistic expectations. Take an afternoon and set up a timeline for your scaling. Think about milestones you want to hit over the next year or two, both product- and financial-specific, and set those realistic goals.

Pro tip- Always give yourself more time than you think is necessary to hit those goals. As with most things in life, give yourself some grace periods and little breathing room to grow.

Don’t be afraid to outsource

When you’re first starting out, you’re most likely not going to have the funds to hire on team members to help you do all the work you need to, but that doesn’t mean you still have to do it all on your own. Outsourcing work can be an affordable way to narrow down your daily work.

Part of scaling is knowing your strengths– what you truly need to focus on– and finding ways to outsource your weaknesses or non-essential tasks. This could be hiring a VA to take care of your administrative needs, finding a copywriter to help you nail down your voice, or a designer to help you create the perfecting branding.

Hiring out for this type of part-time work will save yourself some stress over work you don’t love and will free you up to keep your mind on the bigger picture tasks for running your business.

Know when and who to hire

Outsourcing is great at first, but if your business is growing, there will be the time and opportunity to start building your own team. This can be both an exciting and scary time for you as business owner.

First off, hiring is another one of those things you don’t want to rush. You need to make sure you’re able to pay salary, that you have enough work for an employee, and most importantly that you hire the right employees.

When considering a new team member for your scalable business, they need to have the same vision as you, are team players, and are a full of good ideas to keep the business rolling when you move on.

Know when to walk away

Scalability is about creating the opportunity for you to step away and have your business (and the people you hire for it) run and operate on its own so you can start on something else. If your true goal is to build scalable businesses, then you’re going to want to keep this as your mindset.

You don’t want to be in this one role forever, so that means you need to keep up with all the points I just mentioned to feel confident when you move on to your next big thing. Your business isn’t tied to you making it happen, and that’s true scalability.

How to build a scalable business

Know that we’ve gone over the mindset you need to build a successful, scalable business, let me show you how some real life bloggers scaled their businesses. Getting this kind of inside look into actual numbers might give you a better idea of what it will take for you to start scaling yours.

First up, Pat Flynn.

How Pat Flynn scaled his business

Pat Flynn didn’t start out as the king of passive income that he is now. In fact, he was in a completely different industry.

Back in 2007, Pat was working in an architecture firm as a senior drafter, but wanted to up his career and get his architecture license and become a LEED Accredited Professional. The problem with that was the exam to become accredited was difficult to pass (only 30-35% pass). Not one to shy away from a challenge, Pat started researching.

To keep himself accountable in his studies, Pat started a blog to document everything he learned in an easy-to-access system. During this time, he also participated in LEED forum discussions and even started helping other people study for the exam as well by sending them to his blog.

By 2008, Pat passed his exam and got a job at a firm. However, when the economy tanked later that year, Pat found himself in a round of layoffs and looking for a new way to provide for his family.

With the amount of people he was able to help pass the LEED exam, he decided to build on that. Again, he set to researching, learned everything he could about web traffic, Google Analytics, and Adsense and eventually was able to turn his blog about the LEED exam into a sellable eBook. Since then, Pat has added not only to his product storehouse but also to his myriad of revenue streams. Let’s look at his income reports at four different points over the years starting with his very first month.

* This first couple of years don’t include the expenses he incurred each month or a net profit number

How to scale your blogging business- Pat Flynn October 2008

 

How to scale your blogging business- Pat Flynn April 2010

 

How to scale your blogging business- Pat Flynn May 2012

 

How to scale your blogging business-Pat Flynn June 2017

 

You can see how over the years, Pat diversified his income with different revenue streams. The more revenue streams you have that can keep running basically on their own, the easier it will be for you to grow your income. You’ll also notice that the more revenue you generate, the more expenses you’ll have. That’s totally normal. You’ve heard, “You’ve got to spend money to make money”, and Pat’s income reports make that very apparent.

How Claire Pelletreau scaled her business

Claire Pelletreau is a Facebook ads consultant and self-proclaimed conversion junkie. To scale her business, Claire learned how important it was to get over self-doubt.

“I’ve held myself back from creating earning opportunities, exploring partnerships and pricing accordingly because of self-limiting beliefs and Imposter Complex issues. Breaking through those beliefs with a coach has been a game-changer.

For example, a few months ago, I entered into a partnership with an established Facebook ad agency. I would have never considered this a year ago, because I felt like I should be the one to run an agency instead of working for one. But that kind of business is not one I want to run . . . at all.

Now I get to keep doing Facebook ad implementation (which I love), keep teaching others how to do it (which I’m great at), and I’ve developed relationships with “competitors” that actually strengthen my business.”

Knowing you’re capable and exploring new avenues is really important for the right mindset to build a scaleable business. If you focus on being a one trick pony with stagnant prices, you’ll find it’s almost impossible to scale. You need that diversity of revenue streams and you need to be confident in how you price.

Growing from one steady yearly income to the next level is all about your revenue stream design. Claire states,

“If you only offer low priced courses, for example, getting to $10K in course sales each month will be a considerable challenge. If you’re a service provider charging $2500 per project, the scope of those projects can’t be so big that you only have time to complete two projects a month.

But if you have diverse revenue streams (or only offer products or services at premium prices), then you should be able to reach $100,000 in a year without needing an impossibly high volume of clients or customers.”

It’s that revenue stream design that helped Claire truly scale her business. By focusing more on courses, a product that has fewer customer touch points and higher price points, Claire was able to do that same amount of work, but increased her income. You can see how in her estimated monthly income reports:

How to scale your blogging business- Claire Pelletreau 2015

 

How to scale your blogging business-Claire Pelletreau 2017

 

Are you ready to scale your business?

Have you set up your blogging business in a way that makes scaling possible? If your answer is yes, awesome! It’s time to take the next step and start thinking of new revenue streams you can create to diversify your income. Will you add online courses, affiliate revenue, eBooks, or sponsorships? The sky’s the limit here.

If you answered no, take the time to make sure your business can be set up for success. Do you have automated systems set up for things like email marketing? Do you have contractors you trust to outsource unnecessary work to? And most importantly, do you have the patience it takes to slowly grow your business?

 

 

Dani Stewart

As a daughter of an entrepreneur, the wife of an entrepreneur, and an entrepreneur herself, Dani has lived and learned all sides of creating and growing businesses. She is excited to bring all that life experience as well as a decade of crafting content to the ConvertKit community. She is a part-time baker, dinner-party planner, and lover of good bourbon living the simple life in Nashville with her husband, Sean.

Experience this issue your way

Download this issue of Tradecraft as a PDF to read and reference at your own pace.

  • This is a brilliant article – meaty in all the right places. Thank you, Dani!

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