Why I’m NOT Scaling My Businesses This Year

Yep, you read the title correctly. I am NOT scaling my businesses this year.

This is not your typical blog post about the rags and riches of entrepreneurship. Instead, it’s a shameless reflection on how I failed and what I learned. Read on if you’d like to hear about the “other side” of the story that most entrepreneurs never share. So let’s begin…

Last year was a crazy year for me. Here’s a summary of what I took on:

• My 2nd child, Sepia, came into this world (two kids now!).
• I hired a mentor.
• I took on a business partner @ MemberDev.
• I hired 3 new employees across two businesses.
• I closed 300k of new deals @ MemberDev.
• I doubled CM Fusion‘s MRR.
• I put systems in place across two businesses to accommodate for growth.
• The list of awesome things goes on…

On paper, most entrepreneurs would be ecstatic. This is the small business operator’s dream! Pop the bubbly and get back to work 🙂

Not so fast… here’s what ALSO happened as a result of everything above:

• I woke up at 3am EVERY morning to make sure I could finish critical work before my kids woke up. This resulted in me basically passing out at 8pm every night with a very unhappy wife.
• I spent 50% of my time on sales related activities, instead of technical development (which is my zone of genius).
• I encountered my first “project dispute” in 10 years of business that resulted in a significant project payment refund.
• I eventually let go of all 3 employees I hired.
• I eventually parted ways with my business partner, but very amicably.
• I lost touch of any social life I used to have.
• I didn’t take a true vacation.
• I lost sleep for the first time in my life.
• The list of not-so-awesome things also goes on…

Why… because I became obsessed with the notion of scaling my businesses. I thought the right growth model would solve problems and lead to a better place. I convinced myself that accelerated growth was needed and now was the time to step on the gas.

I was completely wrong.

And luckily, I realized this before major damage was done. I encountered a bit of personal debt and some stress at home, but I kept a last line of defense up to make sure I didn’t completely lose touch of the things that were most important to me – my family and my direct relationships. Many entrepreneurs figure this out when it’s too late and incur a lot more damage than what I incurred.

Why… because most entrepreneurs become obsessed with growth.

Now don’t get me wrong, as entrepreneurs we SHOULD have a growth mentality. You should embrace a strong work ethic and seek progress. I’m just as competitive as any other CEO, and I will continue to grow my businesses. However, there is a time and place for “scaling” a business.

But let’s be clear – scaling a business is not the same as business growth.

Scale requires intensive resources and a more aggressive growth path that typically demands the following:

• More time and commitment from everyone
• Accelerated sales cycles
• Faster product development and execution
• Harder pushes towards aggressive goals
• More rapid team growth (a.k.a. hiring pains)

Whereas, business growth can occur naturally with none of the side effects that scale introduces. Simply put, scaling businesses is not easy, and if you attempt it at the wrong time it can cripple you.

Here are the key things I learned:

1) Growing businesses AND growing families are not things that compliment each other well.

This is especially true when you have young children who demand a lot of time and attention. I have a 3 year old and a 1 year old who are the current focal point of my life. I have breakfast with my children EVERY morning, and I’m home by 5pm EVERY night. I do this because being a father is my top priority and I truly want to enjoy watching them grow up.

You can imagine that this limits my work week and any “extra business activity” becomes de-prioritized as a result. As I mentioned above, family was my last line of defense and ultimately why I didn’t fall apart last year. I was able to say no to the business when family came first. But it came at a cost to both businesses, which resulted in less productivity.

My humble advice: don’t take on your hardest work with young children, and more importantly, don’t EVER let work hinder your ability to be a great parent.

2) Hiring junior talent is not wise for small businesses.

I love mentoring. It’s in my blood and part of why I work in technology – to give back to the community that taught me. But mentorship comes with a very heavy cost, and I don’t mean financially. You cannot support junior team members without putting A LOT of time into them. Period.

This time investment can definitely pay dividends in the long run, but it will be intense and very expensive in the short term. For small businesses and startups, time is your most precious resource. Think twice before giving it away freely.

My humble advice: don’t hire junior people unless you have extra time and resources to support them.

3) Broken processes can trump great sales.

I’m a software engineer at heart but I’ve become pretty good at sales in tandem. So good that I closed our Q2/Q3 quotas a few weeks early last year WHILE also leading technical development on several projects. Yep, we had deals in the pipe to actually sit back and take a breather. However, that wasn’t possible because our processes were a complete nightmare. Timelines weren’t getting hit, budgets were fluctuating, and expectations were not properly set. We hit every “agency frustration” known to business. In this context, more sales was not a cure.

My humble advice: invest in SOPs and other forms of process documentation early on and stick to them. Without process great sales don’t matter.

4) Set goals and track against them.

Early on in my career I never set goals. My goals were to grow! And I saw growth… but I never actually mapped out where I wanted to be – i.e. a clearly defined goal. This past year I set some specific goals and it completely changed the way I approach business. Not only did I hit some of my goals (which felt great!), but I drastically missed several others. That taught me how well [or poorly] we actually tracked against things we were working on.

My humble advice: create some goals and be consistent with how you track against them.

5) Figuring out your WHY is more important than any other motivator or metric.

My incentive to grow was similar to most entrepreneurs in that I wanted more time, money, and ultimate freedom to live life on my terms. I think we all tell ourselves that these are the main reasons we start and grow businesses. However, most of us neglect the true desires we have deep down. That’s something I had to learn through mentorship + lots of self-reflection… and I’m still honestly navigating the depths of my true WHY every day. You have to reach a certain level of entrepreneurship before you can really understand this.

As entrepreneurs we’re born to create. We’re naturally driven to execute and subsequently make an impact on the world. That’s written into our DNA, but that doesn’t necessarily mean it defines our purpose or sense of fulfillment. Understanding your WHY will truly change why you get up and work everyday. It will become the thing that organically guides you. It will make work, and business growth, come more naturally with clear goals and objectives.

My humble advice: put time into self reflection to dig deep and figure out WHY you want to grow a business.

Ok, great story… but what Now?

So, given all that what am I focusing on now?

Not scaling.

My mindset has shifted away from “scaling businesses” (for now). I’m taking a step back to focus on rebuilding systems and processes around what matters most. More importantly, I don’t need the pressure or stress that comes with that responsibility. My main priority is to be a father, a husband, and a good leader to the team members and customers that rely on me. Everything else will take it’s shape naturally as the businesses grow on their terms. That’s perfectly okay.

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