You Can’t Do It All Yourself: When And How To Scale Your Business

Yesterday I wrote my first post in a new case study series I’m doing on my brand development process. I had some really great feedback to the series and it’s clear this is definitely of strong interest to a lot of readers. One of my readers, in fact the same one that inspired the case study series (Domain Fuze),ย  asked a great question yesterday. This was such a good question, and one that I think many Domainers have so I thought I’d do a post about it! Here’s the question that was asked:

Following your blog, the thing that Iโ€™m most impressed with is your ability to juggle 37 projects at once, all outside of your day job. Domaining is also a 2nd job for me and I would love to hear any time management (hate that phrase) tips that allow you to be so effective. With the recent birth of our first, I see now that I USED to have all the time in the world. Now Iโ€™m scrambling to learn how to time juggle.

The question here extends beyond Domaining and applies to tons of other businesses both online and offline. I’ll start with how I scaled my business and then move-onto some recommendations that will apply to just about any business.

So here’s the magic question, “what is the difference between running a business and being self employed?”

Running a business means that if you go away for a month, when you come back the system is still running, money is being made and work is being done. This means you have developed a system for making money and found the right people to do the day-to-day work. Being self employed on the other hand means that if you go away for a month, so does your income. There’s nothing wrong with being self employed but it does mean that you probably spending more time working in your business than working on your business.

When you’re self employed starting a new project means taking on more work yourself, when you run a business starting a new project means putting-together the right team to get the job done. This is the point that I hit in 2009 after spending over a year being self employed in the domain investing space. Every time I wanted to embark on a new project this meant putting more work on my plate. It reached a point where I just couldn’t keep up with the work, I was the worst boss in the world, and being self employed, I was getting overloaded as an employee.

So I reached-out to a few family friends that run their own businesses to get some advice. All of the advice came-back the same, “well it sounds like you’ve created a job for yourself, now it’s time to build a business.” They said that since my business was making money there is nothing wrong with taking some percentage of that money, and using it to pay people who will do the work. As a business owner they stressed the importance of staying strategic and finding great people who your trust to do the tactical day-to-day roles.

I started-out by going onto oDesk and hiring an HTML/CSS/PHP Developer and a Graphic Artist. This meant that every time I had an idea for a new brand to build, I could reach-out to my two new team-members and give them the project. Of course this means managing a team which is another challenge onto itself but critical to do in order to really build a system. My first two hires turned-out to be, well, not so good, so I fired them and began looking for better replacements.

It was through this process that I learned about how to find great people, rather than just finding people who could get the job done. My interview process became more detailed, I spent more time talking to references and looking at past projects. Soon I had hired four people, two developers, a graphic artist, and a content writer. None of these people were full-time but instead were paid on a per-project basis. I found this worked much better than hourly when it comes to outsourced staff.

While I was giving away a percentage of my profits I was also shifting gears and going from being self employed to running a business. This was all solidified for me in August of 2009 when Daina and I took a month off and traveled the world. For an entire month I spent no more than 20 minutes a day on my business, and that time was spent just doing email and syncing-up with the team. In September I reviewed my balance sheet for August – I had just had my highest revenue month my business had ever seen.

Now my business is working on more projects than we ever have and seeing incredible traction and growth. When I buy a great domain for development I don’t think about how much time it’s going to take me to build the site, write the content, etc. Instead I think about any special instructions I should give my team, particular considerations they should make, etc. My time is spent analyzing the markets that we’re in, negotiating strategic partnerships, and making investments that continue to grow the business. I now have a total of eight people that work with me on a per-project basis and I’ll probably be bringing on 2-3 more people next year.

So how do you know when it’s time to shift from being self employed to being a business owner?

This is different for everyone but the rule of thumb that worked for me is when you hit the point that you could give-away 25% of what you’re making and still be happy. You only want to scale your business once you’ve found a system that works. If you aren’t generating very much income then you’ll want to stay in the self employed category until you find a system, a process that can be used to generate income. Once you’ve followed the process yourself and seen that it works, and see your revenue increasing, then start thinking about how someone other than you could do what you’re doing.

Whether you are running a domain investing company or a cement delivery business the idea is still the same. If you want to scale your business you can’t do it all yourself.

As you scale you’ll start to do more things that a CEO would do rather than an employee. I went from writing articles and HTML code to finding great people and determining how to best motivate them and keep them excited. I focused on building long-term relationships with advertising partners and other companies in the niche we were building in. My job went from a day-to-day role to a much higher-level strategic role looking at the business from 10,000 feet.

Now my last point here is the importance of timing. Not everyone reading this will be able to scale their business right-away. In many cases you might still be looking for that replicable system or process. Don’t get disappointed if you haven’t found it yet, this is the challenge of running a business and the reason why so many startups fail. Failure is good, you can learn from it. The key is continuing to pivot and iterate until you find a model that works. Once you find that model you can stop working in your business and start working on your business.

{ 12 comments… add one }

  • John December 14, 2011, 11:45 am

    Have you tried using people from TaskRabbit?
    I looked through their site last week and it looks good, especially in how their check peoples background etc
    John

    Reply
  • PPC Ian December 14, 2011, 1:18 pm

    Morgan,
    Well said. Very similar to the teachings of Robert Kiyosaki. I’m so impressed with your operation. Keep the great posts coming!
    Best,
    Ian

    Reply
  • Jason Thompson December 14, 2011, 2:17 pm

    I actually brewed a cup of coffee to get started on reading this post. Alright, time to read!

    Reply
  • Jason Thompson December 14, 2011, 2:34 pm

    This is the best write up I have read on your blog Morgan. I think I feel this way because it directly applies to me. ๐Ÿ™‚ Unfortunately for many of us entrepreneurs we are great at giving advice, but not necessarily good at taking it ourselves!

    Laker tickets on you Morgan! http://www.ticketmaster.com/Los-Angeles-Lakers-tickets/artist/805962?tm_link=edp_Artist_Name

    Reply
    • Morgan December 14, 2011, 2:37 pm

      Thanks @Ian and @Jason – really glad you liked the article, definitely one of the most important lessons I’ve learned building my business.

      Oh and Jason Lakers tickets ALWAYS sound good to me ๐Ÿ™‚

      Reply
  • Logan December 14, 2011, 4:07 pm

    Awesome post, Morgan. Very insightful and helpful to those of us with very limited extra time who want to build a business “on the side”.

    Reply
    • Morgan December 14, 2011, 4:09 pm

      Thanks @Logan – much appreciated!

      Reply
  • AndyO December 14, 2011, 4:18 pm

    I was thinking of the same question that Domain Fuze asked, thanks for the well laid out and thoughtful response! It’s a slightly different approach I haven’t taken before, and something I’m glad I’ve read.

    Reply
  • DomainFuze! December 16, 2011, 12:04 pm

    You take the time to dedicate a post to answer one of our questions and I don’t even have time to respond until 2 days later! Exactly why I need to put together the plan to work on the biz, not in the biz.

    I’m glad that you said the first people you tried on oDesk didn’t work out. That helps me to understand that you’ve got to be willing to try people out, not be afraid to cut ties, and move onto the next. Can you tell me if you stayed within oDesk once you dumped the first batch? In past projects, I always got bogged down w/the technical stuff, then am too burnt out to concentrate on attracting customers, churning out content, etc….so I am definitely looking for some good references for development and design.

    Huge thanks & have a good weekend.

    Reply
    • Morgan December 16, 2011, 2:32 pm

      Thanks @DomainFuze! It all starts by taking everything you do day-to-day and thinking…could somebody else do this? And if so, for how much?

      Reply
  • Nadia December 17, 2011, 9:08 am

    This article was perfectly timed for me – I recently acquired a 1997 .com that I’d like to develop. The only problem is that while I’m familiar with the nuts and bolts of making websites, I have NO idea how to manage a team and find trustworthy people. I’veterm outsourced projects over the years, but haven’t found anyone I’d want to work with longterm. This project could potentially mushroom into something overwhelming in very little time, so I definitely need help, if only for my sanity.

    I’ll keep an eye on the rest of your brand-building series – but if anyone can recommend any books on monetization strategies and revenue models, that would be great!

    Reply
    • Morgan December 17, 2011, 9:35 am

      @Nadia – thanks, I am really glad you liked the article! If you have no idea how to manage a team then you’ll have to learn if you want to be a CEO. Running a business means that one of your top priorities is motivating and managing people, and of course finding more great people. I think the first lesson that you’ll learn is that most people do lousy work, finding really high-quality team-members is a major challenge.

      Companies like Zappos have probably gone the furthest to make sure they have the best quality employees. If you don’t know how to manage people and you don’t want to develop this skill-set then the answer is already in front of you – hire a web development company. This way you wouldn’t have to worry about running the web development business, but instead would focus on things like marketing, direct advertising deals, domain acquisitions, etc.

      While you will definitely get the best pricing by assembling your own team this approach is not for everyone. Sometimes hiring a company that’s already up and running efficiently and has a CEO that is great at managing their team is the best choice.

      Not matter which path you take just stay focused on putting yourself in a position where you are working strategically on your business rather than working tactically in your business.

      Hope this helps!

      Reply

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