Growth vs. Scaling: What These Words Actually Mean (And Why Everyone's Confused) [Ep. 370]

Everyone in the online space really is talking about scaling, right? This word is getting thrown around. Like in every situation, scale your business scale to six figures. Scale this offer, right? But here's what I'm not seeing is I'm not seeing anyone actually talking about what scaling is, right? Or what the true definition of scaling is. And for the most part, most people are not scaling to six figures. They are growing to six figures. And when you hit, you really pretty much grow to six figures and then you scale to multiple six figures, okay? But here's the difference, and this is what we need to talk about today on this, on this episode, is that when you are growing, you make more money, right? Revenue is increasing, but you're spending more time and money to make it. When you are scaling, your revenue goes up and your costs and time kind of stay the same, and that's when your profit starts increase. We talked about profit earlier this month. And so today I want to break down, like, what are the real differences? How do you know which stage you're in and how do you know when it's time to pull the trigger, right? Because if you try to scale something that is not fully grown, you will burn out, right? Or you, it will crumble because the foundation is not built properly. And without a proper foundation, you can't scale it, right? Like, I want you to literally think of a building like a high rise building, right? A high rise building. They scale up, okay? They're taking the same amount of space on the, like on the footprint of the earth, right? Like a building. That's why they call it a scaled building, right? Because they're not going wide, they're not going deep. They're. They're taking up this amount of space on the earth when they build this building and then they just scale it up, it goes up. Nothing else increases except for the, the height of it, right? So that's really, truly like, use that visual in your mind when you think about scaling is that it's got to go up, but the amount of time and like space, space that you're taking up can't increase with it. Otherwise you're. You're literally essentially growing. So anyway, we're going to break it down because I want you to help you, I want to help you really understand the difference so that you can build your business with intention and not hit this place of like, where you're starting to get frustrated and wondering why, like, why do I keep coming up against this wall, okay? And I also don't want to see you tank Your income. Because if you try to scale your business too soon and it's not fully grown or fleshed out, like, you literally will take your tank, your income. And I have seen it. Okay? So this is why this is so important to understand the difference between these two. Okay? So let's dive in. All right, real quick. If you're new here, you are listening to the Real Truth About Business with Michelle Denial. I am your host. I've been in this online space for almost a decade. I've been in the business building accounting space for 25 years. I know this shit like the back of my hand. Like, literally, this is. I've been. I've seen it, I've done it. I've done it all, okay? I'm not new to this. I've got 25 years in this at this point. And I want you to just really understand that this is. This is the boring shit that's going to build your business, okay? And if you want more boring shit, more little boring tidbits, not they're actually not boring. Like, this is the things that make you money. So to me, this is not boring. I don't understand, like, it kills me in the online space of, like, people love all this quote unquote sexy shit, but the sexy shit's what's costing you money, okay? The sexy shit is what's costing you money. It's decreasing your profit. And the boring shit is what's actually making you money. So if you want more of it, jump into my free private podcast, which is Back Pocket Insights on that. I release two episodes a week, and you get an email every week with an action that you can take. A way to think about your business differently, a way to take action immediately on maybe something that feels a little bit boring but is literally designed to make you money. Okay? So, all right, let's dive into this episode. So what is the true definition of growth? Here's what I want you to think about. In growth, you are increasing revenue, right? You're taking on new clients. Your revenue is increasing. However, your costs are increasing mostly proportionately at the same rate that your revenue is increasing. So let's say you're a done for you service provider, right? You can take on new clients all you want. So if you're a done for you service provider, you can grow your income and you your revenue by taking on new clients. However, your time increases at the same rate. Because it's not like you're taking on new clients and not having to do the work. You're a done for you service provider. So you are still having to serve them, you're still having to, you know, your time. Whatever the offer is, you're putting your time into it. So your costs are the same. The other way you can look at this is if you have costs associated with this. So like if you run an agency per se and you increase your revenue, right. You take on a new client, but you have to hire somebody to fulfill that client and to fill all of the deliverables and time and all of that, then your costs, right. Just added at the same rate. It's a little bit, right. Like obviously if you're hiring somebody out, there's definitely a little bit of a profit margin set up in there. But again that's not truly scaling because your costs are increasing at the same rate as your revenue. So you're not in. You're not really increasing your bottom line profit margin at all, right? So again, if you take on 10 new clients and your revenue goes up 40 or 50 grand, but you have to hire help and you have to bring in more tools and you're working more hours, your profit probably could have only increased like five grand. Okay? That's growth. And there's a lot to be said for growing. Do not think that you can just jump right to scaling, okay? Now scaling, the true definition is that like your revenue increases, but your costs stay the same or they decrease, your time stays the same or it decreases. Right? So that your profit significantly increases. Okay? This is where group programs come in. Or like I think personally like the VIP day model is an extremely safe scalable business model because the faster you get at it, the more you can charge for it, the less hours you spend on it, right? There's just different ways that you can scale that. That's. We can talk about that in to the nth degree. But again, the whole point is in a growth stage, your revenue is increasing and your costs are increasing as well. Costs are time. In the scaling stage, your revenue is increasing, but your costs are not or they are decreasing and your time is not increasing, right? So again, this is why people say like creating group programs are A1 to many, they are scalable, I'm going to get to that. But like if you have a group program now that you launch out that you've got 25 people paying $3,000, that's $75,000 in revenue and your cost didn't change, right? Like the amount of time you're spending, especially for a group program is probably typically the same, right? Like inside a focus Visionary accelerator. That's my signature program for the most part. That is a scalable offer. I can add people to that and my time doesn't really increase because it's a group program. I show up and I still am spending the same 7ish hours a month serving everybody inside of FVA, whether there's 7 people in there or 17 people in there. To the ex. To, to some extent, obviously the more people in there, the more questions, whatever. But again like there's no real additional cost because that program is set up and running. So it's, it increases revenue. Okay? Growth, more revenue, more effort, more cost. Scaling, more revenue, same effort, less cost. Okay? So I want you to really think about this right now. And like if you want to know like what stage you're in, are you increasing revenue but your efforts are increasing as well. And again, this is not wrong. This is typical of where most business owners stay, especially to the six figure mark. Most people do not scale to six figures. That's what I was saying in the beginning of this. You scale to six figures, you grow to six figures. Ish. Right? Again, there's always room for, there's always room for customization, but you don't grow, you typically grow to six figures and then you scale to multiple six figures, right? What got you here isn't going to get you there, right? So what gets you to 10k is not going to get you to 20k. You have to potential for the most part. You have to have something that is scalable to get to 20k months, but versus 10k months. Okay? For the most part. A lot of people can get to that 10k month mark while growing, right? But they, the work that is associated with that is going to be the same. But the online space paints it out that you can just magically scale a business to six figures. Because you can create a one to many offer, right? You can, right? You can, you can raise your prices, right? But you have to have many in order for a many offer to be scalable. Otherwise it's not. And that's what I mean by if you try to scale too soon, it will tank your income. But let's talk about growth before we get into scaling because I could, I will get fired up about that. But when I want you to think about your growth. So if you are in a growth stage, if one you have the space and capacity to add more clients, with your current pricing and offers, you are growing. If you take on a bigger project, but with that bigger project it requires more hours of you or it requires more team members numbers or whatever. If you are raising your prices, again, that doesn't necessarily mean you're scaling because typically if you're raising prices, your costs have associated with that cost of living has gone up. So a lot of times we're raising our prices, but the cost of living is going up, which means you're paying yourself more. So you're really not scaling, you're really breaking even. Okay, maybe you add and expand new services, but again, if you add new services that require your time, that require team members, that require you to show up again, you're increasing revenue, but you're not necessarily increasing profit. You're not decreasing any of your costs. You're growing, right? So you need with growth, you can only grow so far. You can only grow to your capacity, right? That's the thing. Like you can stay in this growth stage, but you are going to hit a capacity point because especially if your costs continue to associate and increase with it or your time, right? This is where most people immediately think, like, I've capped myself for time, I must be ready for scaling. No, not necessarily, right? Just because you're capped for time doesn't necessarily mean that immediately you're ready to scale, right? There's so many other options because again, scaling, you have to be able to increase revenue without increasing your time, right? And you have to have system set up, you have to have an audience set up, you have to have all of these other things set up and built out and ready in order for it to truly scale. Otherwise you're going to switch to a quote unquote scalable business model, but not have all of the systems, audience and tools in place to do it and you could potentially tank your income, right? So we have to sometimes look at in the growth stage and I was just having this conversation with a client actually in depth on her podcast. I will link it. It's the your girl media or your girl podcast. It's just called your girl. Her name's Marie Walker and we talked about this a lot on her podcast. So I will definitely link that. But when you think about your capacity immediately people think, ok, cap time for dollars, it's time to scale, right? But there's so many ways that you can continue to grow your revenue and really try to like incrementally scale it in these little micro moments without just immediately switching your business model. And I think so many people think that as soon as they're ready to scale, they switch their business model and you don't have to, right? Again, if you want to take on one to one clients and your cap time for dollars, well then let's look at what does it look like to do VIP days or some type of done for you in a day or done for you in a week where you can charge significantly more for time and speed and you can get exponentially faster and you can make more money and spend less time. Right? Like that's one way to kind of start to scale a one to one offer. Raising your prices, again is just a growth stage tactic really for the most part because it's likely that you're raising your price, but your costs, somewhere along the lines have ex. Have also increased, right? We all get price increases all the time on all of our softwares, our tools, right? So your cost of doing business has increased. So your pricing increase technically for the most part is usually just covering that. Okay. And also too like if you're so let's say you're scat. Your cap time for dollars and so you hire a va. Okay, well now your expenses just increase, right? So you may take on a new client, but now you also had to hire a VA or a contractor, right? Or maybe now you're working longer hours, you're working over your capacity, you're working on the weekends. That's growth, right? These are all things that happen. And I think, you know, again, people get stuck in that and growth is just how you look at growth. Again, you can get to six figures growing your business. You can get to six figures by raising your prices, having more clients, doing all the things. Right, right. So like let's, let's dive into a little bit of an example here of like, let's say you're, you're stuck at this kind of 60k range, right? That's about the 5k mark a month, which a lot of people are. A lot of people get revenue plateaued at that 5k month. It does seem to be a gross salary ceiling. And they think, okay, I'm at 5k, I need to scale, right? Not really because again, at 5k that's probably not a lot of clients, is probably not a lot of. Not a huge audience. So again, what's there to scale? Scale is again many. You've got to be able to exponentially increase revenue without increasing your time. And the only way to increase revenue at that point is to have a audience ready and waiting, right? If you don't have an audience ready and waiting, there's nothing to scale, right? So if you're stuck at 60,000 and you're doing one to one work and let's say you raise your prices, you add 15 new clients and now you're making $120,000 per year. But with that 120,000, you didn't scale it to six figures because you hired a VA, right, to schedule, to handle your scheduling, to handle your content, right? You had to bring on a CRM system and you didn't really have a CRM really fully fledged out and a client onboarding to handle all those new clients, right? Again, so you've got to have better software and systems because now you're onboarding, you're offboarding, you're doing all of these things, you're extra hours because now you've taken on so many clients to get to the revenue number that you want to get to, but you're working way more hours, right? You're not calculating and really adding up all of your time. So you're making more money, but you're working more hours. So you're actually making less per hour, right? And so profit can significantly decrease. Okay, that's, that's a growth stage problem. But the answer is not just scaling. The answer is looking at, okay, where, where are we coming up against this capacity? What's actually happening here? Why do I have to take on so many clients? How many hours am I spending with these clients? Is there a way that you can decrease the amount of hours you're spending with clients? First and foremost, that's your first tip to scaling. If you want to scale and you're in this situation where you're kind of plateaued, you've got to look at your hours. That's first and foremost where you are going to cap. And until you get your hours under control, you can't scale, right? Because if in order for you to hit that 120k right, your six figure mark, you are literally at capacity working every hour. What is there to scale? Right? There's no hours available to scale, there's no hours available to create a scalable product. There's no hours available. So like again, first and foremost, your first step to scaling is always doing a time audit to really see where am I spending my time and why am I spending so much time with each one of these clients to a point where my, my schedule is jam freaking packed, right? Because again, where's that leave for admin, marketing, all of that? So you can't just say like I'm going to take all of these one to one clients and I'm going to launch out a membership and I'm going to grow that. Okay, so let's talk about that. The membership model, the one to many. And because a lot of people think, okay, I'm going to just create this membership and it's going to scale. But remember, mere membership model, let's say it's a hundred dollars a month, okay? A $97 membership and you can scale it, even a high ticket membership, right? A $500 a month membership. Okay, well to get to 10,000, which you want to hit those 10k months or whatever at $500, that's 20 clients, right? So you've got to look at, do you have 20 potential clients, prospects that you could put into some type of group program? And again, what does the group program look like? And how many hours are you spending with these people in these group programs? Right. Do you have for it? Because if you don't have the audience for it, yes, it's a scalable business model from a group perspective. Like I could take like fva, okay, I can add more people to it. It doesn't increase my time, so I can exponentially increase revenue, which will exponentially increase profit because it's not adding time to my calendar. However, again, it's only scalable if you have people, enough people in the program to make it scalable. Because if not, you now are charging a fraction of what you would charge for one to one, typically. Right? And now you need three people instead of one person to make the same amount of revenue. Yes, you're looking at hours, right. But again, it really looks at. Are you trying to scale your time or are you trying to scale revenue and profit? Because if you're trying to scale your time. Right. Well, yeah, go ahead, launch out that low ticket membership because it doesn't require a whole lot of time. Maybe it's only an hour to a month. Month, Right. But again, you gotta have people in it, right? So let me give you an example of this is like sometimes your most scalable offer is not necessarily your highest ticket offer. So I have Back Pocket Insights is free, the back the private podcast, completely free. But on the back end of that there is a Mastermind component to it. Once a month we meet, we mastermind, we talk about whatever. Maybe there was an episode that resonated, maybe there's something going on in your business. It's a true peer to peer Mastermind, right? It's $147 for a quarter. So that's like 47amonth, very inexpensive, high value, you get to meet and all the people that are in Back Pocket Insights, you have access to me to ask your questions, right? Like ridiculously good value for 147. Now people would say, like, Michelle, you're not making any money on that. You're right, probably not. However, look at it through this lens. If there's 10 people in there at $47 a month, that's $470 a month. Okay? I'm not doing much to promote it aside from promoting it in the places where the people already are. It gets promoted on the back end when you opt into Back Pocket Insights. It gets promoted in the emails and I mentioned it here and there on the podcast. Or if I have somebody that comes into my world that isn't quite ready for FVA and they need just a taste, I'll sell it to them. Right? But I'm not actively marketing it. It's not on my website. You're not going to see it anywhere. Right? So my cost are extremely low and I show up once a month. It's one hour of my time. So now for an hour of my time at 10 people times $47, I'm making $470. There's again, very little cost to it because it doesn't cost me anything but my time. I mean, zoom, which I'm already paying for, right? It doesn't cost me anything. So yes, that is a scalable business model. But again, if I don't have 10 people at it, and let's say I only have two people show up, well, now I'm only showing up for $98. Why would I show up for $98, right. When I could show up and take on a one to one client or put somebody in FVA for a higher ticket. Right. That's what I mean by these low ticket scalable offers. You've got to have the people in order to make it truly scalable. Because if you only have two people, even five people, $200, not terrible, but $200 for an hour of my time, I know I can make more than that in a different offer. So that's really, truly the definition of scaling. Okay. Right there. And if you scale too early, right. So if I launched out, if you launch out a lower ticket product and you don't have people, enough people to buy it, you will, it will cost you money. It's not going to increase your profitability at all. It's actually going to decrease your profitability and it may actually put you in the red. Right? Because now you're having to show up for something that doesn't even have a break even point, Right? So you've got to understand all of that and understand the break even point. This is what I dive so deep with, with all of my clients. This is the work that I want to do, that I focus on with my clients. Because this is the work that gets you. Like I said, that's going to get you past that 5k, that 5k revenue plateau, that 10k revenue plateau. You're not going to get there just by continuing to throw tactics at the wall. You' going to get there by just continuing to execute and take action. You've got to have a strategy to really understand, okay, do I need to scale my time? Am I looking to scale my time in this situation? Am I looking to scale my profit in this situation? Do I need to just let this grow for a little while? Right? Like you really, truly need to grow. And just because you're capped doesn't mean you're outgrown. Means that there's something off in your business model that you need to look at so that you can continue to grow. Okay? You have to be able to do that. And scaling right is creating leverage offers it. We've talked about this. But again, you can't do it if you don't have the people. And so many people. I'm seeing this over and over. I want you to hear me. I am seeing so many people launch scalable offers with, without the audience to support it and tanking their income. Okay, you can scale one to one. I know everybody says you can't scale to one to one. You absolutely can scale one to one. You can scale one to one through asynchronous support. You can scale one to one through VIP days, VIP weeks. You can scale one to one by simply reducing the number of calls that you're giving. Because not everybody needs a weekly call, right? Like there's so many ways that you can take your current one to one offer. It could be less deliverables because maybe you're over delivering. That's a huge growth stage problem of this. Like in the beginning you're giving your clients everything and then you come up against this wall because now you're over delivering for what you're charging. So then you look at like, do I raise my prices to compensate for what I'm over delivering on or do I have to pull back on what I'm currently delivering on? Right? So there's a lot of different ways that you have to really look at this. And it's not just about saying like, okay, I'm ready to scale. No, you don't. Like companies do not scale without proper foundations. If you go back to that example I gave you of that building, right, you've got this carbon footprint in the earth and they're building a building. They are not, they are not adding new levels, they're not adding new floors to a building that is scaling without creating foundation, right? Every single floor has a solid foundation and they don't just. And then they build that solid foundation, then they scale it, then what do they do? They scale it and then what do they need to do again? They build another solid foundation. Foundation and then they scale it and then they create another solid foundation, right? Every layer has these solid foundations. You don't just decide once, I'm going to grow this and then scale. You can't just put floor on top of floor on top of floor on top of floor. It will crumble. You can't, your business, anything, it can't hold that weight. So again, there is a massive difference between growing and scaling. And I want you, if your head is spinning, going, holy shit, Michelle. I feel like I've been trying to scale my business and now it totally makes sense. Sense why it's not scaling. I hear you. I got you. This is what I'm here for. This is why I'm getting loud about this because I'm so sick of hearing it in the online space and I'm so sick of people trying to do something that they're not quite ready for. And just because you're not ready for it doesn't mean you're any less successful. There are amazingly, super, incredibly successful people that never truly want to scale, okay? They are really, really happy in that growth stage. And I think that there's something powerful about that. But we're not talking about it because everybody in their freaking brother is overusing the word scale. Okay? So again, really looking at where you are right now, okay, if you are in growth mode, that's fine, but you will get capped by capacity. Okay? At some point, if you want to increase revenue and truly increase your profit, your take home pay, you will need to scale. But you are going to need to do it strategically because scaling oftentimes requires a different business model. And if you've never done that business model before, you don't understand that business model. You don't know what it looks like. You can't scale it, right? You can't set it up properly. All right, so again, this is exactly where the Focus Visionary framework steps in. This is how I help. And I'm, I'm now taking one to one clients. I have not opened up. So here's like, like just a perfect example for you. I have a scalable business program, F V A, the Focus Visionary accelerator, which you guys have heard me talk about on this podcast till the end. Degree is a scalable business model. We've talked about it, we've used it as an example. But I also want to continue growing my revenue, right? And I also am okay with taking on one to one work. And I know that I can grow my revenue profitably. You can still grow very, very profitably without literally getting into this scalable business model. And so I'm, I'm taking on one to one clients again. I have not taken on one to one clients in years. But I, I'm seeing a need for it. I'm seeing a desire for it. I'm, I am desiring that because this is the work I want to get deep into with clients. And this is like that nitty gritty, deep work that really requires somebody one on one having those conversations, analyzing what's going on. So again, you can do both. I have FVA that's over here. It's scaling while also simultaneously growing a different revenue stream. And when that revenue stream caps out, I will look at and decide do I want to scale that or do I have just one? You can build both. And quite honestly, that's my key in my ticket to sustainability is that you have one that's more in the growth. You have one that's a scalable and you build them both, but you can't build them both at the same time. Okay? I have built for almost a year and a half fva, right? I have, I have really worked hard to grow that to a place of scaling, and now I'm coming in and wanting to grow another revenue stream, right? So again, growth, more revenue cost and time increase. Scaling, more revenue cost and time decrease. Okay? Most of you are growing right now, all right? And before you try to scale, perfect what you have, okay? So if this episode resonated with you, please, please, please share it out. This is the message that needs to be had on the freaking online space in the streets of the Internet. Because this is what is truly costing people so much money and time and burnout and frustration and all the things. It's this conversation right here. So please share this. If you want to have a conversation with me, hit me in the dms. You, let's talk about it. We can jump on zoom, we can talk about where you're at. What's going on? Voice note me if you don't want to get on Zoom. I know a lot of people are anti Zoom these days. We can hit it in the voice, you know, you can DM me with some voice memos back and forth. But seriously, this right here, this episode right here, is what will get you to that revenue and profit number that you are looking to get to. You have to have this understanding. All right, I know. I will talk to you soon.