Page 99 - The 7 Day Startup: You Don’t Learn Until You Launch - PDFDrive.com

Building a Business That Couldn’t Grow

I’ve mentioned that my previous agency was simply unable to grow profitably.
You’d be surprised how many businesses are designed in this way. The model is
fundamentally wrong, and makes them impossible to grow. The numbers just
don’t add up.

Let’s think about what I would have had to do to grow my previous agency.

1. For starters, I would have had to get more leads. Since leads came through
face-to-face meetings and content, that would mean hiring a salesperson and
a content creator. Those two hires alone would have completely killed any
profit there was in the business. This wasn’t an option at any stage of the
business; I simply couldn’t afford to make the hire.

2. I could have increased the costs of my projects. That would have helped
short-term profits. However, high-cost, low-quantity sales are difficult to
scale. They would have turned the business into a higher-touch sales
machine and I would have needed salespeople. I know other similar
business owners who tried and failed as this is a huge risk. It was an
extremely competitive field, too, so higher costs would have probably meant
lower sales.

3. I wasn’t capable of managing any more clients, so I would have had to hire
staff to replace me. Clients had been trained to receive individual local
service, so I would have needed a local client manager. I did this at one
point and, of course, it killed my margins and was unsustainable.

4. I would have had to physically get through more work. The work was
complex. We had writers, coders, designers, project managers, and SEOs. I
myself did a lot of jobs including conversion optimization, copywriting, etc.
Some of that can be done with affordable contractors; some can’t. The
work’s complexity would require more project managers, which also would