Every entrepreneur dreams of having an impact on the world. It’s one of the primary reasons we start businesses!
This desire to have an impact can manifest as wanting more money, more power, or more influence. But at the end of the day, all we really want is to change the world and (hopefully) leave it better than before!
But after years and years of toiling in our businesses, it feels almost impossible to fulfill those dreams. We see other entrepreneurs like Steve Jobs, Gary V, and many others achieve success, and we chalk it up to luck.
However, through research, experience, and a lot of trial and error, Scalable’s three entrepreneur executives (Roland Fraiser, Ryan Deiss, and Richard Lindner) have learned what it takes to scale businesses, and as a result, have an impact on the world.
They shared their insights at the Traffic and Conversion Summit in 2020, and today, we’re going to break down their framework for creating what they call “Scalable Impact.”
The Scalable Impact Framework
Simply put, the Scalable Impact Framework explains the three indispensable qualities any business needs in order to scale effectively: leveraged sales, bankable profits, and transferable value.
Now it’s important to remember that scale is not growth. As CEO Ron Carucci puts it in this HBR article, “Growth means adding revenue at the same pace you are adding resources; scaling means adding revenue at a much greater rate than cost.”
So while you might have the capacity to scale, you’ll continue to run up against your business’s inevitable plateau (also known as the Constraint Zone) if you aren’t targeting these three areas.
As Roland put it in his talk, “You need all three to truly create an impact.”
Let’s review each of the three qualities now.
The first, and arguably most important quality is leveraged sales—and the keyword there is leveraged.
At the beginning of a business’s life, sales are erratic. It starts with selling to your family and friends. Then you get one or two funnels set up and start selling to people you don’t know.
This is great, but if you want to scale, you have to have the ability to anticipate income coming in each month.
At Scalable, we call this building a growth engine. That is, an engine you can turn on and off anytime you need to increase your revenue. We call them engines because they can be replicated with different products, and still bring in measurable, leveraged sales shortly after launch.
Next, let’s talk about bankable profits.
The second quality you need to build scale in your business is bankable profits.
Remember, revenue is the money you bring into the business every day, while profit is the money you take out.
It’s one thing to operate a business that funds itself. But wouldn’t it be great if your business could fund itself and other new and exciting products and ventures?
That’s the goal of building bankable profits. Remember what CEO Ron Carucci said: “scaling means adding revenue at a much greater rate than cost.”
That means you need extra cash on hand if you want to scale without the help of banks or investors.
So, what about the last quality?
The final quality your business needs to scale is transferable value.
This is the one that most business leaders miss.
In order to build wealth and scale in your business, it has to have value outside of just you.
A good way to think about this is to ask yourself, “if I remove myself from the company, what other assets does it have that allow it to stand on its own?”
Investors sometimes call these “Value-Drivers.” They’re indicators that a company can still be profitable even if ownership changes.
This quality can be a hard pill for some leaders to swallow. After all, the business is your baby! You put your blood, sweat, and tears into it, so why would you want to separate your image from your business?
But the reality is, if the business only works when you’re driving it, you’ll never be able to focus on other projects without watching your business fall apart.
Now that you know more about the three indispensable qualities your business needs to scale, let’s talk about the effect these qualities have, and how they work together to help you have what we call Scalable Impact.
Creating a Scalable Impact
Each of the three qualities relates to one another in important ways to give businesses an edge, so let’s review…
Leveraged Sales + Bankable Profits = Momentum
With consistent income coming in, and profits set aside, you’re building momentum. That is, you’re increasing the speed and direction in which you can scale.
You have the money to grow new ventures, but your business only works if you’re working your butt off—Your time is enslaved to your business.
Bankable Profits + Transferable Value = Optionality
If you have profits set aside, and valuable assets in the company (outside of you), you’re creating optionality. That is—you’ve set yourself up to be able to sell off specific segments of your business or exit entirely if you’d like.
Unfortunately, you don’t have the consistency of predictable sales, so you very well could just be a one-hit-wonder.
Transferable Value + Leveraged Sales = Scalable
If you have transferable value and leveraged sales, you have a scalable business Your business works well and has a lot of value.
But you’re missing the profits, so you’ll never be able to have an impact outside of your business.
Momentum + Optionality + Scalable = Scalable Impact
If you want to have a lasting impact in and outside of your business, you need all three inputs.
Luckily, our own executives Ryan Deiss, Roland Fraiser, and Richard Lindner have created a mastermind program designed to help business leaders just like you scale your businesses.
In Founders Board, You’ll have access to 196 Primary Sales Accelerators, 36 Primary Profit Accelerators, and 26 Primary Value Accelerators you can use to build up each of the three critical areas!
You can take your first steps and find out if your business is ready for scale now. All you have to do is get your “ScaleABILITY Score.”