23d • General discussion
Scaling Workshop Review
I wanted to take a few minutes and share one of my biggest takeaways from the Alex Hormozi Scaling Workshop.
Great event. More than anything, it really made me step back and look at our business differently.
One of the biggest questions we worked through was:
What does it actually take to become a great CEO?
A big part of it comes down to how you look at the business.
Are you looking at it as the owner/employee working inside it?
Or are you looking at it as an investor?
An investor looks at:
- Return on capital
- Profitability
- Where time and money are being wasted
- What creates the most value
- What the business should stop doing
- What decisions make the company stronger 3–5 years from now
An owner/operator can get much more emotionally attached to certain jobs, employees, equipment, customers, or even parts of the business that may not make sense anymore.
That doesn’t mean emotion is bad.
It means emotion cannot be the only thing driving the decision.
One thing private equity firms generally understand very well is FOCUS.
They want to know:
What does this business do REALLY well?
Who is the right customer?
What services generate the best return?
What distractions should be eliminated?
What can be systemized?
What can be delegated?
How do we make the company less dependent on the owner?
That really hit home for me.
A business can easily become an HVAC company that also cleans carpets, pressure washes houses, plows snow, sells firewood and does whatever else comes through the door.
Revenue goes up.
Focus goes down.
Complexity goes through the roof.
The better question is:
What are we exceptionally good at, who do we serve best, and how do we build more of THAT?
Then build the systems, processes, training and team around it.
The goal is eventually getting the owner out of the day-to-day work so their time can move toward bigger decisions:
New locations.
New equipment.
Acquisitions.
New markets.
Better people.
Better systems.
And yes, the business needs to make money.
That doesn’t make it heartless.
Profit gives you the ability to:
- Pay good people well
- Take better care of your customers
- Invest in equipment
- Create opportunities
- Support your community
- Build something that lasts beyond you
Being the cheapest guy in the market rarely gives you enough margin to do any of those things very well.
That was probably one of my biggest takeaways from the workshop:
Build the business like you intend for it to become valuable without you.
Not because you necessarily plan to sell it.
Because that is probably the healthiest version of the business anyway.
I have a pile of notes to work through over the next few weeks and I’ll share more as I apply them.
A strong business should create more than revenue.
It should create opportunity for the owner, the team, the customer and eventually the next generation.
More to come.
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Scaling Workshop Review
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