5 Ways to Scale ANY Business

there are only five ways to scale how many people you can sell to for any business and I'm gonna give you all five and a framework to Think Through you can apply to any business you ever start for the rest of your life if you're not selling as many clients or customers as you want you might be able to fix that within just a few minutes if you don't know who I am my name is Alex Mosey I'm the founder of acquisition.com portfolio companies that is over 200 million dollars a year and I make these

videos because I want you to use as much of my free stuff as you can grow your business to three to 100 million dollars a year in revenue and allow us to invest in your business to scale beyond that let me tell you how I discovered this scaling framework a few years ago I went to this Meetup and to the businesses range between 30 on the low end and 250 million dollars on top line on the high end so everyone got there got up and shared stuff that was working well for them in their respective

Industries everything from phone repairs to solar sales to solar to a massive International MLM selling supplement so the experiences were super diverse so as I listen to each of the speakers and I was among the smallest in the room at the time one thing became really clear to me no one had any magic that I didn't have the two biggest observations that I had were that one people there had been in business longer than me doing the same thing there entire time that was a big lesson for me growth just happened as a consequence of

not stopping and steady consistent improvements over time that was my biggest first takeaway they've been doing it a long time they hadn't changed directions and they just been getting a little bit better the second thing is that they all attacked a much bigger Market segment than me in other words they had a much larger Tam an investing term for total addressable Market a lot of people who you could recently qualify to buy or things so in the beginning you want to Niche down so that's normal so if you're new it's normal to want to Niche

down that's always the advice for people starting out because it's much easier to attract a narrow field it's also easier to deliver to a very narrow segment you can talk in their language you can be exactly what they want over time though it's natural for a business to expand its scope and by extension its Market if you look at Apple for example they're not Niche Netflix isn't Niche it's just when it's a question of sequence so those guys sell to everyone and over time you start a niche and then you expand and so that's what

I'm going to talk about the five ways that you can possibly expand from a niche over a very long time Horizon if you build an enormous business you'll do all five of these scaling methods but everyone who's watching this you would only do one the first thing that you can do if you envision triangle this is the whole Marketplace is that you can go up Market what that means is that every segment has a higher or more leveraged version of its core Market if I were to sell it at hair salons I could go up

Market to multi-location chains or big National corpse or franchises that would be going uh Market if I sold a widget to small business owners like Salesforce did in the beginning over time they went up market and so they went Enterprise so they went to Fortune 500 companies the pros are the deals are worth significantly more and they churn far less of it because you're dealing with more sophisticated business owners you don't have non-payment issues the cons are they're harder to sell sometimes it takes six 18 months to close Enterprise deals so if you look at

Neil Patel what did he do he has SEO services but he makes his money doing it for Fortune 500. garyvee what does he do a normal agency business but he sells to Fortune 500 going up Market is harder but it pays off in the long run bottom line if you increase the quality of your customer you increase the quality of your company the second way to scale is that you can go down market so if I were selling the hair salons this would be selling to hair stylists if I were in gyms it would be

selling to trainers if I were in Cairo I'd be selling to the employees who work in the clinics if I went after small business owners it would be going after aspiring business owners or entrepreneurs or business opportunity Seekers the advantages of going down Market is that you never run out of customers they're always making new ones every day people float in and out of the market because they're not established they're more emotional buyers there's an ocean of them the downside is it's hard to build a recurring Revenue business from them they are not consistent they

don't follow through you have constant payment issues they change their minds and have in general unrealistic expectations because they're poor and they believe because 50 matters to them that it should also entitle them to you flying out to walk them through whatever it is in person every step of the way it is what it is you can try to educate them but for the most part it is the Avatar so the key to making it work in this market is having very strong marketing and sales it's less about the product in this sub segment because

even if you have an amazing product 30 of them go out of business every year because it's who they are so A friend of mine has a CRM that targets super small entrepreneurs small business owners and they have four percent monthly turn which is insanely high for a CR RM and like he processes all the payments everything and I was like where's your term come from he said 100 of my children comes from people going out of business or starting new things and so the bottom line is if you're better at marketing and sales than

you are at product and delivery going down Market might be a better fit for you in the beginning until you get better at delivery because you always have new customers to iterate and improve on and then you can make another move over time it's not going to make necessarily the most valuable business but it will give you a lot of iterations because there's just so many of them which brings me to the third move that you can make to scale your business which is that you can go to an adjacent Market these are markets that

often sell the same promise but deliver in a different way if I worked with hair salons they sell Beauty I'd go to nail salons as an adjacent market like who else sells Beauty that's a service based business that's brick order nail salon that would be adjacent they sell to the same Avatar that often wants the same thing and likely suffer from the same problems if I work with chiropractors I look at physical therapists as they likely have similar audiences with similar needs if I sold to gyms I could sell to dance studios Etc these are

all adjacent markets they're right next door the advantages of moving adjacent is that you can usually provide the same amount of value at as your first Market it's a slower expansion play because you go vertical by vertical but it allows you to extract maximal values you don't need to iterate your main thing or your core product too much usually it's just some lipstick and kind of a different wrapper since they suffer from more or less the same problems you just need to Market it a little bit differently using their language you need to find someone

from that new world that adjacent market and bring them in they'll have enough trench and Industry knowledge to help you bridge the gap and this often just comes from an enterprising from that space that sees your success in your Niche and says hey do you think it would work for me and gives it a shot makes the minor tweaks and then they figure out how to make your thing work in their market and then all you have to do is find a way to pay that person and then they'll help you unlock this entire new

category of Revenue and this can help double or triple your Market size just with one move the disadvantages are that this is a slower way to grow than the other ways and so you'll need more specialized knowledge to do it well that's why that person's so key so all the stuff you know about your industry you're gonna have to know that same depth about theirs or find someone who does it's a great way to extract maximal value it's a slow way to grow just not necessarily bad when you think about it long term because you

can keep copying and pasting the play vertical by vertical and that allows you to get the most amount of money per unit of effort it takes a little bit longer but it can also build an incredibly valuable company fourth way that you can scale which is going broader so we've got our triangle you go up you can go down you can go side or you can go broader all right so this means that you generalize all the things of your core product core promise across all verticals that solve the same problem so for example going

broader would be going from hair salons to Beauty in general that would include hair nails Aesthetics Meds by massage Etc are all encompassing so you'd put all the verticals together and then you generalize your language more and you go after them all that's the big pivot that would happen there core promise you expand the language and then it applies to all of them if I were in gyms I would go to fitness centers in general this might mean big box gyms micro gym Boutique Studios dance studio spin Studios martial arts all the different verticals in

one the advantages are that you can scale up faster this you can 10x your total adjustable Market overnight the downside is it's harder to provide the same amount of value so if we're comparing this to going vertical by vertical you have to generalize more it's going to be more templated so you're not going to be able to have the same depth of nuance as you could if you go vertical by vertical if you just go broader but you immediately have access to 10 times the amount of customers and so it becomes more like fill in

the blank than copy and paste the other downside is that you also now compete against every other person in all of those Industries so you widen your pool but you also compete against a lot more fishermen and many of them are more experienced and more entrenched than you you're competing against all the vertical players who are just doing that Silo as you try and hit all of this you have more customers but all your competition are better in their micro niches once you've achieved a certain amount of scale and expertise you may have earned the

right to go broader we'll say though oftentimes people go too broad too soon because they're not good enough yet they haven't really on the right how do you know when the right time is when you have made it work in the other verticals and you have champions in multiple other verticals that have used your services or your products across them and you have kind of case studies that demonstrate what changes you need to make and you know that you can generalize it while still providing pretty significant value to each of them then it becomes more

of showing multiple case studies of how it works in each of them so you still try and hit all of it at the same point but the overarching message is beauty industry Fitness industry investment industry bottom line if you want to go fast go broad but if you want to be good you're staying narrow for a little and scaling out Facebook started in colleges before expanding out the other thing is you can go narrower the way that you scale by going narrower is a little bit different part of that is the niching down component but

I'm going to explain a very different way of going narrower that ultimately makes you more money I like to think about this as becoming more specific so I actually wrote an entire chapter on this that got cut last minute for my 100 million dollar offers book and the chapters free on my site called your first avatar the basic idea is that you'd go from a small business owner to small businesses with thirty thousand dollars a month in revenue and at least two employees or hair salons with at least X clients y staff and Z Revenue

you get narrower and the idea is how do I increase the quality of my prospects without necessarily going up Market you're not changing the nature of your avatar you're just changing you're adding qualifications to them so I learned about this from the former head of packaging and pricing at Vista private Equity the quick story on this is that I was at this event guy got up on stage is that they would do a huge customer analysis of every customer of a company that they want to acquire and then they would do a fractal basically analysis

basically there's 80 20 they look at the 20 of customers that brought them the most money and look at the 80 that didn't and they would say how do we get more of these 20 and ignore these other ones and so look for the common character traits the channels around that 20 and say what if we just made all of our customers that 20 when they did that they're about a 5x a company without even having to incur significant infrastructure across Because the actual total number of customers didn't change dramatically and by doing that became

significantly more profitable and ultimately created a lot of value I learned that concept from him and that's where kind of this concept around going narrower comes from here's the process for doing this in your own business number one is you survey all your customers to find out what their stats are and what they like most about your services I go in depth on this step by step in that chapter two is you look at your best customers and the ones who spent the most and stayed longer number three you do a common factor analysis which

is just a fancy way of saying you see what they all have in common ideally you want to be few things as possible think two to five trades no more than five because each time you add a layer you narrow your target even more and so what you're essentially trying to figure out is who are my most qualified buyers who are the people who get the most value from my stuff step four Once you find that out you do two things you change all your marketing language to attract that specific Avatar who has traits X

Y and Z number two is you figure out what process they all went through to buy often they consumed certain pieces of content or they came in through a specific Channel might be SEO or might be a group or a Discord or YouTube ads or whatever it is these people consume this thing they go through this process they go through this Channel and then what happens is you reverse engineer the buying process to force every customer to go through that process and basically you make your best and most qualified customers Force the on-defense prospects to

become the higher quality prospects by reverse engineering what the best guys went through by accident except now you do it on purpose so the advantages of going narrower are that you can increase your prices and your profit significantly because remember we're now finding the people who we provide the most value to because you do in a real way provide more value to this sub segment and so you also stop wasting time with shitty customers you also have fewer people to compete against in this very narrow space and also costs you less to service fewer people

all of these things are good things for business especially on the smaller side that wants to just become more profitable so if that's you this would be a play often one that we start with some of our portfolio companies is like we can three or four x the profit of the business just by going narrow and getting very clear into the Avatar is here are the disadvantages you have fewer people to sell to which is significant but if you're not making 10 million a year or more then you shouldn't be worried about that if you're

not there then don't worry about that you just want to figure out who you provide the most value to and then Focus ruthlessly on serving that Avatar and that means saying no to people who aren't the new better narrow Avatar I mean saying no you have to know who you're not going to serve if you're starting out there's a reason they say to go narrow you can be laser targeted in your marketing and delivery and start to build a reputation for yourself which takes time think about this Elon started Tesla super expensive selling electric cars

to the rich and then once you get a reputation he went down Market one step and then he just created normal expensive cars right and then he went down to step again you reach the masses Zuck went college kids then he went broader Salesforce started with smbs and then they went up so no matter where you are you can scale up your tandem in any of the five ways that I just outlined and the number of people you sell to by going up Market by going down Market by going to adjacent Market by going broader

or we're going narrower or my personal favorite door number six which is just keep getting better at what you do and you'll ultimately make more money let me know in the comments which of those might be most valuable for you which one of those you think would be the next step for you most amazing keep crushing and by the way for that chapter I'll have a link in the description you can check it out often anywhere on my site in the email the first email we'll send it to