Thoughts on Scaling a Business

I’m not sure why, but for whatever reason, I have been in a lot of conversations about ‘scaling’ lately. 

Scaling, in the business context, is generally another word for growth. In a purist’s eyes, scaling is a specific form of growth where the revenues grow faster than the expenses required to support the growth by leveraging the existing platforms or infrastructure.

For any independent sales contractor, learning the fundamentals of scaling a business is critical.


Because if you want to create a business that has value beyond your direct involvement, scaling is required.

Our Experience with Scaling

Someone asked if I could put some thoughts about scaling on (digital) paper –– and below is the result. 

These thoughts are more of a curated ‘stream of consciousness’ lessons about growth, and not a step-by-step instruction booklet. Anyone who tries to tell you that scaling/growth is a series of repeatable steps hasn’t scaled anything. Each situation and individual is unique and thus, you need to view the thoughts below more as principles, and not IKEA-like instructions.

Finally, know that growing any organization is a series of trials (and errors), reboots, sleepless nights, stressful days, and/or ‘back to the drawing board’ moments where doubt and frustration are far more prevalent than vacations and awards. So, if you decide that aggressive growth is for you, just beware that the journey is not one with a map and final destination.


Building a Team

Scaling for an individual agent means building a team, building a lead generation system to feed the team members, and creating the administrative capacity to handle the increased volume.

You cannot scale a business at the top without the foundation built at the bottom.

“Gary Keller’s Million Dollar Real Estate Agent (MREA) is a great read for anyone who wants to learn the fundamentals of a real estate team.

Bear in mind that scaling the admin side first means creating expense without the revenues to cover the additional expenses.

Redundancy matters. Scaling anything as thinly as possible will eventually break. Build things in a robust way.

Lead Generation and Message

You have to get lead generation systemized –– which is both the easy and the hard part.

Broadcasting a message to a large audience is easy because the web has democratized the tools of delivery, making them cheap to buy and fairly easy to use.

Chris Anderson’s classic ‘The Long Tail’ is a fabulous treatise on the leverage offered by the web and how to broadcast a powerful message while defending your turf against the well-funded web behemoths.

But broadcasting a good message is quite tricky because a message that scales AND resonates is not easy to create. The broader the message, the less it will appeal to your target specifically.

You must develop a message that can penetrate through all of the other messages broadcasted by competition who have far larger budgets and better tools. In other words, there is no guarantee it will work as well as you expect.

It is difficult to create customized marketing at scale.

A ‘Cult of Personality’ message does not scale well –– and it won’t both attract AND RETAIN the type of talent you seek.

A geographic message does not scale well, either.

The Art of Niche

Scale within a niche.

A niche must have the following 3 elements in order to be a legit niche –– Definable. Reachable. Profitable. –– and two out of three is not a niche.

The best niches live at the intersections of your skills and your passion.

A niche being definable, reachable, and profitable is one the most enduring lessons I ever took from my favorite marketing professor in college.

You cannot ‘fake’ niche –– the audience can tell. You have to know your stuff in order to defend your niche.

You can attack multiple niches, but you must do so with thought and specificity.

Your niches cannot conflict.

Who Are You? And How Do Measure Yourself?

You need to select a metric to track your business and the metric you choose should reflect the personality of the organization you want to build.

You must not only select a metric that will best drive your decision making, you must decide how you can track it.

Can it be tracked through MLS –– Volume? Transaction count? DOM?

I have always found that when you track the quality of your work, the quantity takes care of itself.

Can it be tracked through your P and L –– Revenues? Gross Profit? Profit Margin?

Or is it harder to quantify –– Client satisfaction? Agent satisfaction?

Quantifying the qualitative is far harder to track, but it is more important than the quantitative.

The Mentality of Scaling

Scaling requires a new mentality –– you are no longer DIRECTLY in control of the user experience and you have to make peace with a loss of control.

Scale means you cannot touch 100% of the transaction 100% of the time, like you were accustomed to as an individual agent. Accept this as fact or burnout quickly.

Properly implemented scale means that clients will have a great experience without ever meeting you at all!

You cannot scale without a shift in how you approach your business. You have to let go and trust that others are better at it than you are.

You have to have a rapid response function available to handle problems that you didn’t know were brewing.

You have to accept the problems that come with scale.

You have to learn to teach and empower, not just to do it yourself or hope that your team somehow magically gets it right.

The Skills of Scale

Scaling requires new skills.

You need to transition from sales to management.

Real estate promotes its best agents and tries to make them brokers –– but offers ZERO instruction on how to do so. No other industry does this in the way that real estate does.

Abdication is not a successful long term management strategy.  

If you try to do both sales AND management, both will suffer and you will end up with the worst of all worlds –– all of the expense of a big organization and none of the people around to help carry the burden.

No one in real estate gets management training.

Other Random Thoughts on Scaling

If you start, you pretty much have to keep going. Scaling partially is the least beneficial thing you can do. You have to see it through.

Scaling means speaking (i.e. marketing) to people you do not know and convincing them that you are the person who can best help them. In other words, you need a powerful and unique message.

Failure is fatal if you don’t learn the correct lesson.

Stuff unravels at an insane rate of speed –– what takes years to build can fall apart in minutes. And the bigger it is, the faster it unravels.

You cannot be fearful of mistakes and successfully scale. But you also can’t fail repeatedly and not learn the correct lessons. If you want to scale, thicken the skin, but ditch the ego.

That which you work on today will pay you back at a later date that is well over the horizon.

Your critics will not see the connection between the work and the results and will question your efforts.

Invest as much as possible in ‘evergreen’ things (i.e. –– long life spans.)

If you invest in anything that has a finite life, your investment will also have a finite life.

A season is not a business cycle. Measure your results over longer periods of time to gain insight into whether or not you are succeeding.

The Most Important Thought on Scaling

The final big thought on scaling is –– in order to successfully scale, you have to work on the systems that fix the problems, not the problems themselves.