Dangerous Scale
You may have heard us say this before, but there are WRONG ways to scale a business.
Chapter 2 of our book, “The Wealthy Consultant” puts it succinctly:
“Bad scale is anything that violates the safety threshold of the business… anything that blows past the natural ‘market cap’ of the business without proper protections.”
There are ways to make money inside of a consulting business that are so dangerous to the stability of that business, that they are undesirable.
They seem like legitimate means of scale. But, under the surface, they create pockets of instability and imbalance. These most often manifest as “concentration risk” – an organizational over-dependence on a single department, system, or person.
Concentration risk is such a brutal threat because it can provide immediate growth… but at the expense of future stability.
A business that is riddled with concentration risk is definitionally unstable and out of balance.
So, how do we:
- Eliminate those concentration risks and get back leverage?
- Put systems in place that help us avoid falling back into imbalance?
Let’s discuss.
The 3 Types of Leverage
There are all different types of leverage, but the three most important for installing into a growing business are the following:
- Financial
- Operational
- Brand
Let’s quickly define each of these and give examples.
Financial leverage, put VERY simply, is getting something you didn’t pay for. Examples include business credit, LOCs (lines of credit), and even mortgages (owning property with deferred payment).
Operational leverage is getting something you didn’t work for. Building out your team, hiring excellent VAs, or finding new and creative ways to use AI in the various processes that run your business are all examples of gaining operational leverage.
Brand leverage is getting attention you could never have accessed otherwise. This is when your reputation begins creating new opportunities for you without you having to directly work for them. Brand leverage is particularly powerful because a good reputation is one of the strongest examples of a positive flywheel. Once it starts spinning, the momentum increases with each revolution.
The goal should always be to layer in as many instances of these different types of leverage as you can while you’re in the building process – while limiting COMPLEXITY.
Simplicity will scale. Complexity is a never ending drag on your business (more on that here).
Example: Creating Stability Through Layered Pricing
Let’s take just one example – the price of your services and your client roster.
Most entrepreneurs have been taught that you launch your program at a specific price, validate it, then scale vertically.
This is fine for getting a program off the ground, but not thinking through the consequences of your pricing structure is a surefire way to land in a financial hamster wheel that lacks leverage.
A well-balanced business needs some volume for stability, but within that constraint, you want to layer up your clientele to create sustainable, scalable revenue.
🚫 1 client at $500k/year = risky
🚫 500 clients at $1k/year = overwhelming
✅ 300 clients at $1k/year, 50 clients at $12k/year, 15 clients at $50k/year, 2 clients at $100k+…
This layered approach ensures profitability, predictability, and strategic growth without burning out or putting all your eggs in one basket.
For example, our highest tier clients (Chamber) have access to practically everything inside of our business. No holds barred. From access to me and my team, to the top shelf playbooks we publish… all the way down to the front end products we launch – they get it all as part of their membership to our community.
But we also have lower tier options that unlock different levels of access to many of the same items at different price points. That way we get people exactly what they need, while allowing high-level action takers to get access to all of it if they so choose.
We purposefully spread out our client base and diversify our MRR (monthly recurring revenue) to add financial AND operational leverage into our business through our client roster.
For more on the exact strategy we employ for this check out The Revolving Price Method book and Automated Client Culture.
Steal Our Models for Balancing Your Growth
If you’re looking for practical ways to insert Financial, Operational, and Brand leverage into your expert business, the easiest way to get started is simply by copying our homework. We’ve spent millions of dollars and countless hours of refinement to produce the models we teach to our clientele. But you can access them at the ground floor right now with our book “The Wealthy Consultant,” available through us for a special discount!
