The Definitive Guide to Scaling Your Business

How To Grow Your Business Without Sacrificing Your Life

A step-by-step guide for business owners that want to experience true growth and time freedom.

From founder Jeff Hoffman and Maui Mastermind CEO David Finkel.

The information contained is this guide comes from over 20 years of experience building and selling businesses. It will benefit you to stay alert, take notes, and follow the action steps. When applied, these proven principals will change your life and give you time freedom, financial freedom, and piece of mind.

Day 4: Create Your Strategic Plan

Your strategic plan is the road map that directs your company’s focus to the fewer, better things that will allow you to dominate your market niche and create explosive growth.

It prompts you to look at the big picture. 

What really matters? 

Where are you committed to going? 

How can you meaningfully and accurately track your progress? 

Your strategic plan also helps you prioritize and intelligently allocate your company’s resources to their best advantage. 

Finally, your strategic plan helps align your team on the big picture so they can better manage their responsibilities and contribute more to the real needs of the business. 

A Better Path To Strategic Planning

Conventional wisdom says your strategic plan is where you write down your answers; that it is a fixed‑in‑stone plan to accomplish your key business goals. In theory this sounds great, even alluring—a simple document that contains the secret plan to marshal your resources and smoothly attain your goals. Alas, that’s just not how things work in the real world of business. If a combined 50 years of running companies has taught us anything, it is this: Your strategic plan is not a place for fixed answers, but rather it is a trusted process comprising provocative questions you systematically ask yourself as you iterate your way to success. It is not a one time exercise but a recurring activity you engage in with your business’s best minds to continually learn, evolve, refine, and, at times, radically re‑create your business.

Many companies write a strategic plan at the end of each year to serve as their map for the next year. While this is indeed a valuable intellectual exercise, the next time they see that plan is one year later. Imagine a football coach putting together a game plan for Sunday’s big game. At halftime they are down 28–0. Would the coach say, “Well, since we write out the plan for each game in advance, we’ll stick with the old plan for the next half. We can talk about changes next week”? Of course not. The best coaches make adjustments to their plans at halftime. They change their defense or adjust their offense in response to real world results. Your business should do the same thing. Schedule your own halftime, go back to the locker room, revisit your plan, and make ongoing adjustments based on the market feedback.

How do you maintain this dynamic balance? While there is no perfect, permanent answer to this question, we do have a working solution that has produced amazing results for our businesses, and for tens of thousands of business owners we’ve shared it with. Once a year (we suggest December or early January), go off-site with your executive team for a one‑to‑two day strategic planning retreat. Your assignment is to take a critical look at your long-term plan and examine the state of your business with the following questions: What are the current market conditions? What trends are coming our way? What is our business context? Are our key objectives still the right ones? Is our strategy to get us there still working? Once you know the state of your business and market, make any big-picture corrections needed. 

Every quarter, we recommend taking your executive team offsite for a half- to full-day session to revisit this plan and concretely map out the next 90 days. You’ll lay out your top three strategic priorities for the coming quarter, and write up a simple one-page plan of action specifying exactly what you must do that quarter to grow and develop your business. At the end of the quarter, you’ll repeat the process. At the end of the year, you’ll step back and do a fresh pass on your big-picture, long-term plan for your company.

The reason why this process works so well is because it prompts you to look freshly at your business every quarter while also allowing you and your team to dive deep into the execution and actually accomplish meaningful progress on clearly prioritized focus areas of maximal importance to your business. Without this clear framework, too many owners change their focus so often that their teams are left dizzy, feeling the vertigo of too much change, and frustrated because, just when they seem to be on the verge of really getting something big done, the owner shifted the playing field yet again, forcing them to abandon projects prior to completion and wasting hours of their effort.

Three Questions to Start Your Big-Picture Planning Process

Take out your notes from Day 3 clarifying your business context (your market, your competition, and your position). Working from those, here are the next three questions for you to answer about your current position that will help you define the highest-level view of what you are in business to do and why it matters. Take 10 to 30 minutes to thoughtfully answer these three fundamental questions.

Question One: Why is your company in business? 

This first question cuts to the heart of why you are in business in the first place. Often it helps to approach this from two perspectives: externally (your customers) and internally (your team). Externally: What is it that your customers really buy from you?

Internally: Besides just the money, what inspires you to show up to work each day?

What are your company’s external and internal reasons for being in business?

Question Two: What is your Singular Goal?

What is the one goal that you are mobilizing all your company’s resources to accomplish over the next three to five years? This is your Singular Goal. Another way of coming up with your company’s Singular Goal is to ask, “What business are we committed to build over the next three to five years?” Approach your answer two ways: quantitatively and qualitatively. Quantitatively: What does your future business look like in terms of things you can measure and count? What are your annual sales? Your annual number of transactions? Your market share? Your average sales per customer? Your gross profit margin? Your operating profit margin? Your retention rate of clients? Your sales per employee? Pick three to five of the most important quantitative ways to describe your future business. Qualitatively: What does your business look like in other ways that you can’t easily measure or count, but that still matter greatly? Who are your key customers? What is your brand? What is your market reputation? Who do you have on your team helping lead the business? Which markets do you serve? What key products or services do you offer? What impact do you have on the lives of your customers? What is your future role as the business owner? Pick three to five of the most important qualitative ways to describe your future business.

Here’s an example of what a Singular Goal might look like: By December 31, 2020, we’ve built Growth, Inc., into a thriving Level Three business with $24 million in annual sales and a 20 percent operating profit margin. We have deeply penetrated four distinct verticals, with no single vertical or customer representing over 30 percent of our business. We continue to grow at 25 percent a year or more. Of course, your Singular Goal depends on your industry, business model, and goals. The key is that you want to end up with a concentrated statement that describes the one target all of your team is focusing on helping the business reach. By the way, because you took 5 to 15 minutes to clarify the business you are working to build both quantitatively and qualitatively, you have just completed one more key component to help you reach that goal—you have drafted your enterprise-level scoreboard.

You now have a clear list of the key variables that describe your key business objective. These are the variables that you’ll measure at least quarterly.2 For example, looking at the sample Singular Goal we shared, you can see that for Growth, Inc., their enterprise level scoreboard would track: gross sales, operating profit margin, number of verticals they have penetrated and how deeply, percent of total sales each customer and vertical represent, and the company’s annual growth rate.

Question Three: What’s in it for you and your team?

If you accomplish your business’s Singular Goal and build the business you’ve described, what’s in it for you and your team? In other words, what would accomplishing this goal do for each of you? Obviously the financial rewards come easily to mind, but don’t stop there. What opportunities would accomplishing your Singular Goal create for your team? What kind of impact would you have in the lives of your customers and how would that directly impact you and your team? What kinds of cool new projects would it open up for you? What you’re trying to do with this line of questioning is concretely link the rewards and meaning of reaching your business’s Singular Goal with your and your team’s deeper drives and motivations. This is a great topic to bring up at a team meeting. Again, make sure you go beyond just the financial rewards to the other nonfinancial benefits that energize and inspire everyone in the company. If one of the keys to successfully growing your business is having a great team of highly motivated people, then the key to motivating those people is to make sure that you as a business owner know what your employees want out of their careers at your company as well.

Uncover Your Business’s Top Leverage Points

If part one of the planning process had to do with clarifying the big-picture view of your business, then part two focuses on spotting the biggest leverage points inside your business to help you accomplish your top goals. A leverage point is a place in your business where a small amount of effort yields a magnified return, and identifying them is one of the keys to scaling your business.

Conduct a “S-O-O-T Review”

A S‑O‑O‑T (Strengths-Obstacles-Opportunities-Threats) Review is a structured way to see where your business stands today. It helps you lay out the key landmarks from which to craft your company’s strategy to scale. Here are the four components to review about your company:

Strengths: Any strategy that you eventually choose must rely on your strengths. Keeping your company’s Singular Goal clearly in mind, what are its top five strengths to accomplish this goal?

Obstacles: Each key obstacle is a clue as to what next steps you need to take in your business. What are the five biggest obstacles that you see currently blocking your company from achieving its Singular Goal? When you look at them from this frame, obstacles become stepping stones to help you cross the gap from where you are to where you want to go.

Opportunities: Opportunities are where you win the game of business. What are the three biggest opportunities your company could pursue that could potentially help you achieve this goal? One guiding strategic principle is to put your best people and resources on seizing your biggest opportunities rather than fixing your squeakiest wheel.

Threats: What are the three biggest threats that could massively harm your business? Look at those things that, if they fell wrong, could literally put you out of business: a harmful market trend, a disruptive competitor, government regulation, or even the loss of a key customer or supplier. Your goal is to take simple, proactive steps now to mitigate these dangers later. There will likely come a day when you’ll either say, “Why didn’t I do something about this earlier when I had the luxury of time?” or “I’m so glad I prepared for this contingency.”

Find Your “Sweet Spot”

Your business’s biggest Limiting Factor is the single biggest constraint currently limiting your growth. It’s the one ingredient that, if only you had more of it, would allow your business to grow instantly.  The more precisely you can identify your Limiting Factor, the easier it is to effectively push it back. 

For example, if you say your Limiting Factor is “lack of sales,” you might come up with a dozen ideas to increase sales. But before you solve this, dig deeper and see if you can pin your Limiting Factor down more precisely. Is it the need for more leads on the front end? Perhaps your business has enough leads but instead lacks the sales capacity to effectively follow up on all the leads you are already generating? Or is it that you have plenty of sales staff, but lack a proven sales process so your sales team’s conversion is too low? 

As you can imagine, depending on your answer here, you’ll need to take an entirely different approach to solve that Limiting Factor. That’s why it is so critical that you narrow down your Limiting Factor to the most accurate kernel you can. While every business has multiple limiting factors, each has one Limiting Factor (capital L; capital F) that does the most to limit its growth in the here and now. 

Pushing back your biggest Limiting Factor is a major leverage point to grow your company. 

One key way to grow your business is to identify and push back your current Limiting Factor quarter by quarter. In the context of creating a true Level Three business, you need to build the systems, team, and controls to help you push back your Limiting Factor long-term. Doing this usually exposes a new Limiting Factor you’ll need to work with. 

It’s like lying in bed on a cold night with a blanket that just isn’t big enough. You pull it up to your chin because your chest is cold, and in doing so, leave your feet exposed to the cold. You curl up your feet under the cover and the blanket untucks from your back. Every time you push back your Limiting Factor so it is no longer your biggest constraint, you expose a new Limiting Factor to work on. 

Good! This is how you grow your business in a leveraged way—by focusing each quarter on pushing back your current Limiting Factor.

Once you’ve pinpointed your company’s current Limiting Factor, it’s time to pick the highest-leverage tactics to push this Limiting Factor back. We developed the three-part Sweet Spot Analysis Tool to help you do just that.

First, brainstorm a list of all the potential ideas you have to push back your Limiting Factor. Don’t settle for five or six ideas, push yourself to come up with at least 10, ideally 15 to 20, ideas. For example, if your Limiting Factor is a lack of sales capacity to follow up effectively on the leads you currently generate, your list of ideas could include: a better lead-qualification system to prioritize your sales efforts, hiring more salespeople, or creating a sales video to do some of the selling for you. The key is to push yourself to come up with as many ideas as you can that could potentially help you push back your Limiting Factor. The best way to come up with a few great ideas is to first come up with a potential list of a lot of ideas. 

Next, run your brainstormed list of potential tactics through two filters: the “Low-Hanging Fruit” filter and the “Home Run” filter. A Low-Hanging Fruit is a no-brainer opportunity that you’re almost certain will work. While it may or may not have a big impact, it is fairly straightforward to implement and you have a very high level of confidence that it will work. A Home Run, on the other hand, is an opportunity that if you hit it well and all goes just right, has a huge payoff for your business. Go through each brainstormed idea on the list and ask, Is this tactic a Low-Hanging Fruit? If it is, mark it with “LH” for Low-Hanging Fruit. Then in a second, separate pass, go through your list of brainstormed ideas and ask of each item in turn, Is this tactic a Home Run? If it is, mark it with “HR” for Home Run. What you’re looking for are those tactics that are both Low-Hanging Fruit and Home Runs; these are your Sweet Spot ideas, the highest-leverage choices to push back your Limiting Factor. Low-Hanging Fruit are easy to implement with high odds of success, and Home Runs offer big impact if they work. These Sweet Spots are the best tactics to focus your company’s resources on first. Finally, now that you’ve identified your Sweet Spot tactics, turn them into a mini–action plan of who does what by when.

 Pick the three to five strategic decisions that matter most to your company, and put them on trial twice a year. Here are the seven strategic decisions you can examine:

  1. Choice of target market. Who will you focus on selling to and who will you ignore? Which markets are the easiest for you to dominate? Cost the most to reach? Are the most profitable for you? Taking all this into consideration, which clients should you fire? Phase out? Refuse to take on? Aggressively court? Who should your customers really be if you want to reach your business’s Singular Goal? 
  2. Choice of product or service. Which products or services will you develop and promote? Which of your products have the best margins? The strongest competitive advantages? Are the easiest for you to scale? Which products or services should you eliminate? Phase out? Aggressively promote? 
  3. Choice of business model. How will you profitably charge for the value you bring to the market, and who will be paying for that value? Will customers buy a product or rent a hosted solution? Will you sell direct to your market or through a wholesale model? Will you use physical locations, mobile locations, conferences, or sell online? If you didn’t have your current investment in how you do things and were starting over today totally fresh, what business model for your company would most excite you? 
  4. Choice of pricing. How will you price your product or service? In relationship to your costs? Your competitors? The cost of your customer’s pain? Should you price with one large payment due up front or with an ongoing subscription fee paid monthly? Or offer long-term financing to your customers? If you have a limited supply of your product or service and strong demand, how do you use pricing to control demand? It’s all too common for business owners to have legacy pricing or pricing models left over from when they first opened their business. Back then, you often had lower costs since you were operating on a shoestring, and priced relative to your competition with the goal of being lower cost than they were. Well, that might have served you once upon a time, but does it still? If you were starting fresh with how you price and the payment options you offer clients, what would you choose? 
  5. Choice of marketing channel or sales model. What is the main means by which you market and sell your product or service? Do you use an inside tele-sales force or a field sales team? Do you use strategic partners who already have existing relationships with your target market as your main means to sell, or do you build your own marketing list? What marketing or sales channels are working well for you that you should scale? Which are ineffective and should be cut or phased out? 6. Choice of positioning and branding. What “parking spot” have you chosen for your company? What is your essential brand promise and your top three brand emotions? Is this choice of position and branding consistent with how you are perceived by your market? Is it consistent with your real strengths? If you were a third-party consultant looking at your business, what choice of positioning and branding would you recommend the company go after and why? 7. Choice of product pathway. How will your customer likely move through your suite of products or services? Which will be your “gateway” purchase? What is the desired flow of purchases they will make to optimally benefit from your product or service? How does this optimal purchase pathway relate to how you currently do business? What changes or adjustments do you need to make?

Choosing Your Business Strategy

Now that you have clarified the bigger picture, explored the biggest leverage points inside your company, and put your key strategic decisions on trial, it is time to pick the strategy that will help you best harness one or more of these leverage points to accomplish your big-picture goals. Here is a six-question sequence you can use to craft the best strategy for your business:

  1. What criteria would a successful strategy have to satisfy? In other words, what would a winning strategy need to do for you in order for it to work? For Thomas, a winning strategy would have to help him command a premium price by working with customers who valued his higher quality and technological capabilities, dominate a niche market that was large enough for him to grow 200 percent over a three-year period, and differentiate his value offering relative to any alternatives the market had.
  2. What possible strategies could you choose that would likely meet all or most of the above criteria? Brainstorm a list of all the potential choices you have. Thomas’s potential strategies included aggressively courting semisparkling wine producers and hard cider producers. Which of the potential strategies seems best suited to give you what you want while relying primarily on your current strengths? Remember that you are trying to win a gold medal in something, so always focus on the things that you and your company do exceptionally well. For Thomas, his strength was his technical advantage to not only bottle liquids, but also control the carbonation during the process.
  3. In order for this strategy to be successful, what assumptions would have to prove true? For Thomas, this included the assumption that consumers wanted semisparkling wines, and that he could manufacture these wines at attractive prices for the wineries that were his customers.
  4. How could you measure or observe this strategy in action to see if it is in fact working? What should you pay attention to that would provide objective data about whether your assumptions are true and the strategy is in fact working? Create a dashboard internally for your assumptions so that you can closely monitor whether or not they are proving true, or if adjustments need to be made. Thomas researched wine sales data to verify the upward trend in consumption and sales of semisparkling wines. He also test-marketed his carbonation bottling services to his customers, measuring the price premium he was able to command. 
  5. How would you know that your strategy wasn’t working, and at what point should you stop and choose another strategy? What is the stop-loss point that signals you’ve reached your threshold for investing in this strategy? It’s important to determine in advance what success would look like, and also what failure would look like, so you don’t keep investing time and money once you’ve hit your stop-loss threshold. 
  6. If you should hit that stop-loss point, what is your rollback plan? What is your plan B and even plan C to handle the contingency of your chosen strategy not working?

Applying Reverse Leverage by Saying No

The idea of “reverse leverage” is to say no to something ordinary so you can free up resources for better, more potent things. Considering your chosen business strategy, what activities or initiatives should your business reduce, discontinue, phase out, or avoid altogether? Actually list these activities or behaviors on a “Stop Doing” list. Every quarter, revisit this list, adding new items that might otherwise tempt you to squander your limited company resources.

Your Capabilities—Thinking Ahead About What Ingredients You’ll Need to Achieve Your Business’s Singular Goal

 Take five minutes to look at your capabilities relative to your Singular Goal. What are the positives, the needed capabilities you have currently that are strengths of your company? What are the negatives, the capabilities you don’t currently have but will need if you are somehow going to reach your Singular Goal? What steps can you take this quarter to enhance your capabilities so that you’ll be better positioned as a company to achieve your Singular Goal?

The Power of a Rolling, One-Page Quarterly Action Plan

The key to executing on your strategy to accomplish your business goals lies in the quarter. The quarter is the perfect unit of time to bridge your big-picture goals, which likely have a two- to five-year timeline or longer, and your weekly planning and daily action. It’s long enough that you can get meaningful units of work done that collectively bring you closer to your long-term goals, but short enough so that you can frequently course-correct and hold your focus. We want to walk you through a simple system to create your one-page quarterly action plan. Yes, you read right: one page! You’re busy, overwhelmed with competing demands for your time and attention—and so is your team. Your one-page quarterly action plan accepts this reality and lets you have a clear, visual anchor to hold your company’s focus true for 90‑day sprints. A one-page plan forces you to distill your key action items into a short list of prioritized demands that you can see in one whole place with a single glance.

Step One: Pick Your Top Three “Focus Areas” for the Quarter

Every quarter you’ll sit down and decide on what the top three Focus Areas for your business are for that quarter. You may decide that your Focus Areas are increasing your lead flow, improving your sales conversion system, speeding up your collections cycle, or making a specific key hire. Your Focus Areas are the three most important areas for your business to spotlight during the coming quarter. Sure, you’ll still have to “take care of business,” dealing with your normal operational needs to push the business forward, but your Focus Areas will pinpoint where you will invest a portion of your best resources that quarter because you know that these areas are what will really help you scale and develop your business. Why do we limit your company to three Focus Areas? Why not four or seven? Because too many top priorities means you have no top priorities. Ninety days comes fast, and if you spread your company too thin, you’ll find that you partially do more things instead of fully doing a few key chunks that actually produce value for your company. Not only is this a waste of resources, but it is incredibly frustrating for your team, who crave clear priorities and strategic direction. If you want, choose two or only one Focus Area for the quarter. Just make sure you cap your choices at three. What should you choose for your Focus Areas? Below is a simple cheat sheet to help you determine what Focus Areas to pick for your business for the coming quarter.

Focus Area One: Pushing back your current Limiting Factor. Your first Focus Area should be something that directly helps you push back your number-one Limiting Factor for your business. By definition, your Limiting Factor is the single biggest current constriction to growth, and hence it is a great leverage point. If you take concrete steps each quarter to push back your current number-one Limiting Factor, you’ll be putting your resources where they will do great good in growing your business.

Focus Area Two: Seizing one of your biggest opportunities. Your second Focus Area should be about seizing one of your company’s biggest opportunities. You win the game of business by effectively leveraging big opportunities, not by inching your way along accepting the status quo. That is why each quarter you should choose one of your biggest opportunities to invest some of your best resources in. Often some of the best opportunities will take more than one quarter to seize, and as such you may find yourself working on this Focus Area for several quarters.

Focus Area Three: Mitigate one of your gravest threats. As you uncovered in your S‑O‑O‑T Review, every business faces threats that could deeply harm or even kill it. That’s why for your third Focus Area, we recommend looking at your short list of the top threats facing your business, and picking one of those threats to mitigate this quarter. Maybe you can’t eliminate it completely in one quarter, but you can take definite steps to reduce your business’s exposure to this danger.

Step Two: Clarify the Criteria of Success for Each of Your Three Focus Areas

Now that you’ve picked your three Focus Areas for the quarter, it is time to clarify your criteria of success for each. What would you need to accomplish this quarter in order to feel successful in this Focus Area? Be ruthlessly realistic about what is possible for you to accomplish in 90 days. Generally we suggest you try to pick criteria of success that you have control over (or at the very least over which you have a great deal of influence). It’s important to look for criteria that are as objectively and quantitatively measurable as possible. When criteria are too subjective, you may reach the end of the quarter without agreeing on whether or not you succeeded. Also, we suggest that for every Focus Area you pick one “Key Performance Indicator” (KPI) to track. If you look to this KPI to determine your performance, you’ll know if your company is on track to succeed in this Focus Area (more on KPIs in chapter 11). In laying out the criteria of success for each Focus Area, not only are you defining what success will look like in this 90‑day sprint, but you now have a clear yardstick against which to measure progress as you go. Plus, laying out your criteria of success for each Focus Area before you map out your action steps provides clear clues to what you’ll actually need to do over the quarter. Most of your action steps are evident in your criteria of success.

Step Three: Lay Out Your Key Action Steps and Milestones for This Quarter

Now is the time to lay out the key action steps and milestones you need to take or reach to accomplish your criteria of success for each Focus Area over the coming quarter. In order to keep your plan to one page, you’ll likely break each Focus Area down into five to seven action steps and milestones. While your plan must be detailed enough to guide your actions, it must not be so detailed that you feel overwhelmed or lose yourself in the minutiae. If your quarterly plan creeps into 2, or 3, or 12 pages, you just won’t use it. We know this. When you have a one-page plan, you can easily keep a printout of it on your desk. You’ll refer to it each week to see what key steps you need to take that week to progress your business. And your team will digest and use the plan too. Of course, you can go into greater detail on one of your Focus Areas to help you plan better, but do that in a separate document and not your one-page plan. For each action step, pick a specific team member to be ultimately responsible for executing the step by a definite date. While you can have multiple people contribute to a specific step or steps, you need to pick one person who is tasked with the responsibility and authority to get that step done and done well. We say that this person “owns” the task. This sense of ownership is critical to your success. It’s hard to hold anyone accountable for missed milestones when it wasn’t clear who was really responsible in the first place. With this structure, the owner doesn’t have to do all of the work herself—she just needs to be responsible for making sure that it gets done in the best way possible within the company. Congratulations! You now have your first quarterly action plan. Here’s a quick recap of our strategic planning framework. 

Annually: Full Big-Picture Strategic Review. Is the destination still the same? Is your overall strategy working? What major adjustments need to be made? How is the world changing around you?

Quarterly: Strategic Execution. How effectively are you executing on your strategy? Is it still the best strategy to follow? What has changed in the world around you? What fewer, better things do you need to focus on this quarter to grow and develop your business? What tactical changes need to be made to best execute your strategy?

Weekly: Accountability on Deliverables. What three items are most important for you and your team to do this week? Did you get your items done for last week? What did you learn? Are you still on plan? What tactical adjustments need to be made? (We’ll have quite a bit more to say starting on page 209 about creating the best accountability structure to get results.)

Together, your big-picture strategy, quarterly one-page action plan, and weekly execution will give you and your team a powerful and comprehensive framework to scale your company. In the next chapter, we’ll share with you one more critical component (learning to read the world) to make sure your strategic planning doesn’t become complacent or anemic.

Action Steps – What To Do Now:

  1. Create your strategic plan including your big picture plan, your leverage points, your sweet spot, and your quarterly action plan.
  2. Continue to Day 5: Develop Your Core Pillars