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Did you know that there are more than 500,000 new businesses started every month in the US*? Crazy, right? I’m pretty sure you want to be one of them or you wouldn’t be here, so stop procrastinating and start building now.

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Have a great day and be proud of yourself for taking your first step towards becoming a business owner 🙂


What Do Investors Mean by “Scalable Business”?

By on October 18, 2016

Before I get into the post for this week, I have to give a shout-out to the amazing team at Colombia 4.0 – Elkin, Ana, Ivan, Alex, and everyone else…thank you sooooooooo much for the wonderful experience! I was already in love with Colombia but you all reminded me why 🙂 It was an honor to be a speaker there and I hope I can get a copy of the video of my talk to share here on New Venture Mentor. 

Okay, now back to this week’s post.

Today I want to quickly discuss the idea of scaling up your business because I see a lot of new business owners get tripped up by this.

First and foremost, a scalable business is one that can maintain or improve profit margins as sales volume increases. A house painting company is not scalable because in order to paint more houses you need to hire more painters and you need to buy more materials so margins don’t really increase much with each new sale. A software company, on the other hand, is often able to scale quite well because you don’t need to add a new programmer every time you add a new customer so the cost per customer of your offering goes down with each new customer added.

A business that is looking to raise money from angel investors or venture capitalists needs to be a business that is scalable, that’s the only way the economics works. An angel or VC makes money when she can exit that company at a much higher valuation than she bought into it at, and that only happens when you’re able to scale. If you don’t have a scalable business, you probably shouldn’t waste your time looking for equity investments because they’re going to be nearly impossible to get.

It’s important to note, however, that when you’re first building your business, you may have to do unscalable things in order to build a scalable business, and that’s okay. For example, the founders of Airbnb initially went out door to door themselves to recruit hosts for their platform. Clearly, that’s not a model that could be scaled well. However, they needed to get that initial critical mass to prove their concept, so that unscalable activity of the founders knocking on doors and talking to people was the only way to get to the scalable business that they built. Ash Maurya has a whole post on this, which I recommend you check out.

So, do you need to build a scalable business if you want to have the next hot VC-backed startup? Yes. Does every single thing you do at every single point in the development of that business have to be scalable? No.

As you build your business, make sure you’re thinking about what your growth goals are and that you’re being strategic about how to get there. That will likely require some real consideration to be given to how to be scalable, even it means doing a whole lot of unscalable work in order to get there.

If you’re an aspiring entrepreneur, the best thing you can do for yourself is to just get started. Pick up my business planning ebook here to be guided through the whole business planning process for less than $5. More of a video person than a text person? Click here to try my ecourses instead.

Guest Post: Create Value For Your Business By Hiring A Small Business Consultant

By on October 11, 2016

It’s guest post week again and today we have Rachael Everly sharing her perspective on the importance of getting an outside perspective as you begin to build your business. Here’s Rachael: It’s an established fact that managing a small business


Understanding Top Down vs. Bottom Up Calculations for Business Planning

By on October 4, 2016

Today I want to talk about the difference between top down and bottom up calculations in business planning. When I meet with clients, much of our time is spent around crafting a business plan that sets the business owner up


Guest Post: How Your Small Business Can Benefit from the Unboxing Trend

By on September 27, 2016

It’s guest post week again. This time we’ll hear from Suzanne Vallance of Ferrari Packaging. Here she is 🙂 ***** The rise of e-commerce has led to more packages being delivered than ever before. In 2015 it was predicted that


The One Thing You Need to Win Customers and Investors

By on September 20, 2016

Today is going to be a short and sweet episode but I hope you’ll all take it very seriously because I want to talk about empathy. I know the title is a little click-baity but it’s the truth. In my


Guest Post: The Pros and Cons of Hiring Remote Workers

By on September 13, 2016

It’s guest post week again and today we’ll hear from Nathan Hirsch about the pros and cons of hiring remote workers to help you build your business: The Power of an Online Workforce In today’s increasingly web­ savvy world, business


How to Get Honest Feedback on Your Business Idea

By on September 6, 2016

This week I want to share an amazing tip for getting honest feedback on your business idea. When you’re considering launching a new business, one of the most important things you can do is get out there and ask everyone what


Guest Post: Thing Just Went from Bad to Worse…Hide Your Everything, Crypto-Ransomware is Here!

By on August 30, 2016

It’s guest post week and today we’ve got some advice on surviving the dangers of the connected world from David Share of Amazing Support: Once upon a time a cybercriminal would deem you a target if you had something of


Why You Need a Professional Wing(wo)man

By on August 23, 2016

Today is another quick episode because I want to talk about the importance of finding a wing(wo)man. As we all know, the wingman or wingwoman is the person that goes to the bar or the club with you when you’re


Guest Post: Avoid Past-Due Invoices by Using the Best Payment Terms

By on August 17, 2016

It’s guest post time again. This week we’ll hear from Wendy Dessler: Getting paid is one of the major reasons why companies get into business. For businesses of all types – and this is especially true for new small business