How to Create Stability in Business

Creating Stability in Business

How much do you know about the stability of your business? I mean really, what's the stability of your revenue, customer acquisition, or ability to not only keep growing, but to grow at an impressive rate?

Think about that, because anybody who's really been watching knows that we’ve had a pretty good run when it comes to business. Probably for the last decade or a little more than a decade. And if you look back in history and really study business trends, what you find is that there’s a cycle of decades (or every 10 to 15 years, there’s either an upswing or downswing in buying patterns and business growth).

So, I want to talk about stability in business, so when all hell breaks loose, or when the economy drops out, or when you can’t get employees to show up for work, your business is more likely to be one of those that keeps growing.

Because if you’ve been running a business without focusing on stability, which includes having a clear target, clear guidelines, and clear systems that help you keep growing through all the ups and downs, then what you have is like having a car that’s running out of gas. You may have a very fast car, but it is still running on gas.

And for those of you, like me, who have been in business for 30 years or more, you’ve seen this cycle several times. And it always follows some kind of big event in the world. It happened after 911, and it happened a little quicker after the market crash, and also after COVID, and now we have something even larger that’s happening globally.

What To Do, And Why?

I think, as business owners, it’s important that we make our businesses more stable now, before the end of this quarter, because every one of my companies, and every company I’ve ever invested in, has survived, and most thrived, through economic ups and downs because we were stable.

And hell, I watched so many other strong businesses or "fast cars" that were flying past me literally disappear because they weren’t stable. And a lot of them were friends of mine who thought they were immune, but when the economy changed (like it did during COVID and like it does every 10–15 years), they took a BIG hit.

And the sad part is that a few of them never made it back to where they were, and when I talk to them now, it’s like talking to a high school football player who never did anything else after high school. And every time you talk with them, they want to relive that big game where they threw the touchdown, even though they’re 40 years old now and have a job they hate.

No disrespect to people who don’t have GLORIOUS jobs, but definitely disrespect to somebody who has only achieved one thing in business and whose only happiness now comes from reliving that one thing over and over and over again.

What You Should Take from This

The biggest thing I hope you walk away with from this is how VERY IMPORTANT it is to think about how stable your business is right now.

How autonomous is it? How consistent is your growth? How predictable is your growth? Not just every year, but every quarter, maybe even every month. Are you growing in revenue, and the size of your audience, and the stability of your organization, and your profit?

Last year, I sat in on a team meeting at a friend’s company, and everyone there was complaining about how costs keep going up because their COGs were higher than they've ever been, and no one in that room (including my friend, who is the owner) could think about anything other than raising their prices and trying to mitigate drop off from customers who didn’t want to or couldn’t afford to pay their new prices.

What they didn’t think about, at least at first, was what their biggest current expenses were, like warehouse space, office rent, and their team travel expenses. big expenses that were really easy to reduce.

You see, stability is often less about new sales and more about being smart about your spending. Don’t get me wrong, we spend a lot of money on things that increase your sales, or more specifically, your customer acquisition, average order value, and the lifetime value of our customers, and on our team development, but we work hard to first have money for those things, and we do that often by saving a lot of money by saying "no" to most of the bullshit expenses that come our way, and by not overpaying for things.

Because I promise you, if my friend’s company had just raised prices, they would have temporarily been in a better position, but within 1 or 2 quarters they would have been right back in the same position and struggling for growth. But what they did was something every company needs to do at least once a year, and that’s shop and reduce expenses.

And it doesn’t matter if you’re a $100,000 a year company, or if your revenue is 1 million, 10 million, 100 million, or a billion dollars a year or more, at least every year, every company needs to reevaluate their expenses.

Before anybody gets into Club 28, which is our advisory firm, they fill out a form that reveals their expenses and all the sources of their revenue, as well as a lot of other things. And there are companies in the program that are doing a few million a year, all the way up to companies doing billions of dollars a month. And every one of them gets value out of that one form.

It's the same piece of paperwork that I fill out when I'm looking at potentially acquiring a company and I need to know their expenses, and their margins, and what everything else is.

?How Stable Are You?

What I find from the paperwork is almost always that most companies rarely understand how to properly track expenses. But when they get it, scaling a company becomes infinitely easier.

In my companies, we have data managers, and the people in that position save us a lot of money. And if you’ve seen any videos of mine, you’ve probably heard me say that the most important hires I've ever made have been a kickass assistant and a data manager, because my assistant makes me more productive and our data managers give me the most accurate numbers so I can make good, fast decisions, because no matter how much money we drive in, or how much we scale, if our expenses are left unchecked, then we’d never have enough net profit to grow... at least not at the rate we could.

Stability for my friend’s company meant managing their expenses, so instead of raising their prices, they reduced their expenses and became far more stable. And when their competitors were struggling, they grew past them.

So, how stable are you RIGHT NOW, and what are you doing to protect your business from the ups and downs, and at the same time, propel yourself past your competition?