Austin Brawner: What's up everybody? Welcome back to another episode of The eCommerce Influence Podcast. My name's Austin Brawner.
Andrew Foxwell: I'm Andrew Foxwell and we are here for part four of the scaling series podcast series on our podcast.
Austin Brawner: On our podcast. Nowhere else.
Andrew Foxwell: I just wanted to see how many times I could keep that going like the longest intro or title ever.
Austin Brawner: We are fired up. I'm real excited today because we are going into what we call growth mode, right? This is when we're going to be talking about people who are in kind of like somewhere between $1 and $3 million a year and up to like 10 to 13, $14 million, in that range. Again, that's kind of a sliding scale a little bit based on the size of the business and size of the market. But generally in that range, right?
The way we describe people in this range, they have got something that works. They have figured out some sort of arbitrage opportunity. They've kind of like maxed it out. They're typically feeling a little bit overworked at this point and they're trying to figure out how to get to the next level. That's that feeling.
They know they've got something that works, but they're tried to take it into a real business with processes and that sort of thing. That's kind of the range we're going to be talking about today.
If you're interested in listening to some of the other episodes, we've got again three before this. One is kind of the zero to launch range, which we talked about. Two, it's launched attraction, that's like a couple of hundred sales to a couple of hundred thousand dollars in sales per year. Then the last one is traction to scaling. So $100,000 up to a couple million dollars in sales per year. Today, we're going to be talking about growth mode.
So you can start with any of those. The scaling series here is designed to really touch on anybody who's building a direct a response, direct to consumer eCommerce business.
Andrew Foxwell: Yeah, exactly. I think what we're going to go through today is some of the issues that you have that we see in this growth stage. Then we're going to get into some of the solutions that we see.
So as we talked about this range of spend, or excuse me, this range of revenue, one of the things that we talked about right away was very common to see and go into a business like this and the person who is running the business or the person or the people that are running the business are overworked and they really don't have a team. They really don't have a support structure. They might a team, but they might not have the right team.
Austin Brawner: Yes.
Andrew Foxwell: So they feel like they're basically trying to do too much and no one can replace them. As we look at this issue, what are some of the solutions that you've seen or what... Let's talk more about the issue first.
Austin Brawner: Sure. I think the issue specifically is this idea, this superhero syndrome, right? Where they've built a business, they've built it up to something that's... It's an incredible accomplishment, getting to somewhere, getting to seven figures, getting into the low seven-figure range and they know the business inside and out. They know everything about it because they've been there through all the struggle and they have this feeling that they may even have tried to hire some people and it might not have worked out the way that they expected. Typically, someone will have a bad experience with an agency and then feel like, "Oh man, I can't offload this. Only I can do this."
That's what I kind of call a superhero syndrome. It's super, super common at this stage and I think it comes from the... What happens is that there are no systems for the growth, the growth has happened, but it hasn't been deconstructed to a point where somebody else can follow their structure and strategy.
Andrew Foxwell: Yeah. There there's really no standard operating procedures for things and there haven't been things written down. They've done them themselves. They've also not necessarily maybe set the expectations with that agency. There could have been a whole number of reasons that agency fails.
We'll talk about transitioning to an agency too as part of this maybe, but a lot of it is systems and those systems don't just go into the agency world. They go into everything that you're doing. Email being another example of systems. Inventory, customer service, or excuse me, customer service being another one of those systems.
What are some successful ways that you've seen people address systems from those two standpoints?
Austin Brawner: Well, I'll give a good example, which was we had had a client come to. Andrew and I hosted a two-day Intensive a couple of years ago and one of the people that attended there was in that low seven-figure range and they were trying to continue to grow and they were frustrated because they felt like they couldn't get help with Facebook ads.
Over those two days, one of the biggest changes they made was Andrew helped them restructure their naming conventions in Facebook. So they were standardized. What was happening was that they were really successful on Facebook, but it was entirely in their own head. The whole process wasn't outlined so somebody else could understand it. They were the only one, they truly were the only one who could understand it because they hadn't yet broken it down and really debriefed on what was working and made it into a format somebody else could then follow.
Andrew Foxwell: Yeah. I think that's actually one of the most powerful things that even we've done in our business this year is going through and saying, "Here is exactly what we do and how we do it on everything we're doing," and outlining that and then looking for inefficiencies. Basically, we had them to some degree, but not for every single thing that we were doing.
Austin Brawner: Sure.
Andrew Foxwell: That in itself was really big and I think-
Austin Brawner: It's freeing, it's very freeing.
Andrew Foxwell: Oh, it's freeing for sure. We see that with working with these clients as well. It's the same thing. They're at this stage. Just if you're at this stage or you're going to be there soon, write down everything that you're doing and the processes that surround it, and then look for opportunities. One of those opportunities might be outsourcing and hiring someone and hiring the right person for what they're actually good at.
Austin Brawner: Yes. So there's a bunch to unpack there because, one, you hear this as a business owner, do standard operating procedures, do SOPs, create these things. It is challenging. It can be very challenging depending on the type of person that you are.
There are certain people that are naturally more inclined to standardize things and they feel more comfortable. Often, those aren't entrepreneurs, right? Those people aren't entrepreneurs. Often, you got to where you are in the business because you are willing to experiment, break things and try new things and be kind of this courageous explorer in terms of marketing, and that's an incredible trait.
It starts to break down when you are hiring people to continue to push forward what you're doing. Obviously you want to hire people, you want to hire really creative marketers, but you want to have a foundation for them so that they can continue to perform at a really high level and experiment within your system versus just experimenting.
Andrew Foxwell: Right. Yeah. You have to get things out of your head on paper. I understand that it's hard. I completely get it, but that is since this whole time we're talking about scaling, this is a big differentiation point in terms of how people truly scale.
Austin Brawner: Sure.
Andrew Foxwell: Another one that's a challenge that people face within this range is inventory issues.
Austin Brawner: Yes.
Andrew Foxwell: Those are tied directly with cash and financing as well, just because you have to basically have more inventory on hand, and to do that you might need a loan or you might need more cash and therefore you might need financing.
Where I've seen this be an issue is people will under order because they're trying to be conservative or they have completely over ordered and then they get nervous beyond belief and start discounting like crazy and then tell the ad buyer, "Let's do a BOGO," and then it ruins all the progress you've made with the brand and then now you're a discount brand.
Austin Brawner: Well, let's break that down a little bit because if you're growing really, really quickly during the year, right, and this has happened to a bunch of my clients, they find some traction in like February, but typically their best time of year is Q4.
So they will go through the year and they're just hitting new high after new high every single month. It's really, really impressive because they've got something that works. Then they get to Q4 and they're trying to figure out how much inventory to order, and it's super challenging because they don't know how big it can be. So exactly what Andrew says, you either over-order or under-order and both those things cause severe challenges for you.
I mean, working with a client right now that they're growing so fast, they ran out of multiple products and that impacts everything in terms of their Facebook funnel because these are some of the bestselling products and now they can't achieve the same, they can't get the same results and now they're in, there's a little bit of a cash issue because they're not getting the same results that they expected and depended on from their previous experience.
Andrew Foxwell: Yeah, I think that's a big challenge and I've seen it happen a number of times, which is why we're talking about it. So solutions for that, I mean, solutions for this are, I think, doing and understanding really good inventory management.
I think if you asked a number of these D2C companies that are in this range, how do you feel about your inventory management or do you feel it could be tuned up? The answer's probably yes. When people ask you this question, where do you send them or where do you turn? I mean some of this is obviously in your community probably.
Austin Brawner: Yeah, there's some resources in the community. It's definitely not something that I feel like I am the most qualified person to give a take on. I think that usually what I'll do is I'll connect them with other business owners who are more experienced in that range and have had more experience going through seasons, right?
I think that the season, seasonalities are really important aspect of this because when you're growing fast and you're going through different seasons and before you really know the rhythm of your sales, that can be challenging as well. If you don't know that Q4 is going to be really big or you do know it's going to be big, but you don't want to believe.
Sometimes what'll happen is people will forget that seasonality is inherent in a lot of businesses and they're not yet comfortable that maybe one or two months might be down every year compared to previous, compared to other months.
So there's a freak out that happens when at the middle of the summer they're down on sales and when you talk to a more seasoned business owner, it's like, "Well, that's time of year that's always down. So it's okay. We'll focus on other things."
Andrew Foxwell: Interesting. Yeah, I think that that's good. It's kind of what we've been talking about where a lot of these companies that are "an overnight success", they really have been doing it a long time and understand the ups and downs and the seasonality of it.
I think a lot of what we're talking about too goes into, or it goes back to kind of what we talked about from the beginning, which is building a team.
Can you talk more about when you look at this, so you've talked to somebody like these clients, I mean, we share a couple of these clients that are in this stage now, you go in and it's chaos and everything from the ad account is not named properly to-
Austin Brawner: Email is confusing as heck.
Andrew Foxwell: Email is a problem, everything. What are the first few things that you're having them do? I mean, because obviously an outcome of some of it is building a team. But what are some of the things that you have them do? I'll talk about the things that we tend to do.
Austin Brawner: Sure. So one of the first exercises that I do is we'd go in and we take a look at what the one year vision should look like, right? So get a snapshot of where they are right now and then and say, "Where do you want to be in one year? What does your team look like? What are you doing?" Just kind of bullet out everything that is going to be involved in that business one year from now.
So you paint the picture, get a vision of that and then you just list out all the things that you need to do. That's kind of the first step. Or like let's go into those two things to get a better picture of where they want to go and what needs to be done over that year. So you can kind of start to figure out where some of the holes are on the hiring side.
Now, one of the big differences between, I think in this revenue range or this growth range, previously we talked about hiring for the stuff you're bad at, often when I'm working with clients at this point, it starts to move to hiring for the positions that they're good at, which is a totally different challenge, right?
If you're like a Facebook ads genius and you've built your business on that, well, it can be really hard to give up the reins and I see people approach it in two different ways. One, they're like, "All right, I can't do this anymore. I'm just going to give this to an agency and let them take over." That usually works out terribly.
Andrew Foxwell: Yes it does.
Austin Brawner: Because they don't spend the time investing in the agency to help them understand what has been working, because, and again, from a sales perspective as an agency, it's easier to say like, "Oh yeah, we can definitely take over and help you with this." They probably feel like they actually can, but there's a lot of institutional knowledge that comes from building an ad account up from zero to $10,000 or $30,000 a day, $10,000 a day in spend.
So there's that approach, which typically works out terrible. The other approach is that people will just continue to push it and be the bottleneck, right? They'll say, "Nobody can take this thing over," and they'll be the bottleneck in their own business and that's where I see another challenge there.
Andrew Foxwell: Yeah, I agree. I think when we start to see people come to us at this stage and there's issues, a lot of the things that we're trying to look at are there's technical things and then there's more strategic. Starting with the strategic things, those are really like, okay, what other channels can we introduce or what other channel can we introduce? I think this is a lot of times when people are in this range, they've built their business primarily on mostly Facebook and Instagram, to be honest, is the most common.
Austin Brawner: Yeah. Well, I think that's Facebook and Instagram or Google Ads. Yeah.
Andrew Foxwell: Or Google Ads. It's one or the other.
Austin Brawner: Depending of their demand capture, demand generation. Yeah. In our space, we typically deal with Facebook because those are the... I feel like a lot of the "sexier brands" originate and grow there.
Andrew Foxwell: Yeah, no, I agree. I agree with that. So it's really an assessment of, okay, what other channel can we introduce that's going to steady the ship a little bit in terms of scalability and growth. Then obviously what's the way that it's going to be handled.
I think the other thing strategically is, as Austin alluded to a little bit, which is the expectations and the clearness of what you're trying to do and how you want to handle the account if you're looking at an agency is a big one. So if you're in that stage of saying, "Okay, I do want to offload this, I want more of my life back," because when you're at that level of spend, Facebook ads takes over your life, I understand. Or SEM as well, I think. I mean, but I just am more familiar with the other one.
But with Facebook and Instagram ads, you need to tell the agency like, "This is what I'm trying to do, this is how I check on them. These are the things I've tested," and there needs to be just a lot of communication that first quarter to make sure that the agency's not spending money on things you've already tried or they're going in different directions.
A lot of times people will think, "Well, I've interviewed these people. I think they're good. I trust them," and you let them run and you don't necessarily even have a communicative thing of like, "Oh we, we did try that. Here's how it went. You can find it here." Right? The agency is always trying to beat your results internally and so, which is silly, so making sure that it's a collaborative effort, not a competitive effort, I think is really, really big.
Tactically, I think when people ask me a lot of like, "How much bigger can a channel grow?" Or they'll say like, "That's another issue. I don't know. I feel like I've topped out." We're looking at things like, where are you spending, do you have the ability to spend worldwide, right?
So once you get in the United States, north of 800,000 to a million and a half, two million a month, it's tough to sell something that is not something everyone needs like shirts or socks or something.
I think it's really a matter of looking at kind of their frequencies, what those look like, looking at can they sell worldwide. It's looking at, technically these are really nerdy thing, but things like a first time impression ratio, which is a metric on your Facebook ads. It tells you how many times have people seen it for the first time. We cover that in another episode, be sure to search for that.
Austin Brawner: Sure.
Andrew Foxwell: But that's kind of how we start to assess it in terms of like we feel like you've might have topped out here. You either need to introduce a new product line or something that's going to change the game for your Facebook ads.
Austin Brawner: Well, I think a couple of things I want to touch on there. First, just going back to working with an agency or transitioning from you being the person who's leading this growth channel to having somebody else take over, I think regardless if you hire an agency to do it or you hire somebody in-house to do it, you got to approach it the same way and think that you're going to be basically onboarding an employee and having them go through a two to three-month process of having them get up to speed, right? I've had clients who've gone through multiple false starts, hiring someone didn't work out.
But I've had a client who went and actually embedded with the agency at their headquarters. I went in there for three days a week for a month and a half working with their account manager, just to make sure that they were onboard, and their life changed dramatically because the agency was able to get up to speed just like it would be with an employee, right? If you hired an employee, you'd be working with them every single day.
That's how they approach their agency relationship and they're now happy after multiple false starts because they invested that time and it's always... This is where I think a lot of people can get frustrated because it starts to take longer to do things.
You're used to being the superhero that can wave a magic wand and make big changes in your business. Now, you're going to need to get other people involved to be able to take it to the next level, and get those people... Alignment becomes a lot more important, right? Rather than you just executing on something, it's like how do we set a clear vision for the upcoming three years, one year, 90 days and and narrow it down so that people on your team that you're hiring come in and they have clear expectations of what they need to do, whether or not they're being successful and if it's actually moving the company forward.
That can be super, that's so challenging, to get out of your mindset of being the executer, right? That's the person who can do, do, do, and now you're teaching and helping and your role is changing.
One thing I want to bring up on whether or not you're topped out, right, on a channel, I think this is a huge, huge, huge thing to talk about because if you are indeed, if you've reached towards the outer maximum of how much you might be able to spend in a specific ad channel, the people who are able to take it to the next level, the businesses who are able to take it to the next level, they're the ones who were able to find another winner, another winner.
That may be involve them outsourcing or offloading the work for the channel that's working and then diving back in and saying, "I'm going to figure out the next channel."
Andrew Foxwell: Yeah, I mean I think you look at the client we were referencing earlier, he has a survey after people purchase saying, "Where did you hear about us?" That reported something, was it like 8% of the purchases or 6% of them had come from TikTok and he had been paying TikTok influencers to rep the brand and that's a scale move in my opinion, right? Because-
Austin Brawner: Well, is TikTok a scale move or the idea of how to find another channel?
Andrew Foxwell: It's the idea.
Austin Brawner: Yes, exactly.
Andrew Foxwell: It's more of that thinking externally, creatively about how you're going to go about it.
I think another one that in terms of working the system to kind of scale more heavily is cross sell and upsell with this.
Austin Brawner: 100%.
Andrew Foxwell: You think about something like taking the customers that you have and if you only have one or two products, there has to be more that you're introducing.
Because you're not going to be able to scale if they're not repeat buying and they're not coming back. So that to me is another one that we kind of didn't mention as we go through this.
So we're kind of talking about the common issues are overwork, no team, people trying to do too much, they feeling nobody can replace them, needing the systems. There's usually inventory issues. There's cash and financing issues, the kind of topping out on a channel and there's no necessarily system for growth and kind of some of the solutions we talked about as well.
Austin Brawner: I think with the systems and talking about that, I think the most important thing and what I work with a lot of my clients to do right now is it's slow down to grow faster, and it's slow down, analyze what's working, figure out why it's working and then systematize the parts that are working, improve it and offload it, right?
Email is a great example, right? Because we talked about it in the previous episode that it's a really good time to invest in email and start turning it into a big chunk of your revenue. A lot of the people in this stage probably have email as a good chunk of their revenue. But you might still be involved in the email process.
The reason you're involved in sending email marketing out as a founder at this level is because you have yet to create a sandbox for your creative marketers to be able to play in, right? If you define what that sandbox looks like and you're like, "Well, we want to send eight emails a month. We want to provide two promotions. We want to provide content and something else," then you can give enough framework for your team to have a lot of success and for you to be able to step back and grow.
Andrew Foxwell: Yeah, I mean, I think you go back to what we talked about, I can't remember how long ago, it was six months ago maybe, on an episode we talked about, remember why you started this business in the first place. I see that all the time. People, I'm like, "Why did you start this?" They're like, "Oh."
Austin Brawner: Freedom.
Andrew Foxwell: Right. It's usually freedom. So that idea of, this isn't Austin and I trying to be Tim Ferriss Four Hour Work Week, but that idea of offloading is actually one of the most crucial components of what you set out to do in the first place, and offloading and that comes down to systems.
When you're growing, it comes down to systems that lead into quality people that are there, that are as good or better than you at what you were doing, that have clear metrics for what your trying to achieve, that are tied to the growth probably financially to some degree in the company, right?
Austin Brawner: Yes.
Andrew Foxwell: They are invested.
Austin Brawner: It's a simple number. It's tied to very simple numbers people can understand.
Andrew Foxwell: Tied to simple numbers. I think a lot... then being smarter about looking forward. When you're at this stage of growth and you're at the stage of scaling, it's really about not being the day to day manager of your business. It's about being this six month to one year to five year manager of your business and being the CEO.
That's what it really comes down to I think in a big way, because when we meet those people at the low end of the spectrum or right in the spectrum in scaling three episode, they are still doing a lot of it themselves and they just do not have the team members.
Austin Brawner: The beauty is the transformation that happens, right? The transformation. It's happened with many of my clients. They come in, they're completely overworked and they feel like they don't have the mindset that it's possible for them not to work this amount anymore. They feel super responsible for everything.
So after we work together to really break out what's working, systematize it, figure out what we want to move forward with, what's holding things back and then create a strategic plan for hiring, put those pieces in place and six months to nine months later, it's a totally different business and the person's in a totally different mindset.
Really, your goal through this period is to get to the level where you can be interacting with other business owners at that same level on a consistent basis and coming up with ideas so you can pass them into your team and help them execute them. That's the goal and that's the transformation that happens during this time for the successful companies.
Andrew Foxwell: Absolutely. Absolutely. Well, this has been I think a pretty good episode and it was nice to chat about it. So if there are questions that you have, you can always reach out to us and we look forward to hearing from you. Thank you very much.
Austin Brawner: If you're in this space right now, this is where you're at and you feel like it's very relevant, these are all my Brand Guild clients. I work with about 10, usually right around 10 clients in the Brand Guild one-on-one to help them grow their business and get through this stage. You can go check that out at brandgrowthexperts.com. Thanks for listening. Talk to you guys soon.
Hey guys, it's Austin. If you've been loving the podcast, you got to go check out brandgrowthexperts.com. That's where I work one on one with my clients to help them build faster, growing more profitable online stores. I've got coaching programs and workshops that we host all over the world.
Would love to have you come check it out. If you are a fast-growing eCommerce business or you want to be a fast-growing eCommerce business, you got to check it out. That's the spot for you. We go more in-depth than we do in the podcast with comprehensive trainings and coaching to help you scale up.
Check it out, brandgrowthexperts.com. See you there.