What To Do If Your Business Isn’t Growing

Okay, so it’s a never ending game. The theory of construction is a never ending game.

Yeah. Yeah. Because what is your bottleneck right now is going to reveal or give you the opportunity to experience what the next bottleneck is? Yeah. Right. Like, a lot of times, as entrepreneurs, we focus on solving the wrong constraint. We solve it out of order. Like, sequence is speed. If you solve everything in the right order, you unlock a lot of growth.

If you solve them in the wrong order, you spend years of feeling like you’re not making any progress, and you’re like, what am I doing? I’m just spinning my wheels. And then one day, when you finally unlock the right constraint, which is the next one, you have all this growth. So that’s what happens for a lot of people, but that only happens if you stick around into the game long enough to realize it. Yeah, but most people, they just get burned out. They get burned out because they’re solving the constraints in the wrong order. And I saw this because I was talking today, actually, I was talking to an entrepreneur this morning who, he runs a bottled beverage business, and they’re doing about $200,000 a year, very highly profitable business. But what they didn’t under, what they underestimated was how much demand there was for the product. So they had a six month supply that sold out in the first, like, two months.

So now they have four months where they have no product coming in. And so they’re cash crunched. They need more bottles, they need more production capacity, all of this stuff. Right? So you would look at this and very obviously say, hey, the next constraint in your business that you have to solve for is your working capital cycle. How do you get working capital into your business and maintain it so that you can have inventory coming in at the cadence that you need it? And then how do you get that back into the stores as quickly? Because you can’t. You can’t grow your business if you don’t have product being sold. Well, what was funny was I was offering my help in all of this. And he goes, well, dude, I can’t afford your help on this because all my money needs to go towards solving these things.

And I go, totally makes sense. However, earlier in the conversation, he had just told me that they had spent ton of money on an award winning, winning branding agency to help them with their new label and their new marketing campaign. Okay, so here we are with a business that has no product coming in. They have nothing to be sold. They’ve spent a ton of money on branding that wasn’t a constraint. Right. And this is typically what happens to people, is they only become aware of the constraint when it finally smacks them hard in the face. He should have seen that the working capital was the crunch and the inventory was the crunch well before they ever sold out.

They should have been solving this well before. And if they had, this would not have been the constraint, but instead, they had started solving the branding marketing constraint. In hindsight, that was never the constraint. And so you see this all the time with people. The reason their business isn’t growing is because they’re misallocating resources to solving and alleviating the wrong constraints until the big constraint is so in their face that it can’t be ignored anymore. And at that point, you’re usually in crisis management mode.

Okay. Okay. So then it sounds like that was actually a really fun story. So it sounds like the way you figure out your constraints sequentially, one is just sometimes experience, like, you just have to go through it. The other is logic. But the one thing I guess I wanted to ask here is, is there a framework you would suggest to someone to kind of help figure out that sequence? Do you have a framework?

Yeah, I mean, I think it’s just really helpful, generally, to think about the infinite loop of the customer journey. This is a diagram that I like to draw out for visuals, but I’ll try to explain it here. You think about the infinity loop, right? Sideways eight. And the bottom side of that is where we build awareness. Somebody comes into the marketing side of the funnel, they become aware of our product. From there, they go to consideration, which is they start to think that maybe I want to do business with you. There they go into conversion, which is okay, I am aware that you exist. I’ve considered your product, and now you need to convert me to sales.

That’s our landing page, our sales script, all that stuff, right? If we do this correctly, it moves to the onboarding process, because now they’ve purchased from us. Now we need to onboard them and deliver the product that’s getting them the results. That’s the activation phase. Then we move to retention, which is to cut down their churn, make sure that they stay in the system. We go to ascension, which is the upsell, and then we get them to advocate. We turn them into a referral source. Right? Now, if we do this all correctly, they will go through this journey around the eight and around the other side of the eight, and they’ll go right back to the beginning, where we upsell them or cross sell them to the Next Product. And now we build awareness.

Hey, did you know we also have this other thing? They go right back in the loop. Okay, so if you were to break this down of, like, this is really fundamentally, like, nine areas of every business. You look at it and you say, okay, if I was to ten x this part of my business right now, what would happen? Where would be the Next Constraint? If you ten x awareness for your product? Cool. The next constraint would be, how do I take that awareness and convert it? Oh, okay. I’m actually converting them very highly. But here’s the problem. What if you were to ten x your awareness and ten x your conversions? Could you handle ten X to the customers? Could you deliver to ten X to people? And you go, no, I couldn’t. Okay, well, we need a better system.

We need more people, right? So you just systematically look at each point and you say, what if we were to ten x this right now? What would break next? And whatever you say, the next thing that would break, you go, fix that. That’s the thing you fix next.

Well, I hope people really watch that. I don’t even have a business, and that was kind of genius.

Well, you go back to, like, the example of the lemonade guy, and it’s like, hey, dude. Okay, so if you’d been going through this process and asking yourself this question. He started working on the branding because he thought that he had an awareness issue. But if he had looked at the trajectory of sales for his business in the first couple of weeks that the product was out there on the market, he’d realize, oh, we don’t have an awareness problem. We are now going to have a fulfillment problem. He was on the wrong lobe. He was solving for marketing, for sales, when you needed to be working on fulfillment and operations. But he didn’t realize that he was on the wrong side of the load because he didn’t have a systematic framework for going through and saying, where’s the problem, the business? Where’s the actual bottleneck?