Does this sound familiar? You’re holed up in a tiny, windowless office, working away day and night just to keep your business afloat. New clients come knocking, and your excitement blinds you to the reality of your workload. You’re saying “yes” to more than you can handle. Sure, a business full of paying customers sounds fantastic, but without a solid growth strategy, what happens when you can’t keep up?
- Bad Service: Overwhelmed employees lead to mistakes.
- Lost Clients: Underserved clients will walk.
- Damaged Reputation: Word spreads fast, and soon you’re known as the business that can’t deliver.
The growth strategy we’re going over here comes from the book, The 3.3 Rule. The basic concept is you work up to three hours and then take a 30% break. For example if you worked the max 3 hours, then you’d take a one 1 hour break. Which is about 30% of the 3 hours you worked. Then you’d repeat the cycle. Breaks lead to increased productivity which enables you to get more done in less time.
What we’ll get into here is how to make the most of your work periods. The critical step that’s missing from a lot of other growth strategies is knowing what to work on. And you do that by establishing a baseline in 4 key areas of your business.
- Cash Flow
- Team Dynamics
- Systems
- Client Management
Most business owners don’t even realize what roadblocks they need to overcome, because they don’t invest the time to dig into their specific challenges. Identifying the issues you have in those areas and strategically picking one or two at a time to work on is the best sustainable growth strategy for your business.
1. Cash Flow
Cash flow refers to the movement of money in and out of your business. For your business to not just survive but truly thrive, you need some cash left over after paying your bills. Imagine a company that boosts its revenue by $500,000, but their net income hasn’t budged at all. All that hard work, and the business is no healthier!
So, what’s the takeaway? It’s not just about chasing revenue; you also need to focus on your financial health. You want enough net income compared to your revenue to keep your business strong. Here’s our formula:
Income – Expenses = Net Income
And to see how well you’re doing:
Net Income / Income = Net Income %
You can find your net income towards the bottom of your profit and loss statement. So, what’s your net income percentage looking like? If it’s on the lower side, it’s time to rethink your expenses or tweak your pricing strategy. A real growth plan doesn’t just focus on raking in revenue; it’s also about keeping costs in check.
Cash flow is more than just numbers; it’s the lifeblood of your business. Without it, even a solid business can crumble fast. You’ve got to ensure that more cash is coming in than going out. If your outflow is outpacing your inflow, you’re heading for a not-so-great situation.
Consider setting aside a cash reserve. This is your business’s safety net—a stash of funds to keep things running smoothly during lean times or to pounce on growth opportunities when they come knocking. Think of it as your company’s rainy-day fund—smart, strategic, and a whole lot of peace of mind.
Pay Yourself
Thinking about giving yourself a raise? Let’s tackle the real question: can your business actually foot the bill? To keep your paycheck healthy, we need to compare it to your gross margin.
Your gross margin is the number you get when you subtract the cost of goods sold (COGS) from your total income—easy to find near the top of your profit and loss statement. Your owner’s benefit is all your compensation wrapped up in W-2 income, guaranteed payments, and distributions.
To calculate your owner’s benefit percentage, just divide your total compensation by your gross margin. For example, if your gross margin is $250,000, your owner’s benefit should be around 50%. On the flip side, if you’re raking in $5,000,000, aim for about 10%. And remember: more revenue doesn’t automatically mean fatter paychecks! Don’t fall for that trap.
Evaluate your personal and business budgets regularly. Make adjustments where necessary and set clear financial goals for both. This will help you maintain a healthy cash flow while ensuring you’re not sacrificing your personal needs for the sake of business growth.
2. Teams
Let’s talk about your team—the real MVPs of your business! Without them, you’re basically running a one-person show, and we all know how well that goes…not great, right?
First off, take a moment to ask yourself: how much does your team really earn or save you compared to what you’re paying them? To figure it out, divide your total revenue by your team’s costs. And those costs? They cover everything from salaries and payroll taxes to benefits like health insurance and 401(k) plans.
Here’s a quick example: if one of your employees provides a whopping $375,000 in revenue for your business, but costs you $150,000, that’s a return on investment of 2.5! Not too shabby!
Your Hiring Growth Strategy
Now, a common pitfall is hiring out of desperation to boost capacity. This often leads to bringing someone on board without considering if they’re a good fit for your company.
What you want is Five-Star Fits.
As defined in the 3.3 Rule, a “Five-Star Fit” is someone who not only nails their role but is also a pleasure to work with and a fantastic addition to your team. If they ever mentioned leaving, you’d be pulling out all the stops to convince them to stay.
Keep in mind, as your business expands and you add more team members, those costs will climb. Not every hire will hit the mark, so it’s crucial to maintain a workplace where your team thrives. Invest in them, and you’ll see a true return on your growth strategy!
3. Systems
At the heart of every successful business are systems—it’s the engine that keeps everything running smoothly. Systems connect your team to your clients, ensuring that products and services are delivered on time, every time. Whether it’s how you handle customer service inquiries or how you track project deadlines, these systems are the backbone of your operations and critical to your growth strategy.
If you are not almost always delivering on time, then you’ve got a systems problem, not just a scheduling hiccup. That’s a red flag waving right in your face, telling you to refine your approach and get your processes in line. Gaps in delivery aren’t just a minor inconvenience—they can drive clients away and shrink your bottom line faster.
Here’s a tip: map out your process from start to finish. Break down each step and identify where things tend to slow down or get messy. Sometimes the problem is as simple as poor communication between teams or outdated tools. By pinpointing where the bottlenecks are, you’ll know exactly what needs fixing.
Remember, fine-tuning your systems isn’t a one-time job. It’s like tax planning—it needs to be ongoing, always improving, always evolving. So don’t just slap a band-aid on the problem. Get in there, make some real changes, and watch how smoothly everything runs when your systems are all working.
4. Clients
Delivering on time—or even ahead of schedule—is a solid way to keep clients happy. But let’s be real, not every client is one you want to keep. The key to avoiding unnecessary headaches? Managing expectations from day one.
If you don’t lay down the rules early, you’re going to find yourself in situations where clients are scratching their heads or straight-up frustrated because they thought they were getting more than they paid for. And trying to set the record straight when someone’s already annoyed? That’s a lot harder than just having the conversation upfront.
Managing expectations isn’t just about avoiding free work (though that’s a huge bonus). It’s about training your clients. We handle A, B, and C. You handle X, Y, and Z. This is included. That is not included. Getting this clarity at the start means fewer surprises and fewer misunderstandings.
So how do you manage client expectations? Do you only step in when confusion hits the fan? Or do you make sure they know upfront exactly what they’re signing up for?
Establish Your Baseline
Alright, it’s time to roll up your sleeves and get to work. Don’t be like those other guys who think about it for a bit and then forget. It’s time to take action and establish what we call your 3.3 Baseline. This isn’t busywork—it’s the foundation of your business’s future growth.
Here’s the deal, most business owners have no clue what roadblocks are holding them back, and it’s usually because they don’t take the time to pinpoint their exact challenges. Figuring them out is an investment—and trust us, it’s a good one. The return on taking this time? Pretty much limitless.
So, first things first: you’ve got to know your 3.3 Baseline!
