Before we dive into why scaling to multiple 6 figures in a single month is actually easy, let’s first understand what scale is.

Scale: an increase in volume.

Scale is simply an increase in volume.

Scale applies stress to a system, and any problem in the micro will be amplified by the exponent of the scale.

Full breakdown of any online service based business

This can be broken down much more simply into just three categories

This means in order to have a successful business you just need to master 3 things:

- Acquisition (how you get people to know about what you do)

- Conversion (how you get the people who know about you to buy from you)

- Value Delivery (how you keep your promise to the people who bought from you)

How does this relate to scale?

This relates to scale because in order to have something worth scaling we must ensure these systems are functioning on a micro level.

This means can we even get attention?

Is our solution worth buying enough that the people who know about it will pay for it?

Does our hypothesis actually work and can we get someone results?

The hardest part is ensuring these processes work on a micro level, then scaling them is easy.

1. If you sign 5 clients, but you did so unprofitably (you paid more to acquire them and deliver to them than you made by them paying you)

Then you cannot scale as you will go into debt.

2. If you’re conversion process isn’t optimized to close a MINIMUM of 2/10 that enter your ecosystem…

Then you cannot scale as the percentage will just continue to shrink as you increase the volume that enters the system.

3. If you cannot deliver value to people effectively and many people aren’t satisfied with the service you delivery

Then once you scale to get 50-100 clients it will be a complete nightmare as everyone will be asking you for a refund.

The Irony

The irony is that most people think scaling is hard, in reality it’s actually very easy.

The hard part about business is just finding the certain conditions where you have something that can achieve scale.

Conditions such as:

• Service market fit (something people want)

• Supply & demand (typically more people want it than the available demand)

• Results (a product that gets results)

• Appointments (that show up)

• Sales (That don’t churn quick, refund or dispute

• Healthy profit margin.

However, once you meet these conditions the hard part it done.

I often like to say it only takes 1-2 sales to prove a hypothesis.

Once you have proven that you have something that people will actually pay for, all you have to do is increase the volume you are putting in to get more clients.

For example, if you spent $100 bucks on paid ads and made $1000 you have achieved a 10:1 ratio and acquired a client profitably!

Now you just need to increase the amount you are spending to get more clients.

How scaling works

Let’s say this time you spend $1000 on paid ads and now you make $9,000

You may be wondering why did our 10:1 ratio turn into a 9:1?

This is a simple law in economics known as the Law of diminishing returns

This just means that if you keep increasing one factor in your production (such as your ad spend) while keeping all other factors the same, you'll reach a point where additional increases of ad spend actually result in a decline of output.

How to defeat the Law of Diminishing Returns

Since this is a “law” of the universe it means it is something that is guaranteed to happen that we cannot avoid, however there are things we can do to make the decline less dramatic.

Here are a few options:

How can we now reach a lower CPA again at a larger scale?

1. Create different types of creatives

When you spend more money, you begin to reach new audiences

Not every person reacts to the same type of creative.

A few examples:

Some people buy more from image ads than from video ads.

Some people like close up product shots, some people like emotional UGC videos, and there’s much more.

2. Introduce new audiences

Another way to combat declining ROAS is to introduce new audiences.

You might want to try 2% Look A Like Audiences, Bigger Interests, or just Broad Targeting (Just age and gender set)

Different/Bigger Audience = Different/More People To Reach = Not only 1 Audience has do the heavy lifting = Cheaper CPAs overall.

These 2 strategies, are in my opinion, the easiest way to combat declining ROAS when you’re scaling up.

Though, there are many more. But going over them in this post would take too long.

With that being said, hope you enjoyed this one

-Toussaint