She thought she needed 22 new clients. She only needed 14 and $300

THIS WEEK'S MESSAGE

• Why the plan that starts with "more clients" usually multiplies you instead of relieving you
• The three numbers test, and the one result that takes volume off the table
• How one owner needed 14 new clients instead of 22, without adding a day to her week

Welcome back to Simply Rich Shifts. 🌴💸

Last month I had a consult with an owner who has done almost everything right. She has a waitlist three weeks deep. She hired four more people this year, and revenue went up because of it. She wakes up at five to take calls and works until ten at night, on and off, every day, and she has been running some version of that week for six or seven years.

A few minutes in, she asked me the question nearly every owner at this level asks me first. How many more people do I need to hire to hit my number?

I knew exactly why she asked it. When people are waiting on you, more capacity feels like the only answer, and she told me herself that she likes saying yes to everyone. So I asked about her week instead. One block of work she had been undercharging for was taking 40 hours of it, just under a full work week, and it was the lowest-paid work in her whole business. Every hire she added made the business bigger, and her week stayed exactly the same size.

That is the Misdiagnosis, and I hear some version of it on almost every consult. She arrives with a headcount diagnosis or a new-client diagnosis. More people, more clients, a bigger number. Underneath it is a delivery capacity problem wearing a new-client problem's clothes, and if ten clients signed tomorrow, she already knows whose evenings would deliver them.

I know this one from the inside. In 2010 I had a million-dollar franchise and 80-hour weeks, and the only advice anyone gave me was to work more. My franchisor's growth plan was volume. For five years my full-time salesperson and I networked to 1,000 people in my territory, running around like chickens with our heads cut off to see every one of them every month or every quarter. In 2012 I finally sat down with two neighboring owners and ran my numbers, and 80% of my revenue was coming from 200 of those 1,000. Eight hundred people had sent us almost nothing for five years. I stopped marketing to them. I felt guilty about it, and the revenue went up almost overnight, because my salesperson finally had time for the 200 who were sending us business.

If your plan for 2027 starts with the word "more," that is the first thing we test in a Scale Strategy Session. Book yours here →

The three numbers test

This is the part nobody teaches at this level. Before you decide you need more clients or more people, you need three numbers: what the business brings in, what it pays you, and how many hours a week it takes from you. These are the Three Target Numbers, and last month I walked a room of owners through them at Planning for Profit.

Then you run your plan for next quarter against all three, and the result tells you which problem you have.

If your plan passes revenue and fails your paycheck, you have a margin problem, not a revenue problem. As revenue climbs it is easy to get loose with spending, and two owners with the same top line can take home amounts that are $180,000 apart.

If it passes revenue and fails your hours, you are planning to buy the quarter with your life. I said that sentence out loud in the room and felt it in my own chest, because I bought three years that way.

If it fails revenue at your current price, something structural has to move before anything else will.

After the test there are only three levers. Price moves everything. Conversion is where a few points turn into thousands of dollars for the same amount of work. Volume is the one every owner reaches for first, and if your plan already fails the hours test, volume is not available to you.

Read that again. More inquiries, more consults, more clients and more hires into an undocumented business all run through the same calendar, and that calendar is already full.

She needed 22

One of my clients ran this math for Q4. To hit her number she needed 22 new clients in 13 weeks. Her hours number failed badly, and she saw it before I said a word, because 22 clients in her current setup meant working through the holidays.

So we looked at her services instead of her calendar. One service was eating her time and carried the lowest margin of anything she did, so she dropped it. Then she raised her price by $300. Same revenue target. She needed 14 clients instead of 22, and she was on track to hit her number without adding a day to her week.

Another client was right around the million-dollar mark when we pulled her conversion numbers. When she ran consults herself, 90% of her inquiries booked. She got too busy, handed consults to a team member she had never trained for them, and that number dropped to 48%. Nobody saw it because nobody was tracking it. We retrained her team member, and that was the whole fix.

Neither of them needed more volume, and both of them found that out from their own numbers.

What it looks like on the other side

When I sold my franchise in 2017, it was doing $3.3M a year on 16 of my hours a week, run remotely, in the top 9% of the network by revenue while I worked the least of anyone in it. It sold at the highest multiplier, and the reason was the 16 hours. Someone who is going to buy a multimillion-dollar business isn't looking for a job.

That is the cost the Misdiagnosis hides. Every hire you add to a business that still runs through you makes it bigger and harder to hand to anyone, including your own team.

THE AFTER, IN NUMBERS
1,000 people networked to, 200 sending 80% of the revenue
80 hours a week in 2010, 16 by the end
$3.3M a year, run remotely
Top 9% of the network, working the least in it
Sold in 2017 at the highest multiplier

A Scale Strategy Session is 30 minutes with me. We run your three numbers, find the one that is failing, and name the lever that moves first. If your plan for next year starts with a new hire, book it before you post the job →

Your room

The Scale Strategy Session is complimentary and it is one on one with me. In 30 minutes you will walk away with:

• Which of your three numbers is failing: revenue, paycheck or hours
• Whether you have a client problem or a capacity problem (it is almost always the second one)
• The one lever to pull first, and what it is worth to you this quarter

This is your room if you are at capacity and people are still waiting. If your plan for 2027 has a new hire in it and no system for that person to walk into. If you have done an amazing job getting here and you have hit the limit of where you can take it on your own calendar.

BOOK YOUR SCALE STRATEGY SESSION 

Remember to live your one life!

💗Sailynn...

P.S. Before you add anything this quarter, give ten minutes to three numbers: what the business brought in last quarter, what it paid you, and the hours it took. If your Q4 plan only works with more of your hours, you don't need more clients yet. You need a different plan, and that is what we build in a Scale Strategy Session.