A Proven Framework to Unlock Sustainable Scale | Ep 49

0:00This is episode 49, and I'm excited to share it with you as it's a presentation I made in April of 2025 at my good friend Perry Marshall's equity summit. On it, I go over my sustainable scale framework and how I use it to consistently unlock growth in companies. This is the Bottleneck Breakthrough Podcast. I'm Josh Long, and this is all about helping you find and fix the biggest challenges in your business to unlock growth and profits that last.

0:37so i have slides you can get them i'll share all of it there's nothing that you need to worry about writing down a bunch of notes i will go fast so listen fast um you can ask lots of questions i'm find being interrupted. My goal is just to help you guys execute. I wrote a book called Bottleneck Breakthrough. A number of you have read it. It's focused on getting unstuck. Think of it as theory of constraints light for small businesses. When I came up with it, it was just the way my brain worked. If I find there's something hanging my company up, if I fix it, figure it out, delegate it, hand it off, growth happens.

1:21And so I found over time, there's just patterns in businesses. There's common bottlenecks at different revenue plateaus and that's what the book goes through. I'll give you a quick rundown of it. And then I'm gonna dig into something today that'll help you guys scale. So the whole basis of bottlenecks is there's some friction in your business somewhere. When I work with clients, the first thing that I work on is freeing up your time because you as the owner, if you don't have time, nothing is going to get done. There's no way to be proactive and get things unstuck. If you're running around here on fire, fire extinguishers in both hands, getting through the end of the day and not remembering what you got done.

2:01Anybody resonate with that? Anybody ever have those days happen, right? So the first bottleneck is always the owner's time. Next, getting to the owner's frustration. I love a Dan Kennedy quote says, if I wake up thinking about you more than two days in a row and you're not my wife, you have to go. And so I find that we build a lot of tolerance, right? Like we're tough. We endure. We're kind of psychotic being entrepreneurs. And so we put up with a lot of dysfunction. We tolerate a lot of dysfunction. And so when I sit down with an owner. I'm like, well, what are you frustrated about? Well, everything.

2:42My employees are flaky. Clients pay late. Such and such vendor, whatever. I'm like, okay, well, you make the rules. This is all make believe. So let's make it how you want it. Right? So like, let's fix this stuff. You don't have to tolerate it. Next, revenue. So I talk a lot about revenue plateaus. Most common one's a million bucks. At a million bucks, you need an operations manager. You need a little Napoleon cracking the whip, keeping the trains on time. Two million to three million, you need to move up market. Five million, you need a couple key managers. Ten million, you got to have an executive team, right?

3:23So at revenue plateaus, this is how we get unstuck. There's common bottlenecks that everybody faces at these revenue plateaus. Next, getting into your fulfillment. Is it running on time? Are you able to deliver on the promise that you're giving in all of your marketing? How many times have you had something you've bought where the salesperson or the marketing was like, oh my gosh, this is unbelievable. I need this. And then you get it to fulfillment. You're like, is this even the same company? Do they communicate to each other? Did I just get hosed? I call it the timeshare pitch, right? Like how many times have you heard of people buying a timeshare and you're like, oh my gosh, you get to sit on the beach.

3:59and there's like 8 ,000 blackout dates a year, right? Like, I mean, and you show up and the beds are like rock. I mean, so the fulfillment has to match what's being told on the front end. And then finally, communication. As the business grows, typically when the company gets to about two to three million, you as the owner need to communicate about 400 % more with your staff than you think you do. And know the conversations you have in your head don't count towards that quota. So you have to communicate more because people are no longer just within go-go gadget arm reach of you, right? You've got layers of management.

4:36You've got frontline employees that maybe don't see you for weeks on end. You may not know some of the people in your own company. All the more reason to communicate. So that's the basis of unlocking the quick and dirty of fixing bottlenecks in your business. What I want to talk about today is my sustainable scale framework. Now, this is focused on the revenue engine of your business, right? The things that make you money. We've got sales and marketing and then the systems of those sales and marketing. And yeah, feel free to take all the pictures. This stuff's on my website. You guys can get the deck.

5:11I've got a whole masterclass on this. You can go download for free on the resources page of my site. I give all this stuff away free. You just need it, have it, take it, whatever. So I'm going to walk you through the dysfunctions in businesses from the perspective of this framework, how to diagnose where you're at and then how to fix it. So ever see a company where the salespeople are doing everything? They're hustling and cold calling. They're creating proposals. They're closing the deals. They're doing the onboarding. They're making sure the payments are collected. They're even writing copy.

5:50They're doing messaging. They're doing everything, right? Well, that dysfunction for me is called high turnover because salespeople aren't meant to do everything. The business owners that are like, I just want a duplicate of me. I just want a carbon copy of me. I'm like, well, all you're doing is training your future competitors because if they're a carbon copy of you, they're entrepreneurial. They're gonna figure all this stuff out and then they're just gonna go do it and compete against you because you're not paying them all the money. So why would you put all that pressure on them? So when sales is doing everything, the dysfunctional behavior is high turnover.

6:27No salesperson is gonna stick around in that environment because they can go somewhere better with a better environment and make more money. Next most common I see, and this is a lot in the Planet Perry adjacent worlds of internet marketing, is where marketing gets really, really good and they find some place of inefficiency to take advantage of. And it's just a cash grab. I mean, we've all seen it. How many times, and I love Frank Kearney, he's a good human being, but how many times has that guy reinvented himself, right? Like how many different schticks has that guy pitched? Because he's figured out how to do marketing really well and grab a lot of cash and then disappear, right?

7:10And there's endless examples. So when When marketing is everything, marketing writes the copy, gets the leads, does the sales page, does everything, there's no sustainability because the market's going to leave, the platform's going to regulate, Facebook's going to stop giving you leads because they got in a pissing match with iOS. It's just a flash in the pan. So it's just a cash grab. Next, this is probably really common in Planet Perry. I call this where you've got the systems dialed, you've got the fulfillment, great and you deliver really, really well with clients, but you don't have a way to generate leads or necessarily close them really well.

7:52I call that order takers. You rise with the tide of the market. As the market goes up, you do well. As the market goes down, you do poorly. So the goal is how do we blend all of these dysfunctions? How do we find the balance here, right? Well, a lot of times we'll say, well, we need to just add a little bit more of something else. And so over here, we end up with marketing and sales working together. And you see this often where marketing is generating leads and sales is closing them, but there's no structure, right? There's no systems. There's no reporting. There's no segmentation. There's no follow-up.

8:25And we call that messy growth. I see that all the time where companies are growing with their hair on fire, but then they hit some plateau and there's no clarity around, well, what do we do next? Well, you need a report. You need some kind of tracking. You need some kind of communication with clients to get feedback. And so the solution on all of these is to pull the opposite direction of what's missing. So in this case, in messy growth, we go build systems. I'm giving you the answers. I'm talking about it, right? Like they don't have the systems. They don't have the CRM. They don't have the segmentation.

9:02Next, you'll see companies where they have some sales and some systems. And Perry and I had a client a couple of years ago. They were this, they were doing like 37 million, but they had no marketing leadership. They had no ability to go get in front of target clients. And guess what? They were doing 37 million and their net profit was 10%. Because the sales team was leading everything. It was just like chaos on a stick. The systems people were like, we're here to serve. We've got Salesforce set up. We've got all these reports, but this sales guy wants this. This sales guy wants this. and nobody was leading, like who do they target?

9:37So pulling towards marketing is the solution. They need somebody that's gonna say, look, here's our ideal client profile. Here's who we're going after. Here's their pain points. Here's the voice of the customer. Here's the messaging. Here's the deck. Here's the proposals that you sales guys have to keep using and have some structure, right? Leadership. Next, there's lifestyle business. Now, there might be a lot of you in here. This is a common planetary phenomenon. We have a great marketing and good systems and the business runs really well. And you can turn those into cash cows. The only problem is they stop scaling because you don't have a sales force that's talking to prospects.

10:18It's figuring out what's missing, what's causing prospects to not move off the fence or take the next action. There's no feedback loop. And so to take that lifestyle business and create some sustainable scale, you've got to add a sales component. So any questions on this framework? As you see it, as you think about where your business is at, I've got a bunch of questions coming up next on how to diagnose yourself. But that was kind of the rapid fire. All good? Great. So I do assessments. I have a background. I was planning on being a surgeon in a prior life. I worked in an ER and I saw that the best ER docs can diagnose what's going on really, really well, because they've seen these patterns over and over with patients, right?

11:10They figure out what is going wrong before they prescribe anything. And the worst doctors would just do test after test after test after test to eliminate like, well, it's not meningitis. Well, it's not strep. It's not whatever. And like this one doc I sat in with, he did more spinal taps than all the other docs combined. Now, I don't know if you've ever been in a room where a spinal tap's happening. They lay the patient curled up in a ball, like fetal position, and I'm typically the one holding them in that position, right? I'm low man on the totem pole, and he's on the other side coming from their back, their lower spine with a needle about that long.

11:54shaky hand trying to hit the bullseye right between the vertebrae so he doesn't hit a nerve, spinal column or spinal cord to get the fluid out to test it to make sure it doesn't have meningitis. This guy tested for spinal meningitis more than anybody I ever saw. It's like the case rate of spinal meningitis is like 0.01%, right? But man, this guy wanted to make sure you didn't have spinal meningitis. I was like, patients stayed forever. They got a bajillion dollars worth of tests because he didn't know what he was doing. So all the best docs I saw could narrow in and get like, okay, you're probably somewhere between herpes and some weird infection, right?

12:39Like they got there real quick and then they do some final assessments and then they make a diagnosis. Well, in the world of business, I don't see anybody doing effective diagnostics. There's a lot of prescriptions going on. There's a lot of solutions, a guaranteed model, right? I know this will work. I know this worked for us, right? I mean, Bob's laughing here because we've seen like eleventy bajillion things that we are guaranteed are going to work, right? How many of you guys have tried something that was guaranteed was going to work for you and it didn't work, right? There's a lot of prescriptions.

13:13Well, I call prescription without diagnosis malpractice, right? So you may be doing it to yourself. How many times you're like, oh, this isn't working. I know the answer. I'm just going to go throw mud against the wall and see what sticks, right? You're committing malpractice against your own business. So I start always with assessments. We have to get everything out on the table. We have to figure out where you're at. It's like Alice in Wonderland. I talk about this in my book. She's lost, right? She just is running away from everything. Comes across the Cheshire Cat, right? Cheshire Cat's like, hey, little girl, what are you doing?

13:58She's all, well, I'm trying to get home. Which way do I go? And he says, well, where do you want to go? She says, I don't know. And he says, well, it doesn't matter which way you go. And it's like without having some general direction of where you're at and where you want to go, figuring out what to implement is just guesswork. So with your sales team, here's an assessment that I go through. It's all basic stuff. Again, you guys can get these in the slides, but wrong button. First question I have when somebody brings me in to recruit or turn around their sales team. I say, do you have anybody making over a hundred grand?

14:32And you may be saying to yourself, I'm not making 100 grand. How's anybody else going to be making 100 grand? That's not for you. This situation is for companies that have sales teams, revenues there. There's money going around, money being made. But if you don't have a salesperson making at least 100 grand, I would say you don't really have a sales force. You have like a customer support plus team. You have people that are there taking calls, answering questions, and taking the easy ones off the table. but you don't have real salespeople because salespeople make money. Good salespeople make lots of money.

15:09There's good salespeople that make millions and millions of dollars a year. Now you may have judgments, you may have head trash around that. You may say, oh, I will never let somebody in my organization that puts pressure on somebody to close them. That's not what sales is. Sales is figuring out where the need is, where the confusion is, and working with them to get over that hump. And that's where, going back to the previous graph, the lifestyle business, so many lifestyle businesses don't get this feedback because they don't have anybody talking directly to prospects to figure out what the real objections are.

15:41They may say, oh, well, your price is too high. Well, is it really? Based on what? What are we comparing it to? What other alternatives are you dealing with? So salespeople make good money. So if you don't have somebody making over$100 ,000, you've got to figure out why. What's missing in your business model? What's missing in your comp plan? Do you have enough leads? How is that working? So then if you don't have that, has anyone ever made over a hundred grand in your sales department? Are sales staff lasting longer than a year? Because as much as we want to say, salespeople or enter, insert whatever other role there is, are flaky, don't work hard, Gen Z's lazy, millennials are entitled, whatever you want to make the excuses for.

16:26If you don't have people sticking it out at least a year, there's probably a problem in your business, your management, your leadership, your compensation, some way you're driving them away. Or maybe you have a bad sales manager, right? Anybody ever seen that? Like, Perry and I knew a client, guy who's like four or five million in revenue, oh, I need a sales manager. Guess what? Brings a guy in, abdicates 100 % of the responsibility to him. Guess what happens? Rollercoaster, rollercoaster, fraud, all sorts of horrible things. Has to fire the guy, drops down to 3 million in revenue because he thought for certain this guy was going to solve all of his problems.

17:04It's like, it's not how you run your organization. You don't just abdicate responsibility to some new person. Your sales reps have a reliable way to identify and reach out to qualified prospects, right? I love there was a story Perry told years ago of a guy who, I think it was the petroleum or nuclear engineer and had this great solution, but had no way to get in touch with the decision makers. Right. And Perry was like, well, yeah, there's a great solution, but you can't get ahold of anybody that'll buy. And so if, if you have, you may have like the cure to cancer, but if you don't have a way to get in touch with the decision makers, or you get blocked by insurance or you've got all these problems with your business model, your sales reps aren't going to fix that.

17:53So you have to have a proven way to get in touch with or have leads coming in. And then is there a manager or marketing person that helps create the presentations and content they share with prospects? Again, there's not relying on the salespeople to come up with all of this. Like we've seen so many times in clients where you get a wild variety of presentations, of messages, of things going out the door, contracts that have clauses in it that you can't fulfill on or you'd never approve? Again, is there some kind of oversight? And then do you know the close rate of each sales rep? Month by month.

18:29Now, I had a client recently where they said, oh, our sales rep's closing 50 % of qualified leads. I was like, great, that's awesome. How do you know they're qualified. Oh, that's what he tells us. I was like, well, how many other leads have come in that he says aren't qualified? Has anybody ever looked at those? Why aren't those considered qualified? And so again, nobody was managing him. They were just taking it at his word. And then finally do more than 50 % hit quota regularly. And you may be like, what the heck's quota? I don't want to manage that. I think this is where just some basic oversight, some basic management really goes a long way to helping you understand like, oh, do I actually have a sales organization?

19:16Do I not? Like Tony's a client. I've brought in a great salesperson for him and Tony manages his sales team fantastically. He knows the numbers. He has the leads. He's the marketing manager. He's getting the leads and he keeps track of all of those calls, how much revenue by week that these sales reps are getting. And of course, it's easy to upgrade a salesperson in an environment like that, right? So we come in and we replace his low performer. We assessed everybody. We looked at the performance. We replaced a low performer. How much of an improvement did the new guy in the last year make over the previous low performer?

19:53So year to date, he's up 50 % over the guy that he replaced. Five zero? Fifty five zero percents. And I think this year we're going to grow about year over year. we're going to be about 26, 27 % over last year. In a very tight, potentially declining market, right? Yeah. So this is, he's a great example of, we went through this, his reps are making over a hundred grand, he's managing, leads are coming in. We upgrade then, and the fruit is in the results, right? So thanks. Thanks for being a great shill. So your marketing assessment. So that's sales, we move over to marketing. is there anyone in charge of generating leads?

20:37Now you may say, oh, I've got this agency that does this, or I've got this freelancer that does this, or my assistant is in charge of this. Do they know that they're in charge of it? Do you keep track of it? Do they know what their goals are? Do they know what your ideal client profile is and where to find more of them? How many qualified leads are you generating per month? And again, who's determining whether they're qualified or not? Is it enough or do they come up short for whoever's in charge of this? Do you know how much your average lead costs? That's the most fascinating one for me is how many companies just have no concept of what it costs to generate a lead.

21:20Like Logan, you know your numbers inside and out. Like you've, you generate leads all day long. You've been doing it for years off the top of your head. What's your average cost per lead? Come on. I don't know that number as well as you think I do. Good. Well, I get to twist the screws on you then. What, what range would you say you're shooting for? about a dollar 25 yep for an opt-in lead yep yep and so that's a different criteria right he's getting building an email list that then he emails relevant information research education to over time and that produces long-term revenue over time right yep do you know what your return on ad spend is.

22:11Now, I'm going to say something that is really not going to be popular in this room, but Facebook has pretty much been broken for about three years. Most businesses that are just spending money on Facebook ads to generate a sale to make a profit are not getting that profit. And there's a lot of people that say, well, but my company keeps growing or my revenue is good. I would say that it's probably a loss and you're probably making up for it somewhere else. And profit is covering a multitude of sins. So do you know what your return on ad spend is? Most people don't. And it's really messy right now.

22:52Perry did an event last month, had a group of speakers and Scott Oldford got on and spoke and he's a really smart marketer. And he's doing some interesting stuff with regard to building media lists and selling newsletter lists and stuff. And he said a big company came to him and bought a newsletter list of, I don't know, five, 10 ,000 subscribers. Maybe it was 50 ,000. I don't know. Anyways, a good size list. And they said, we're buying this because we're getting this list, buying it cheaper than it would cost us to go build our own list right now. So media is all over the map and it's really messy.

23:29Do you know return on marketing expense. So ad spend is what you're paying to Google or Facebook or TikTok or X or whatever, Twitter. But your marketing expense is everything you're spending for content production, for your team, for your ad spend, everything else. Do you have any kind of perspective on that? So that's marketing. Then we get into systems. And this is the systems of sales and marketing, not necessarily all of your fulfillment. So do you have a, excuse me, CRM or email platform that all leads are captured into? I imagine most people here have something like that. Perry asked me years ago, it was about 2017.

24:12He's like, so what's the new shiny, sexy thing you're working with clients on? And I'm like, just making sure they're following up with leads. and he goes, you know, that makes sense. He said, John McGee was doing an audit of round table members, autoresponders. And I think he said something like 60 % of the members didn't even have an autoresponder set up. So just the basics, right? Do you have a CRM? Is it capturing leads? Are they segmented? Are you following up effectively? Do you segment them based on their qualifications and or behavior? So they may opt in for Logan has a wide variety of information that he's putting out there.

24:55So there's mindset stuff. There's performance improvement stuff. There's weird Chinese supplement stuff. He gets pretty esoteric, right? So you can segment based on those interests. So then he can follow up with things that are related. do you email regularly to nurture unconverted leads? Now in the world I live and I do mostly B2B consulting, help with manufacturers, help with service companies. And those businesses, when they've got prospects, they're all qualified. Like 95 % of the businesses I work with, the leads they get are completely qualified. They're able, they have the money, they have the need, they would see a benefit of working with my clients.

25:43So my philosophy on following up with them is they either buy, they die, or they install a restraining order. Like they're all qualified. Like there's no reason to stop following up with people. So as you think about your unconverted leads, there's some people that are like, oh, if we don't get somebody to buy within 30 minutes, they're dead to us. It's like, are you sure? Have you ever stayed in touch and seen? So what are you doing to nurture them? Are there templates for your sales team to use to keep leads engaged in their pipelines? Because if your salespeople are saying, hey, just checking in, seeing if you've made a decision, do you need a new proposal?

26:26That's not effective follow-up. Anybody been personally persuaded by that kind of follow-up? It's, oh yeah, you know what? I've I've been meaning to give you money. Thanks. I forgot. Right. No, it doesn't work. Right. So, and then do you use automations or triggered tasks or next steps in the sales process? So a lot of my clients end up using HubSpot. HubSpot has some really cool features in that you can have automations that then require a salesperson or customer support person to go do that and check it off before the automation continues. So it doesn't always have to just be email hammered like every other day.