Scaling Business for Management Consultants & Managers

Scaling can mean a lot of things. For some, it is simply growing sales. For others, it will be around scaling profit. In this section, we will discuss what we mean by scaling the business.

Let’s start with a short definition. By scaling we mean:

• The process of increasing significantly the profit, in a sustainable way

• Scaling should be done by design and not rely on luck

• For most cases, we will look at increasing EBITDA

• Scaling usually will require scaling not only sales but also other areas

There will be 3 areas that you have to scale to scale the profit: Operations, Sales & Margin, Recruitment, and Training.

What can stop you from scaling? There will be always something stopping you from scaling. In other words, one of the areas will be a bottleneck

Let’s have a look at how a beer producer can scale the business and eliminate the obstacles, and limits that may appear during this process.

In this lecture, we will discuss the solution to the case study.

Different firms, industries have to concentrate on different areas. Let’s have a look at some examples of what is the main obstacle for different types of firms.

In every company, you have bottlenecks that limit your ability to go forward and deliver more goods and services. Here I will show you how to estimate what is the impact for the whole system and how you can remove improve them. I will use a simple production example to show you the effect on the whole system. You will see how the bottleneck can shift from 1 shift to another. You will also learn how to prioritize where it makes sense to invest to get the best results.

Before doing this lecture I strongly encourage you first to take the OEE lecture – we use the OEE concept here so if you are not familiar with it please start with the OEE lecture as a warm-up.

In the previous lectures, you have learned the concept of OEE & Bottlenecks. In the next few lectures, we will use those concepts to remove bottlenecks, increase productivity, and  as you may have guess generate more money

We will first start with a case study of a content marketing agency

Later on, I will show you how you can apply it in a production firm as well.

Enjoy the case studies and as always if you have any questions just let me know

I am always happy to help :)

Your friend Ivan works in a content marketing agency and wants to improve the work of his team. Help him by using the bottleneck framework

In every company, you have bottlenecks that limit your ability to go forward and deliver more goods and services. Here I will show you how to estimate what is the impact for the whole system and how you can remove improve them.

Now imagine that you were asked to increase the production capacity of a factory. Try also to calculate the financial impact of the proposed scenarios. Before we look at specific scenarios we have to discuss 2 issues

• What the production capacity depends on?

• How to calculate the monthly production capacity

First, let’s see what the production depends on assuming there is just 1 production stage

We said that the production generally speaking depends on 3 drivers. Now let’s see how it looks like for the whole month

Here we will discuss the scenarios that we will analyze later.

Here we will discuss the scenarios that we will analyze later.

Here we will discuss the available data that we will use to solve the case study

In every company, you have bottlenecks that limit your ability to go forward and deliver more goods and services. Here I will show you how to estimate what is the impact for the whole system and how you can remove improve them. I will use a simple production example to show you the effect on the whole system. You will see how the bottleneck can shift from 1 shift to another. You will also learn how to prioritize where it makes sense to invest to get the best results.

Before doing this lecture I strongly encourage you first to take the OEE lecture – we use the OEE concept here so if you are not familiar with it please start with the OEE lecture as a warm-up.

In this lecture, we will see how you can present the result of the analysis in a form of graphs

In this section, I will show you what process you can use to scale your business more efficiently

In this section, I will show you what process you can use to scale your business more efficiently.

Let's imagine that you have to create a plan for how to scale the burger business. Using information from previous lectures, prepare the draft.

In this lecture, we will discuss the solution to the case study.

In this lecture, I show backward thinking /induction. This approach enables you to design the whole process, company on the basis of the expected outcome

Let’s try to put the backward reasoning to practice. In this case study, we will use it to decide what effort has to be done to 10x the current business. A few information about the retailer

• He has currently 100 stores. Each store sales are equal to EUR 2 M

• He wants to 10x the business up to Year 5

• Estimate what LFL growth he must get and how many stores he must open

• Assuming EUR 1 M per store estimate the Capex

• Estimate how many people he has to recruit assuming 6 people per store

In this lecture, I will show you how to solve the case shown in the previous lectures 

In this lecture, I will show you how to solve the case shown in the previous lectures 

In this section, we will discuss how you can Scale Sales & Marketing. You will also see how famous firm like Amazon has scaled their business.

Here I will show you the general framework for increasing sales in FMCG

Here I will show you the general framework for increasing sales in retail.

Here I will show you the general framework for decreasing the costs in retail.

Here I will show you the general framework for increasing the margin in retail

Imagine that you are working for a cosmetics producer. And you have to increase his profitability. 

In this lecture, we will solve the previously introduced case study

In this lecture, we will solve the previously introduced case study

Imagine that you are working for a fashion discounter that operates a retail chain in Eastern Europe. In this lecture, we will find ways to increase the profitability

In this lecture, we will solve the previously introduced case study

In this lecture, we will solve the previously introduced case study

Let’s see how Amazon has scaled Sales & Margin.

Let’s see how beer producers have scaled Sales & Margin.

In many cases, the firms have to be very creative when it comes to Scaling Operations. In this section, we will look again at frameworks and case studies.

Let’s have a look at the scaling operations framework

• Improve the efficiency of existing assets

• Add assets

• Change technology

• Add partners

• Add products that require less assets

Let’s see how Amazon has scaled its operations

Beer production is dominated by 3 groups: Heineken, Carlsberg and AB InBev. They have used similar tactics in scaling operations.

Now let’s see how meat producers scale their operations. As an example, we will use here a chicken meat producer

Let's imagine that an airline company is considering scaling the business. Help them estimate what it will mean for them.

In this lecture, we will discuss the solution to the case study.

In this lecture, we will discuss the solution to the case study.

In this lecture, we will discuss the solution to the case study.

Let’s have a look how the process of Scaling Recruitment & Training should look like.

Let’s have a look at the general framework for Scaling Recruitment & Training

Let’s look at how Amazon has scaled recruitment and training.

Let’s have a look at what top retailers are doing when it comes to scaling recruitment & training.

In scaling, 2 nice techniques can prove very useful: 10x using first principals and Enabling Investment. We will discuss them in this section.

One of the ways in which you can come up with new business ideas is to use the 10x framework where you resort to so-called first principles. This is the favorite method of Elon Musk

There are 3 main ways in which you can improve an existing business. This will help you come up with the proper business idea:

• Make it faster

• Make it better

• Make it cheaper

Let’s imagine that you want to drastically reduce the usage of water. Use the 10x framework to achieve this.

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

Let’s imagine that you are an owner of a bus company and you want to find a way to make the cost per 1 seat cheaper. Use the 10x framework

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

In many cases, your demand is limited by something that you cannot control directly. In such cases, you may be interested in enabling investments

Enabling investment can be done in different places depending on where the bottleneck is

• Demand-side

• Supply-side

• Distribution side

Let’s have a look at how a retail chain for kids’ products can do enabling investments to support the sales of its products and in Tesla

Let’s now have a look in more detail at how we can scale a consulting business.

There is plenty of small consulting businesses and only a few big ones (above 100). Most get killed in the valley of death - the space between 10 and 100 consultants where the fixed costs are dragging you down and lack of flow in the pipeline eats away your cash

In the beginning, you will be competing for the best candidates from the best universities. In this lecture, I will show you how to overcome this problem and get a hold of the best people on the market

In order to fill in the gaps done by the rotation and provide. To create proper training you have to take care of a number of issues. I will show you what is important and how to achieve it

To scale the business you have to have scalable sales. Here we start the topic.

Here I show you how to analyze the profitability of sales channels in Consulting

Here I show you how to analyze the profitability of sales channels in Consulting

Here we analyze the situation for cases when you are selling smaller services i.e.per hour consultation on SEO tactics

Recruitment & Training is much more important in consulting business than in consumer goods or retail. Training has a huge impact on your product and ability to deliver projects.

Here we will discuss most important ways to train consultants

In the last section, I will show you how to build the training system in practice. I will first show you the whole process and we will discuss each and every element of this process that at the end will help you deliver the target. There will be plenty of case studies that will teach you how to make certain choices when it comes to the training process. Training is one of the 3 big machines that a consulting firm needs to grow and deliver value to customers. We know how big it has to be let’s see how to build it. In this section we will talk about the following issues:

• Process of building the training machine

• How to define the budget

• Pick the right mix of methods

• Decide on whether to make or buy the training

• Prepare the training machine

• How to define the pace of creating content

• Execute & modify the training machine

Let’s see how you can build the training machine. It consists of 5 stages:

• Define the budget

• Pick the right mix of methods

• Make-or-buy analysis

• Prepare

• Execute & modify

We will discuss in detail the stages in the next lectures

As you may remember there are 5 stages of creating the training machine. Defining the budget is the first one and we will discuss it here in more details

Imagine that you have to analyze what is a better option - hire cheap employees & devote a lot to teaching them or hire more experienced yet expensive people. We will solve a case study in the next few lectures to see what solution would be the best choice.

In this lecture, we solve the previously introduced case study.

In this lecture, we solve the previously introduced case study.

In this lecture, we solve the previously introduced case study.

As you may remember there are 5 stages of creating the training machine. Picking the right mix is the second stage and we will discuss it in more detail in this lecture.

As you may remember there are 5 stages of creating the training machine. Let’s discuss in more detail the make-or-buy analysis. In make-or-buy analysis, we compare the total cost of making and the total cost of buying. Remember also that the make-or-buy result will heavily depend on the scale as in the buy case we have a lot of fixed costs. In the next lecture, we will go a little bit deeper into this area and we will have a look at 2 case studies.

The total cost of ownership is:

• All the costs related to owning or using a specific item/thing

• It will also include the cost of lost opportunity i.e. money not earned due to spending time on repairing the thing

Let’s compare the cost of owning a car and using a rideshare/taxi/cab service

Imagine that you have to analyze for a consulting firm whether it makes sense or not to produce an online course devoted to Data Science. In this lecture, I will show you a few pieces of information about the firm that we will use to pick the optimal solution.

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

As you may remember there are 5 stages of creating the training machine. Let’s discuss what you have to do in terms of preparation. During the Preparation phase you have to do the following things:

• Prepare the content for the activities done internally

• Find providers for the rest

• Schedule the activities given assumed pace of learning for each and every employee

Once you have picked the right mix and decided what to make, and what to buy you should set the deadlines & set the pace of preparing content

Let’s see, using the Supply Chain course, how you can create content for the training activities that you want to deliver internally.

In this lecture, we will solve the previously introduced case study.

In this lecture, we will solve the previously introduced case study.

By Pace we mean:

• The speed of creating content given your goals, deadlines, and the time needed to create a specific type of content

• In the case of content creation, we can measure the pace  in # of pieces of content produced per period, or man-hours devoted to content creation per period

To make sure that you deliver what you have planned you have to define the pace of content creation.

In this lecture, we will calculate the pace

As you may remember there are 5 stages of creating the training machine.

The last stage is the easiest one. You just have to carry out the plan and modify it if needed. This entails:

• Carry out activities according to plan

• Modify if needed (new employees, new projects, change of the content, etc.)

Let’s see how your execution team will change depending on the size of the firm