The $10M Tradeoff Test

Everyone wants to scale...until they find out what scale really costs.

A friend of mine runs a $2M business. Great margins. Low stress.

He takes home more in a month than most people earn in a year. But when he came to me asking how to scale to $10M and prep for an exit, I didn’t start rattling off tactics. I asked him a question instead:

He thought I was joking. Why wouldn’t he want more revenue? More impact? More legacy?

But scale isn’t just a goal, it’s a tradeoff…a series of non-obvious sacrifices that most founders aren’t ready to make.

If you’re thinking about scaling, consider this your gut check. I call it The $10M Tradeoff Test…five simple questions that will tell you if you’re really ready for what comes next.

Let’s dig into it…

Are you willing to outgrow your founding team?

The team that got you here likely doesn’t have the skills to take you there. Sure, some will grow with you. Most won’t.

This means you’ll have to “top” people (a.k.a. hire more experienced managers over them), demote people, or even fire a close friend because he or she just doesn’t have the skills or experience needed to take you to the next level.

I’ve been there. It hurts. But staying loyal to the past kills your future. So…

Are you willing to make this tradeoff? Are you willing to one day say goodbye to “good” people who got you where you are today?

Can you accept missing moments at home?

Even if you try your best, fires will flare up, and for a while, you’ll be the only one with a fire hose. But I’m probably not telling you anything you don’t already know.

But that’s not the real danger.

The real danger is that you start to like it…you start to make chaos and “saving the day” a part of your identity. I did, and it almost cost me everything. Fortunately, I had people around me (specifically, a very loving and VERY understanding wife) who called me out before it was too late. So…

Do you have these people around you? Are they willing to let you make this tradeoff, at least for a season, and (more importantly) are they willing to tell you when you’ve gone too far?

Can you stomach earning less to grow more?

The stretch from $2M to $6M is what I call "No Man’s Land." You’ll have all the expenses and complexities of a $10M business without the revenue to support it. So while the company is technically “making more,” you’ll be spending even more, which means you’ll be taking home a lot less.

The kicker is, everyone will think you’re crushing it…only your bank account will know the truth. So…

Can you handle “making more” while earning less as you scale through “No Man’s Land?”

Will you trade the “wild and crazy” fun of the early startup days for a more scalable structure?

Your early team will say you “sold out,” and they’ll be right.

The flat, scrappy culture they loved will die, and structure and systems will replace spontaneity. It’s not wrong. It’s just the cost of scale. So…

Are you willing to be called a “sellout” for the sake of scale?

Can you lead while knowing you’re an impostor…and a hypocrite?

The harsh reality is that you’re going to have to fire people for underperformance, and you’re going to have to demand that managers do the same.

And the worst part is, you’re going to have to do all of this while secretly knowing that YOU are underperforming, too.

You’ll feel like a fraud.
You’ll feel like a hypocrite.

Because here’s the kicker: You’re not allowed to fire yourself.

This is your company. You’re its captain. You have to stay at the helm…sink or swim.

Sure, one day you may choose to quit. You may bring on a CEO to replace you or even sell the business. But that day isn’t today. Today, you’re all you've got. So…

Are you willing to keep showing up even when you (and everyone else around you) knows you have no idea what you’re doing?

If yes, then buckle up. Because when you come out the other side, you won’t just have a bigger business. You’ll have a better one…

…a company that runs without you.
…wealth that outlives you.
…a life that’s finally yours again.

Is it easy? Heck, no!

Is it worth it? You bet it is.

⚡ Action Step: Run yourself through The $10M Tradeoff Test. Here are the five hard truths of scaling:

If you’re not willing to pay the price of one (or more) of these, then don’t scale. Stay where you are or retreat back to the $1M - $2M range.

If you are, then buckle up. The journey isn’t easy, but the rewards are massive, and there’s a lot of fun to be had along the way.

P.S. While these tradeoffs can’t be avoided entirely, you can shortcut most of them and dramatically reduce their impacts with the right systems and support. If you’d like my help scaling through the “No Man’s Land” between $2M and $20M, book a Scale Session today and let’s talk.

Here’s some other content from the Scalable network you might have missed: