The Fastest Way to SCALE your Business and Reach $50k/mo ASAP

If you're feeling busy, but your bank account is empty, it's probably because you are optimizing the wrong thing. And you guys could solve it through a simple framework called the theory of constraints. When my partner and I started scaling leftclick, I thought our problem was that we needed more leads. But despite having a very healthy pipeline, we were still struggling to grow. Why? Because we had a bottleneck in our fulfillment process. That was the real constraint. Once we pushed our time towards that, we fixed that bottleneck and our closed rate literally doubled, which led us scaled to over $70,000 a month. In this video, I want to walk you through a highle consulting technique called the theory of constraints, as well as how all businesses are only constrained by a single bottleneck at any given point in time. I also want to show you guys how this framework probably applies to your own business, then show you how to actually identify and solve the bottlenecks that are holding you back. These are high-level management consulting techniques. If you guys learn to do this, you guys can grow not only your own business, but anybody else's business, too. Okay, so first

major point, every business is a pipeline. So every business, no matter the size and no matter the industry, is literally just a pipeline. That is it. You take something in on the left, you push it through, and then money comes out on the right. Let me show you. We're going to draw a big pipeline carrying water. Because the way the pipelines work, water will always move at the speed of the narrowest section of that pipeline. Doesn't matter how wide it is. Doesn't matter what else is going on here. If one section is really skinny, that's always going to be the limit. Water will essentially, if you were to pour it into this funnel, just back up before the choke point. Okay? So the reasons why are complicated and not really the purpose of this but let's just take this at face value and agree that is how pipelines work. How do we apply this to our business? Well, first I'll give you a classic example of what the theory of constraints was originally created for which is a manufacturing plant. So let's say you are running a factory that produces some sort of widget. This widget production process has a bunch of steps and each is performed by one of uh three different machines and each machine has a dedicated capacity. So in order for a widget to be produced actually needs to come in to a step on the lefth hand side then be processed by that step then be fed into the next step in a logical order until all steps are done and the widget is out of the system. From a bird's eye view it will look like this. Machine A which has a capacity of 100 widgets per hour. Machine B which will have a capacity of 50 widgets per hour and machine C which will have a capacity of 10 widgets per hour. So the question is in this scenario what step is the bottleneck? The answer is quite obviously machine C because it has the lowest capacity in this system. What that means is if you increase the capacity at machine A or machine B, the overall output of the plant itself, the total number of widgets that are being produced by the plant would not change because like our water example from earlier, machine C is the narrowest step here. And logically, even if you raise the capacity to a thousand widgets per hour at machine A and machine B, you know, if machine C is only capable of processing 10 of those per hour, you're not going to be able to produce widgets any faster than that, right? So, the only area that you can realistically optimize to improve the total number of widgets through the system, which is a term called throughput, is at machine C. Now, if you raise machine C to 30 widgets per hour, the throughput of the entire system will jump from 10 to 30 widgets an hour. Do you know what this means? This means that you've effectively tripled the whole plant's output by fixing a very small section. And hopefully you guys are seeing why this is important. Because the amount of work required to take machine C from 10 widgets per hour to 30 widgets per hour is probably a lot less work than it took to get machine A and machine B to a,000 widgets per hour. And notice that only changing machine C actually impacted the system. It did not matter how much work we did at machine A or machine B. The unfortunate thing is there's a very high propensity for entrepreneurs to get this wrong. So in a real business, many people think, well, hey, if I just add more stuff on the left side of my pipeline, more will come out on the right, right? And that might make sense to you, but this is flawed logic if you think of all businesses as pipelines. Cuz if you guys chokepoint is in the middle, all you're doing by cramming more stuff on the left side is you're flooding your system with a bunch of additional uh stuff almost like inventory, which just backs up the rest of the pipeline, right? You're not actually improving the throughput at the end of it, which is the only thing that actually matters. The technical term here is you're creating more work in progress. Uh for our sakes, this is usually like deals that are stuck, more ongoing projects, really just more strain to your business without actually making any more money. And that's kind of like pouring more water into a clogged pipe. When you do this, you don't get more flow. You just get a giant puddle because, you know, some of it's going to spurt out back at you. Okay, so hopefully I've convinced you the fastest way to scale any business is not actually to widen everything. The scientific way and the way that I personally always approach my own companies is to find the narrowest section first, the constraint, and then fix that. Well, that is the theory of constraints in one sentence. So, most of you guys watching this channel probably have some form of company or maybe you guys want to start one and that's fine. Whether it's an automation business or marketing business or maybe a consulting business, you guys probably deal with selling something. So, let's pretend for the purposes of this video that you run a service-based business just for simplicity. Now that we understand the analogy of the theory of constraints, hopefully you guys see what this business is. It is just a pipeline except instead of moving widgets, you're moving people. That is it, right? Instead of machines and widgets, you have sales stages and prospects. And prospects move through these stages eventually reaching some closing stage. Then they get onboarded and then finally they get the product or the service delivered. The key thing is bottlenecks in actual business are probably going to show up in one of the following places. It's either your marketing, aka your ability to generate leads, your sales, convert those leads, or some aspect of your fulfillment, aka your ability to deliver on the promises you made to those leads, which are now your clients. Marketing bottlenecks are probably the simplest ones to identify. This just happens when you guys have no leads. So, logically, if you are just starting a business, you must solve this bottleneck by marketing to as many people as humanly possible. This is my number one recommendation for the most part for people that join my programs like Maker School. you know, a massive chunk of our time is literally just solving this bottleneck by having you build systems and processes that generate demand and they get people into your pipeline in the first place. Now, assuming they're in there, sales bottlenecks tend to occur when you have plenty of leads, but then they are stuck at some stage. This is where they might sit in your CRM for weeks or maybe they're just not being followed up with. Basically, you just have a big backload right at that stage. And if you guys have a bottleneck here, then if you apply just a little bit of pressure, aka you might improve your ability to follow up or maybe you improve your conversion rate just a couple percentage points or maybe you improve the speed at which you send proposals or stuff like that, you can push many, many of these leads through the pipeline to get to that next step. Now, fulfillment bottlenecks tend to occur when there are projects that are piled up behind a stage in a fulfillment process. So, let's say you guys run a marketing agency and every campaign needs the creative director's approval and one day you look through your project management system and you see that there are 15 projects currently sitting on their uh proverbial desk in your PM system. Well, if you guys implemented systems that either don't require the QA to begin with, or you provide processes that allow them to do that QA faster, you solve the bottleneck and the growth of your entire company, literally your whole revenue, will be proportional to the degree to which you help them expedite that process. So whether it's marketing or sales or fulfillment, you know, the rule is always the same. Your total throughput is capped at the bottleneck. And if you fix that bottleneck, literally your entire business will be sped up and your throughput will go up too. So how do you identify a bottleneck? There is actually a very straightforward system for identifying and relieving constraints. It is called the five focusing steps. And if you guys remember nothing else about the theory of constraints, just try and remember at least a couple of the things I'm about to tell you. So

step one is to identify the constraint. This is where you find your bottleneck in your system by applying intelligence. Just like we did to your own pipeline, just ask yourself, where is the choke point? Where is most of the inventory or work in progress backing up? For most beginners, this will naturally be your marketing. But as you guys grow more sophisticated in your ability to generate demand, which is obviously that first bottleneck, that will naturally transition over to your sales, then eventually when you get really good at sales, naturally push over to your fulfillment. Step two is to exploit the

constraint. Now, your full goal should now be to get the most out of that constraint with what you already have. You should do it without spending any money. Try and eliminate downtime. you know, tighten up your processes, reduce any waste in the system. This is technically termed process optimization, and you guys be very surprised with what you can do here with just a couple of minutes of execution. For example, a really big constraint with a lot of people in Maker School is the number of Upwork applications that they send per day. Upwork is a very straightforward lead generation system if you don't have any skills. And it's also, you know, if it's your first time selling something, probably the most straight line path to getting money. So, a lot of members use it to get their very first customer. And as part of the work, technically, what you have to do is you have to sit down and they have to submit an application. And this process could take anywhere from two to maybe 5 minutes or so. Now, hypothetically, let's say it takes 3 minutes. That is 180 seconds. If you guys restructured how you did the application, even in a very simple way, let's say you have a Google sheet with a bunch of templates and you just copy and paste it in rather than write stuff from scratch. Maybe instead of 180 seconds, it only takes you 150 seconds. And this does not seem like a very big deal, but keep in mind that by saving 30 seconds of that process, you are literally saving 30 divided by 180, which is about a six of the entire execution time, which is 17%. Since these are beginners that have no leads, lead generation is their only bottleneck. The one thing that controls the entire success of their business is their lead genen. So, if you simply have a Google sheet that you copy and paste templates in, you will grow your entire business by 17%. And it seems like magic. You will never ever find clearer and easier gains than this. So if you just take a process approach to all of the things that you are doing, if you start by writing them down so you can actually see them in front of you and they're not just floating around in your head, even applying a few minutes of thought as to how to make things easier and faster for you to do can ultimately lead to, you know, gains in your business of 17% or more. Okay. Step three is to subordinate

everything else. So once you have exploited your constraint, you need to align all of your other work to serve the constraint to minimize your waste. And what that basically means is if sales is your choke point, you know, you should not be spending money on ads and dumping more leads into the system than you can handle because that's just wasting money. So maybe you just reduce your ad spend, the number of cold emails that you're sending per day to match your capacity at the constraint. An alternative is if maybe your fulfillment is maxed out on the other side. Your sales team should not be promising faster timelines or pushing more people through the system, at least not right now. Everything else in your company should bow to that constraint that you have just figured

out. The next step is to elevate to the constraint. Once you guys have squeezed that constraint dry and you have process optimized and then you everything else is bowing to that constraint only then are you now able to add more capacity in the form of spending money. What this means is hiring people buying tools uh investing in infrastructure and so on and so forth. The key part is you're only doing this after you've exploited and subordinated that constraint and really squeeze as much value of it as possible. And the next step is to

repeat. Once you guys solve one constraint, if you think about it logically, what you're doing is you're creating another. Because now that you've widened that bottleneck, there will be another part of your pipeline that is the narrowest step. And every bottleneck that you widen will grow your entire bottom line disproportionately, which in short is literally the whole game of operating a high quality business. So hopefully it's very simple. You identify, exploit, subordinate, elevate, and then repeat. And that is the whole process at a high level. So let me give you guys another example. I once worked with an AI consultant who was doing pretty well for himself. And because his business was growing, he thought the logical thing he needed to do is hire more people to, you know, handle more inquiries. Basically, the three stages above, which were marketing, sales, and fulfillment, he thought his bottleneck was at the fulfillment, his ability to handle and manage the systems that those inquiries produced. So, he would spend all of his time and his money hiring and qualifying and interviewing and onboarding and so on and so forth. And it literally took this guy over a month to actually hire a small set of staff members that he thought that he needed in order to do this. that entire month was wasted because he didn't actually have in the first place sufficient demand for his services to justify keeping those people on payroll. So when he ended up hiring them, they immediately were underutilized. Less than 50% of their time was actually spent working. Which means, if you think about it, he was spending twice the money he needed to on those staff. Why did this happen? It's because he didn't properly evaluate and figure out his actual constraint. At that point in his business, he was pretty early on. You know, he had a handful of clients and his marketing was primarily referral-based, which means it was not stable. it was not bringing in a reliable and consistent source of leads. What this means is his actual constraint was not the fulfillment of his projects. At the time, his actual constraint was that he did not have enough leads in his pipeline to begin with. Basically, he was trying to solve a problem proactively that he thought he might have if his referrals kept paying off, but he didn't actually stop to consider whether his business would ever get to that point to begin with, which is very, very wishful thinking. You know, he was actually managing all of his current business completely on his own at the time. he might have not ever actually needed to hire those people and he ended up just wasting an entire month of active valuable labor on a problem that was not worth solving in the first place and then went as far as actually spending money and hiring people to do so. Thank god these people are on that probation period. He managed to let them go pretty quick. And anyway, that takes me to a really common problem. People tend to elevate before they exploit. So instead, you need to exploit before you elevate. The golden rule of theory of constraints is never add resources to a bottleneck until you've squeezed every last drop of efficiency out of what you already have. basically don't hire first, you hire last. And most agencies will do this completely backwards. They will find a bottleneck. And maybe it's a real bottleneck, unlike our example here. And then their knee-jerk reaction is, okay, well, we should hire, you know, I should bring on another salesperson to solve my sales constraints. I should add another account manager to help with my account management constraints. I should buy another fulfillment tool to help me with my fulfillment constraints. And then what actually happens? Well, they just scale that inefficiency. Technically, their business becomes bigger, but that constraint has not changed. They just scaled everything up. And the reason why is because at their core, the system they're using is sub-optimal. And while throwing money at the problem can technically solve that constraint in a near term, that constraint will still widen much slower as a result. And to some extent, it will always be the constraining factor on growth. So what does it look like to exploit first instead of elevate? Let's say your bottleneck is sending proposals. Uh what exploiting would mean in this case is instead of waiting a week to send a proposal, you send your proposals the same day and you institute an SOP where you just always get that done. Instead of sending just one proposal, you build an automated follow-up sequence that sends your proposal, then just checks in over and over and over again for 14 days. Instead of letting your proposals go unanswered for weeks or months, maybe you as a processed person add some sort of timeexpiring offer to create urgency. Maybe you just allow people the same pricing that you offer for 7 days and on the eighth day doesn't count anymore. Instead of spending all this time and energy writing proposals from scratch, maybe you just tighten up your proposal template so you're not reinventing the freaking wheel every time. Alternatively, maybe your bottleneck is intake. Okay, maybe you have a lot of leads that are generated at the front end, say through ads, but then not a lot of them are converting into actual meetings. This is actually a pretty common problem for people that are good at demand genen, but don't really know what to do after that. What exploiting would mean in this case would be stuff like maybe you cut your intake form from 10 questions down to three essential questions. Maybe you autochedu calls instead of sending some sort of back and forth email. Maybe you just turn the entire thing into a calendar. You know, you don't need more staff for any of what I just talked about. You just need to make the bottleneck run smoother with what you've already got. Only after you've done all of that will you actually want to elevate. And that is when you know you bring in another rep or VA or you automate the step with software. Elevation makes sense once the process is already really effective because you're now scaling something that is efficient and something that works.

Okay, so some strategic rules of thumb uh that actually make this sort of thing stick. Rule number one is 1 hour on the constraint is worth at least 30 hours anywhere else. If you guys ever wonder why some people can do everything they need to do in their day to grow their businesses like crazy in literally an hour, whereas you are spending 8 to 12 hours and it always feels like you just don't have enough time in the day to do freaking anything. It's because you're not spending your time on the constraint. You're things that are, you know, not constraining essentially. And none of that time is being spent on something that actually grows your business. For the most part, you're probably just maintaining it or like I was telling you guys in an example before, you're scaling some form of inefficiency which is not required. Rule two is don't elevate before exploiting. So hire last, not first. Try to fix the process itself before you start throwing people or money at it. Otherwise, you're just scaling a really stupid process. All right, so hopefully you now understand how to apply the theory of constraints in your business. It's easily one of my most favorite topics in business just because of how powerful it is for making meaningful decisions that actually move the needle of your company. The way we applied this at Leftclick was fulfillment was a major bottleneck of ours because the vast majority of the time our automation products were custom. So as opposed to just hiring a bunch of people to take care of the problem, we actually fundamentally changed the things that we sold, what we did is we productized. And in doing so, we significantly widened the back end of our fulfillment pipeline to the point where I was actually capable of doing the vast majority of everything that was needed to get done myself. Once I figured that out, then I significantly improved the front end of my business. And then I built mechanisms that allowed me to sell the opportunities that I was generating, which let me scale over $70,000 a month with actually just one VA. So, that is how you go from looking busy to actually growing a business and making money. If you guys like help

applying this sort of thinking into your own agency, if you guys want somebody to sit down with you and map your CRM and show you exactly where the bottleneck is, feel free to book a call with us over at Leftclick. Otherwise, I do appreciate you sticking around and I'm looking forward to seeing you on the next video. Thanks so much.