Have you heard of the “Busiest Day of the Year Test”? I use it to assess how scalable a business is.

I ask, “It’s the busiest day of the year. The biggest show of the year is going on. How many people are left in your office?”

If the answer is, “No one’s left in the office except the bookkeeper because everyone else is out on the job site,” I know I’m dealing with a company that has misplaced priorities. The company is completely focused on the now instead of the future.

The biggest difference between a scalable organization and a traditional model is that traditional models are focused on the now. They tend to be reactive. They’re about problem-solving.

Scalable organizations are working on the future. They prevent problems. They plan and allocate resources and assets to make things run more smoothly. That way, when there are problems in the now, there are people available who can stop focusing on the future for a few minutes, solve the problem, and go back to working on the future.

Scalability doesn’t apply to just one aspect of your business. All the areas of your business need people to work on scalable processes.

In a scalable business, even when you’re busy you have a sales sphere that’s still doing marketing, business development, lead processing, proposal development, and closing deals. Sales has to keep creating future work, no matter how busy you are.

The planning sphere — called “operations” in the past — is focused on making sure you have all the right people, equipment, and supplies in place to properly prep orders, inform crews, and deliver a show that’s ready to execute to the Show Lead.

Planning and procurement go hand in hand. They’re required even when you’re busy because you never don’t need to work on the future or deal with problems in the now.

In a scalable business, there’s always a team back at the office to take care of all these things. Sales and planning become regular eight-to-five jobs.

How does management fit into all this?

Scalable Management

The nice thing about scalable companies is that they need less overall management. A small management team can manage a much larger company than they could in the old model. Old-school managers spent a lot of their time dealing with the problems of unscalable processes.

Scalable management has several areas they’re going to approach differently:

1. Capacity

Capacity management is an area of expertise, a core competency that needs to be mastered.

Management needs to learn to optimize capacity. This means they’re going to turn down work during peak periods of demand and run a business that’s busy year-round rather than just in certain months of the year.

Look at your demand cycle. Because you know the ups and downs of your seasonality, you know you’ll have a couple of big months. You have $2M and $3M months, but you also have $300M months.

You likely have a lot of capacity built into your business to accommodate the $1M months, but this capacity is inefficient and unwise for a $300M month. Scalable companies learn that if they chop off a million dollars worth of business, they can reduce overhead and be more profitable than if they had kept that business.

Because scalability optimizes your processes, you learn to sell from a place of unlimited resources. This seems counterintuitive to managing capacity, but it’s not. Don’t worry about where something will come from until you know you’re actually going to need it or you’re out of actual capacity.

For example, in June 2022, there were no big trucks available for cross-country work, and our industry had to curtail logistics. You knew you couldn’t sell any more logistics because there were no more resources. In that situation, you had to manage the market’s cap on capacity.

Until that happens, however, you must assume you can get the things you need so you don’t muddy up the whole selling process with unnecessary checks.

Selling from unlimited resources means you have to have better, stronger processes for planning and delivering what you’ve sold, and those resources don’t get sourced until the job is confirmed.

2. Lead Time

In the old model, jobs coming in at the last minute were harder to execute, especially when your entire team was out of the office on the busiest day of the year. Last-minute jobs were always a problem because all your resources were used up. There was nobody left to hire freelancers, do sub-rentals, book last-minute travel, or find a truck.

In a scalable model, you worry less about lead time because your resource planning group is always available.

A smart resource planning group will make smart moves such as reserving internal resources like staff technicians or show leads. They’ll also reserve equipment so you can accommodate your best customer when they call the week of and need something done.

Managing capacity means you hold back some capacity to solve problems you can’t walk away from. You make sure you get all of your outsourcing done in advance, particularly when you know you’re heading into a busy period. You’ll save some internal resources to plug the holes where they pop up.

Don’t worry — everything will get used. It’s wiser to save some resources to meet last-minute needs than to go out and outsource them.

3. CapEx

A scalable business should be comfortable outsourcing major pieces of equipment. You don’t need a 300-foot-wide LED wall every day. Why not outsource it? The same goes for a 40,000-lumen video projector.

Your capital expenditures strategy should focus on what I call the “glue items” — gear and accessories that support the major pieces of equipment but also allow you to show off your style and brand.

Bringing a sub-rented projector onto the job creates less of a different look and feel than bringing an entire sub-rented video switching system.

Never sub-rent items like cables. Spend more money on basic items so you can use them to fill in outsourced sound systems, moving lights, or LED walls.

4. The Year-Round Schedule

Management has to adjust to having a full schedule year-round.

Just because you’re in a seasonal industry doesn’t mean your business is seasonal. You may not be busy doingshows, but you should be busy selling and planning future shows.

A dedicated team that sells, plans, and procures future jobs should never have a slow month. There’s always work to be done in these areas. This means 100% of that team’s day is going to be dedicated to selling, planning, and procurement.

The old way was to put off certain projects until you had a slow season. But when the time came, you let everybody take a vacation, and the projects never got done.

When you’re used to having a full schedule year-round, there’s no more wait-for-the-slow-time mentality. If it’s important and necessary, it can be worked on at any time of year. Recruiting, training, etc. can happen year-round.

5. Work-Life Balance

This brings us to the issue of work-life balance in a scalable organization.

Back in the day, there was a distinction between the people who worked in the office and led office lives and the people who worked in the field and led show lives. When you started mixing the two, so office people were doing shows and show people were doing office work, you lost scalability.

That’s when you ended up failing the “Busiest Day of the Year Test,” because everyone was out of the office on the show site.

In scalability, work-life balance takes on a new importance because your office people need office people work-life balance. They need to be able to schedule their three weeks of vacation at any time of the year. You need the redundancies, training, and skills to backfill when someone’s on vacation.

The management of show people work-life balance is different. Show people can work every day for a month, then only two weeks the next month, and still have a full schedule despite not working five days each week.

To achieve scalable balance, keep these two groups distinct.

Conclusion

Everything I’ve described will radically reduce the stress on your team. It will increase everyone’s productivity because they’ll be able to work at their best all the time.

It also makes long-term goals much easier to achieve, which is a better justification for having management than just backfilling when processes fail.

If management wants to be really valuable, they’ll work on long-term goals and accomplishments, and scalability will make it easier for them to do so.

That’s what scalable management looks like.