Small Biz vs Big Biz: Scaling Advice You Can Actually Use
Reacting to advice from the CEO of 7-Eleven on scaling businesses, using debt, and balancing risk and reward. Is this advice useful for small business owners? Or is it out of touch with the reality most entrepreneurs face? In this video, Matt breaks down the nuances, points out what applies (and what doesn’t), and highlights the key differences between Fortune 500 thinking and small business reality.
There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!
Video Transcript:
Business Advice Video:
Scaling is critically important. So many businesses die because they never achieve any critical mass. Now, keep in mind, I come from 7-Eleven, so I understand the power of scale. So the challenge is for you to balance that risk-reward ratio. Every business has risk, too much risk and it becomes a gamble. Too much reward in the near term and you never get to critical mass. The most important thing is to have your eye on the future, because macro tendencies will make the biggest difference in your ability to use debt to scale.
Matt’s Review:
So, what you’re getting here is very specific advice from a very specific person in a specific situation, the CEO of 7-Eleven. Those, in order to expand 7-Elevens, it’s capital intensive, so you need a lot of debt. That’s what he’s talking about, using debt to expand. Not every business is in that situation where debt is required, and macroeconomic trends may or may not influence what you decide is risky or not as far as your business. For some businesses, it may be when the economy slows down, you also slow down. For other businesses, when the economy slows down, you may pick up or your business may be sort of insulated from that. So, it’s a very general question given to a very specific person who’s coming at it from a very specific point of view. I’m not sure, you know he’s saying balance, risk, and reward. Too much risk is bad, that makes sense because the more you push it, sooner or later you’re gonna lose a bet, and depending on how badly you lose it, that might tank everything. Too much reward, though, not sure how that’s ever a problem. Getting complacent, I guess, and slowing the pace of your growth, that’s maybe not the right phrase to use for this. Anyway, this is advice that is going to be tough for, I think, most people to relate to, especially small business owners when you’re talking about a Fortune 500 company and what they did to grow. It’s just not the same comparison for most small business owners.
