• How do you know when you're ready to scale?

• People tend to run campaigns and immediately want to scale from the very beginning, but that's the wrong approach because if you watch the first two videos, you know, that you have budgets for testing, and then you also have things that you need to optimize for.

• You need to instead go along with the process of trying to find the right budget for different audiences that you're testing, you're trying to find the right offer to promote to these people.  You're essentially looking for something that's not only going to at least get you to break even, but possibly even make you money, before you scale. 
  

• There's a lot of moving pieces before you even get to this point, but let's say you've reached the point of scale. You're spending a couple thousand bucks a month, maybe you're spending $10,000 a month and you're not just breaking even you're actually making money.

• But maybe you're not making the money you're looking to make. Maybe you're at a 2-to-1 return, meaning every dollar you put in you make two, but that's enough for you to start the scale.

• If you're making at least a 1-1.5 return, meaning for every $1 to $1.50 you put in you make back, you're at a point of testing more aggressively.   Now you're ready to start spending, let's say from $5,000/month to $7,500/month, or maybe even as much as $10,000/month because you need to test more variables to see if more audiences are open to buying your product.

• Hypothetical: Let's say you're spending $20,000 /month and you want to scale.  You've already gotten to the point where you're profitable, maybe making $3 for every $1 spent, and If you want to start to scale from $20 to $30,000/month but notice the return on ad spend comes down, it's not necessarily a bad thing. 
  

• That means you have to test more audiences to see if you can at least maintain a level that's profitable for you. 

• If you're at a 2-to-1 return and you used to be at 3-to-1, you're not losing money. What you're doing is compensating for the additional buyers that are coming into your business and you could always promote things to them later. 

• Make sure you do the math on what makes sense for your business in terms of still being able to be profitable as you are acquiring these customers. Meaning if you need a 2-to-1 return in order to keep the lights on, that's the number you need to achieve when you're scaling. If you're at a 3-to-1 level and you only need 2-to-1 to survive, you have a lot of room to scale. And so you should be spending at least 50% to 100% more money on your ads so that you can bring in that additional volume.

• If you can afford a 1.2 - 1.4 return on ad spend and be profitable, you should be spending way more money on your advertising. If you're averaging anything above a 1.5. 

• It's not even all about the math. It's all also about, are we at least breaking even, or making some money? If we are at a loss, how much can we afford to lose in the first month before it makes us money in the second month and how much available budget do we have in order for scale so that we can go from what budget we're at last month to a budget that's possibly 50%-100% or even more in the following month without breaking the bank. 

• If you can get those questions answered and you're at a point in ready for scale. 

David (00:01):

Hey, everyone. Welcome back. Today's video is going to be about how do I know I'm ready for scale? Okay. Now consider this. A lot of people tend to run campaigns and immediately want to scale from the very beginning, but that's the wrong approach because if you watch the first two videos, you know, that you have budgets for testing, and then you also have things that you need to optimize for. And when you're going along the process of trying to find the right budget for different audiences that you're testing, you're trying to find the right offer to promote to these people. And you're essentially looking for something that's not only going to at least make you money, possibly even break. Even before you scale. There's a lot of moving pieces before you even get to this moment. But let's say you've reached the point of scale.

David (00:44):

You know, you're spending a couple thousand bucks a month, maybe you're spending $10,000 a month and you're not breaking even. You're actually making money, but maybe you're not making the money you're looking to make. Maybe you're at a one to two return. Meaning every dollar you put in you make two, but that's enough for you to start the scale. How do you go about doing that? Now consider this. Oftentimes I find that if business owners are making at least a one to one and a half return, meaning for every dollar they put in to a dollar 50, they make back, they're at a point of testing, more aggressively, they're ready to start spending, let's say from 5,000 a month to 7,500 a month, or maybe even 5,000 a month to 10,000 a month because they need the test more variables to see if more audiences are open to buying their product.

David (01:32):

Now, what if a company is spending $20,000 a month and they want to scale, they've already gotten to the point where they're profitable. Maybe they're making $3 for every dollar they put in. If they start to scale from 20 to $30,000 a month. And they noticed that their return on ad spend comes down. That's not necessarily a bad thing. That means they have to test more audiences to see if they can at least maintain a level that's profitable for them. So how do you really know you're ready to scale the let's use an example. So in this account here, this is an account we've been scaling for months. Okay. It's been something that we focused on quite a bit. It's direct to sale, direct to a sales page. And one of the things to consider is that as we continue to scale, we noticed that the cost per action started to go up, but the client was still making money.

David (02:17):

So in order to make sure we compensated for the extra cost per action, that was being accumulated. As we developed more sales for this client, we had to push more volume to make up for that number that was lost when they spent less. So in order to do that, when they were spending a hundred dollars a day and we moved to 300 a day, we would adjust our CPA. So we would know, okay, maybe we're not making $20 per sale anymore. We're making 15. So we need to increase the volume to make up for those $5 we're losing per sale. And so that if we're able to spend, let's just say, you know, 300 a day, and now we're making up for that loss that was usually made around the hundred dollars a day. Mark. The were in reality, most people when they scale, not only do they want to acquire more customers, they don't want to lose money.

David (03:06):

So if you're at a one to two return and you used to be at one to three, you're not losing money. What you're doing is compensating for the additional buyers that are coming into your business and you could always promote things to them later. So how do you know you're ready? One, make sure you do the math on what makes sense for your business in terms of still being able to be profitable as you are acquiring these customers. Meaning if you need a one to two return in order to keep the lights on, that's the number you need to achieve when you're scaling. If you're at a one to three level and you only need one to two to survive, you have a lot of room to scale. And so you should be spending at least 50% to a hundred percent more money on your ads so that you can bring in that additional volume.

David (03:47):

And if you're in a business that can afford a 1.2, 1.4 return on ad spend and be profitable, you should be spending X just way more money on your advertising. If you're averaging anything above a 1.5. So remember really more of a personal preference. It's not even all about the math. It's all also about, are we at least breaking even, or making some money? If we are at a loss leader, how much can we afford to lose in the first month before it makes us money in the second month and how much available budget do we have in order for scale so that we can go from what budget were at last month to a budget that's possible 50 to a hundred percent or even more in the following month without breaking the bank. If you can get those questions answered and you're at a point in ready for scale. So with that being said, get to it, start scaling and have fun.