How entrepreneurs can scale smartly and profitably

This episode is with Greg Crabtree, author of the books Simple Numbers and Simple Number 2.0, Rules for Smart Scaling. Greg founded his own firm to focus on helping entrepreneurs build their economic engine and recently merged with a top 20 US accounting firm to help broaden their impact on the entrepreneur community. In this episode we talk about how to scale up a company smartly and profitably.

LINKS

You’re listening to The Growth Manifesto Podcast, a Zoom video series brought to you by Webprofits – a digital growth consultancy that helps global and national businesses attract, acquire, and retain customers through digital marketing.

Hosted by Alex Cleanthous.

SHOW NOTES

  • 00:01:17 Greg Crabtree’s introduction to the Growth Manifesto Podcast
  • 00:01:57 Where did you get the idea for your “Simple Numbers” books?
  • 00:11:56 Scaling Smartly is how you choose to invest the “Launch Capital” vs. “Trade Capital”
  • 00:18:11 All sales and marketing is launch capital
  • 00:19:36 What should companies do to separate the amount they need to operate vs. the amount they need for growth?
  • 00:21:43 Greg discusses “Return on Investment Capital”
  • 00:24:08 Greg talks about why Equity is a flawed calculation
  • 00:26:44 Greg urges entrepreneurs to nurture businesses as an investment
  • 00:28:22 Greg talks about one of the best Return on Investment Capital business models he’s worked with
  • 00:36:55 What causes Profit to increase as the Trade Capital decreases?
  • 00:39:52 Greg dispels the myth of the non-profitable client that contributes to overhead expenses
  • 00:45:06 What is the Labor Efficiency Ratio (LER)?
  • 00:47:55 Greg discusses “Direct Labor” and “Management Labor” in relation to LER
  • 00:53:48 According to Greg, we have deconstructed business to the point where we focus on the one piece of the value chain we really do well
  • 00:59:23 Greg states that the “Launch Capital, Trade Capital, LER, etc.” approach applies across all business models
  • 01:03:07 Greg learned that slowing down payment will make you a third world economy while making cash flow faster makes you a first world economy
  • 01:05:24 The “Simple Numbers” book series is highly recommended for both entrepreneurs and for the people who are responsible for handling a company’s budget and for driving profitable growth
  • 01:10:39 How you can contact Greg Crabtree

Adrian Clark

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