7 directions for scaling a business. What every manager should know

AVAlexander Volchek

But for you, it will lead to death. A very important area, incredibly important. Most people, most entrepreneurs, lack a proper expense accounting system. Yet this is where the greatest number of real problems in a person's business arises. Your task is to see your own next step through these seven areas once again.

A person who operates on a large scale, an expansive personality, someone ready to grow tremendously, is someone with a strong understanding of business across different areas. There are seven of them. Every entrepreneur, every businessperson, every manager who wants to grow significantly needs to embrace these seven areas, see them, feel them, and understand them deeply. Don't rush to learn them all instantly. Don't rush to become an expert in all seven within six months or a year of your life. It's important to know they exist, and throughout your life, professional activity, and work, to remain engaged with them, find your bearings in them, and develop them. Just knowing these areas exist already lets you move forward in huge leaps: tenfold, fiftyfold, a hundredfold, five hundredfold. The knowledge itself points your thinking and actions in a completely different direction. You're on Alexander Volchek's channel. Here I talk about scaling, growth, development, and thinking on a large scale. Today I want to help you see your next step in business: the most effective thing you can do now to scale and grow. Through these seven areas, seven factors, seven domains of a person who thinks big, today you'll find your own personal—

Find your own personal next step today. Every entrepreneur, every manager, every person who wants to build a business has their own next step. It's always individual and different. Each person has their own. I always say it's important for you personally to discover your own next step for yourself. There's no single next step for absolutely everyone who happens upon or watches this video. There are good things everyone can do every day: wake up and smile, think about love, think every day about what good you've done for other people. Things in our lives that touch on life's values can be done by absolutely everyone. But in business, in your professional activity and work, in things connected with earning money, there's always your own personal next step. Otherwise, you might take an action that suits someone else and brought them incredible growth, but for you it will lead to death: the death of your life, the death of your professional growth, the death of your chance and opportunity to scale. It will lead you into decline.

Again, for one person it's growth; for you it's death, or for someone else it's death. So try to hear about these seven factors, these seven important areas in this video, and see your own next step. Your task today isn't to develop an understanding of the whole integrated system of seven areas, steps, and domains, because that will take years to form. Your task is, once again, to see your own next step through these seven areas. You can't watch one twenty-minute or forty-minute video—whatever its length—and become a professional in all

these areas. At the very end, I'll tell you about the eighth area, the eighth domain of substantial growth for every entrepreneur. I'm in Silicon Valley in the United States now. Life brought me to my first visit to Silicon Valley back in 2007, thirteen years ago. Of course, I didn't know I'd move here with my wife and our four children. I never set that goal or made that plan. Back then, I was already managing many software development projects around the world: in the United States, Taiwan, Germany, and France. We worked on a great many different projects. I spent most of my time living in Minsk, while also traveling a lot. Back then, as I began managing projects—there were dozens—I started encountering, exploring, and searching for the points and areas of attention that matter in business. These seven points I've developed over that time are a system of my own that I've probably been designing and developing for years. It definitely changes, because beneath these areas lies my overall system of personally managing very different businesses and large numbers of people: thousands of different people, millions of clients.

It always changed as I immersed myself in operations, or conversely, in being an entrepreneur and businessperson when I wasn't involved in operations. I applied my knowledge of these areas in different ways. Of the seven areas, we first need to identify three that are fundamental.

Fundamental, and the basis for the rest of the system. First, customer acquisition. Second, sales. Third, product. And four additional areas. Remember, I'll tell you about one more—the fifth additional area, the eighth overall—at the very end of this video. The four additional areas are management, people, finance, and development. Whatever business I create, whatever management system I build, whatever teams I start working with, I always remember these areas of business that I'll engage with as an owner. Whether I'm a minority or majority owner, have a small or large stake, am involved in operations or not, or engage with them as a manager. Whether I'm the CEO or one of the directors working inside the company, in any project I'll always remember these areas exist. I'll move through the business by way of them and try to find the next steps through them. There are a great many. Customer acquisition is everything to do with marketing and finding customers for your business or project. Customers exist in practically every endeavor.

Whatever the business, there are always customers. Someone might say, “I have one customer,” or “I manage recruitment, and I don't have customers.” In that case, if you manage personnel, your customers are your potential candidates. There are always customers. Or, in theory, the people who come to you and request those positions could be your customers. Everything to do with acquiring customers is the marketing area. Within marketing, there's a whole fundamental field of success factors. At one time, together with my—

At one time, my partner Anton Krutasyuk and I developed a system in which we identified these seven areas and an eighth bonus area, and outlined about 120 success factors that needed to be in place. I'll certainly talk about those factors on my channel. Right now, it's important to watch this video with focus and understand that there are different areas to direct our attention toward. Many people in business think that only marketing, for example, matters to them, and none of the other areas matter. The world today is arranged so that a huge number of people work in marketing. Yet take the Valley, Silicon Valley, where I live. It's an interesting place: the southern part of San Francisco, considered the San Francisco South Bay, in California, the state of California. What's remarkable about it? California as a whole is an incredibly wealthy place, roughly equivalent to two budgets of the Russian Federation. If we separated California from the United States as its own country, it would be the sixth—roughly fifth, sixth, or seventh—largest economy in the entire world. It's a highly concentrated place of money, minds, resources, and influence. Silicon Valley, of course, is a place of incredible innovation. The world's wealthiest companies have offices here.

Apple or Microsoft, for example. Apple is worth more than $3 trillion. Microsoft seems to have overtaken them in value now, though that doesn't really matter. The whole world knows these companies. They're here, and you can often see their executives, team members, or some of their founders—

all kinds of people, including people from other companies—in person. They're here. It's a mecca of innovation. At the same time, it's a place of incredible stability. People often associate stability with something old, unfashionable, outdated, or stagnant. People often come to Europe, and many don't like it. They say, “Oh, these places are old and unfashionable. What even is this? It's such a different design.” But there's incredible strength in that. Here, extreme innovation coexists with extreme stability, and even a certain amount of decline is clearly visible. Why am I giving this example? Because that decline is visible in marketing, too. There's Apple's incredibly innovative marketing, alongside the thoroughly regressive marketing of various establishments and services here that meet people's basic everyday needs. They coexist. Many people here who operate offline may not do marketing at all, but think about other areas. They may not know they need to build customer funnels. They may not think about calculating lead costs.

They may not know metrics like client acquisition cost or lead acquisition cost, or they may know what churn rate and CTR are but not know what kinds of advertising exist. To them, it's just something incomprehensible. They live in their own world. Meanwhile, an electrician will come to your home in a BMW 3 Series from 1980 or 1990. That electrician will be over seventy, in a great mood,

fixing your outlet for $200 an hour. Taking a very long time. Time differs for different people, and each has their own perception of it. So, marketing. You need to remember it exists and needs attention. It's not a simple area. I've worked in it a lot and am known for being able to generate a large volume and flow of customers: thousands or tens of thousands of new registrations entering the system every day, with salespeople making, say, ten thousand calls a day or handling ten thousand tasks. I had that at Business Molodost eleven years ago, when I owned and ran it. I had that at GeekBrains, one of the largest education companies in the Russian-speaking world, among the world's top twenty IT education companies. A great many IT people studied there and received an IT education. Still, I know not everyone should use these large-scale marketing tools in their business. For some people—for example, my female friend who has a salon with an Endospheres machine, or a Pilates studio, or someone with a nail salon, or people close to me who do filming, editing, or camera work—

or a friend of mine who has his own cafe, or someone in business who visits people individually to provide electrical services—if they use big, new, large-scale marketing tools, they'll blow up. Their business will go bankrupt, become unprofitable, and cease to function. The second important area is sales: how and what you sell, and how you convert the entire incoming flow of customers.

It's everything to do with sales management systems, CRM, call centers, the work of your salespeople and operators, their incentive systems, everything happening within sales. How effectively and how well you serve each potential customer so they buy now, continue buying, and buy in the future; so their lifetime with you—the amount of time they spend with you—grows, their lifetime value—how much they pay you throughout their life with you—increases, and churn decreases. Something interesting about CRM: yesterday we went to San Francisco, where there are gardens built up in the air called Salesforce Garden. Why are they called Salesforce Garden? Salesforce is the world leader in CRM systems: client relationship management or customer relationship management, systems for managing relationships with customers. Why are the gardens associated with them? Because they built a whole huge district there. There's this very famous, large building, probably the most beautiful modern, fashionable building in San Francisco now. It belongs to Salesforce. My mother asked me, “What kind of company is that?

What does it do?” I said, “It automates sales.” I added, “By the way, in 2013 we had one of the best Salesforce implementations in Eastern Europe.” That's how we were regarded. In 2012, I became an owner of Business Molodost, and we wanted to make a lot of money and grow significantly. We started thinking about which automation system

which sales automation system to implement. At that point, Alexander Sagun joined my team: my right-hand man, close friend, colleague, and partner. We'd done a lot together in different places. We sat down and discussed which systems to implement. We chose Salesforce, began implementing it, and achieved one of the best implementations in Eastern Europe. Of course, we invested more than $1 million in Salesforce, and it helped us earn tens of millions of dollars. For Business Molodost, it probably helped generate more than $100 million through the system. We recognized at one point that we needed this company's solution, but by 2020 I decided to remove it from a different organization, GeekBrains, because I saw that a different CRM system was needed there. How do you make these decisions? They come from understanding that when I take on managing a company or become involved in a business, I know sales is part of that business, and one key success factor in sales is having a properly implemented CRM system. Not just any CRM system: you need to know why it's needed in terms of your business's strategy and principles, and how it will affect the achievement of your goal in that business.

What you want to achieve with it. Because for many companies, Salesforce will be unprofitable, unnecessary, and make things worse. You'll lose an enormous amount of money if you implement it. Some need it; others don't. All of this emerges when you know there's a sales area that needs attention. That's the second area of attention. Marketing, then sales. Again, today we're discussing seven, with an eighth as a bonus that I'll tell you about. It's important today to see your own next step as you live through and go over these areas using the examples I can give in this short video, because—

in this short video. Because, of course, you can and should talk about each area for hours, days, months, years. Stay with it, live within it, and understand: what's my right next step now, in sales, for example? What's my right next step now in sales automation, in CRM? Time passes, everything changes, and at the right moment you need to see your own next step. Your own, precisely here and now, right here, in this business, with this team. The third and final fundamental area of influence is product: what your product or service is, what you sell, how you do it, how you create or manufacture the product, or how you deliver a particular service. How you monitor quality and serve the customer within your business. Whether the customer came and bought coffee, ordered a video shoot, bought education, a car, an airline ticket, or a hundred metric tons of crushed stone makes absolutely no difference.

This is an area that always needs tremendous attention. Interestingly, for every person, every business, every manager and professional, there's always an area that most needs attention right now. For some, it's marketing. I call it customer acquisition to make the concept a little broader and fuller. Marketing is part of customer acquisition, because that also includes PR. Some need to focus on sales. Others need to focus on product. But overall—

on product. But overall, whether you're a manager, entrepreneur, businessperson, active owner, or passive owner, you need to look at all of it together, in parallel, throughout your life. You're alive, you exist, and you have an enormous amount of time. Sometimes people ask me, “How is that possible? I'm trying to work on twenty, forty, two hundred, three hundred, or five hundred tasks in parallel.” Because I often say—I like saying—that it's better to complete three hundred out of five hundred tasks than ten out of ten. Yet someone asking this finds it hard to imagine working on forty tasks. Meanwhile, they easily go through two hundred Instagram comments from friends or scroll through four hundred different creators in their feed. Somehow that's easy, while this is hard. Calmly accept and hear this information now: there are different areas, and no single area of attention is equally important for everyone. What's more, sometimes that attention can destroy your entire business or all your money. At other times, even a tiny amount of attention can bring you a thousandfold or ten-thousandfold growth and radically change your life.

For example, in March 2021, my wife and I woke up on a Sunday morning and were lying in bed. It's very rare for us to wake up together, because I usually get up much earlier. I usually get up at five thirty; she gets up at six or six fifteen. On Sundays, she gets up at eight, while I might still get up at five thirty. We quickly asked each other, “Well, are we moving to another country?” Probably yes. We probably need to make that decision now—

“Probably yes. We probably need to make that decision now,” we told each other. Yes! And we made it, despite having four children and an enormous number of other circumstances we couldn't even imagine or foresee. At that moment, we focused as much as possible on the most important event to shape our next step. I gave an example from my personal life, not business, not the seven most important, fundamental success factors and areas in business, to show how important it often is to focus correctly. Of course, over the course of a day we make dozens or hundreds of these shifts of focus. Then there are four additional areas that need attention. The first is management: how you manage the business, what your management team is like, what task management, decision-making, and deadline systems you have, and how you track completed and uncompleted assignments. What automation you do or don't have internally, and how you manage the company overall. The next important area, the fifth, is people: how you define vacancies, your organizational structure, your HR function, the people who hire people.

Your process for selecting those people, how you invite them to interviews, who searches for them, who calls them, who gets them to the interview, and who conducts it. Different people need different qualities for these tasks. The people who call and invite, persuade candidates to come, shortlist candidates, write job postings, decide on incentives, and select people: these all require different qualities. I deliberately say “people” to make it clear that these are different qualities. Of course, they can easily be concentrated in one person, or you might have a whole large department with dozens of people. Then there are the people who support employees internally and later dismiss them. All of this belongs to the people area. A very important—

people. A very important area, incredibly important! I've said and keep saying in many videos, and throughout twenty years in management, that there are two fundamental parts of any business's success that need attention. First, the ability to hear your customer. That's over there in product: getting feedback from your customer. Second, continually hiring people and building your team. That's people, the area I just named. Fifth, people. The sixth area is finance. How many people are out of their depth here! I have a partner here in the Valley, and we're working on an AI project. Actually, it's a whole series of AI projects. As founders, cofounders, and startup entrepreneurs, we're making different assistants, systems, and platforms, sitting together and discussing things a lot. He says, “I don't understand. I'm not interested in these financial calculations; I don't need them. However much I've done in business or immersed myself in it, I don't need to do this.” Understanding finance, being able to prepare proper financial reports, automating reporting, reporting procedures, proper financial documents, the right finance team, financial strategy and planning, comparing plans with actual results, a proper budgeting system, understanding the difference between cash flow and profit and loss, how to calculate and compare correctly.

Without that, building a seriously good business so you can scale—remember, we're talking about wanting to scale, being a person and an entrepreneur who operates on a large scale—you need to know about this. You need to—

know about this. You need to develop in these areas and understand them, including finance. It's an incredible key to tremendous success. Ninety-nine CEOs out of a hundred don't understand financial systems. Nine hundred ninety-nine owners out of a thousand don't understand financial systems. Not because they're complicated, but because that's how their thinking, the information they received, or their perception was structured. Most who say they're developing in this area or understand it will be deceiving you, saying something untrue. I'll talk a lot about this. In fact, I definitely want to make a video about it and will do so in upcoming videos, because we've now made a few cool apps within OpenAI's ChatGPT. There are these apps called GPTs. My friend and partner and I have made a finance app, for example, that lets you create a chart of accounts very quickly, understand what it should look like, and get help with financial accounting. We'll spend a lot of time exploring and developing in this area. Today, as someone involved in several dozen companies as a minority owner, a majority business owner, or simply an advisor and partner consulting with owners and managers, I'd say ninety percent of these companies have a problem with financial accounting.

That's a point that would allow these companies, and does allow many of them, to grow tremendously. Without a proper finance system and proper accounting, you can't build genuinely solid unit economics. And without unit—

economics. Without unit economics, you can't forecast how your business will move forward. I recently joined a project in EdTech, in education, training psychologists. I've been an owner there for more than a month now. My partner and I keep realizing that for all the decisions we could make—practically all of them, ninety-nine out of a hundred—we need to rely on a proper financial reporting system. To rely on it, it can't simply appear today and that's it, we understand everything. We need to take a period, such as 2023, and have it recorded within this proper financial system. Of course, we're doing that now. Once it's in place, we'll be able to make more effective, more targeted, more appropriate decisions about the next step. Many decisions can't be made yet. We discuss which platform to choose for deploying landing pages or educational systems. “Let's first look at the finance system.” What incentive system should we build for managers? “Let's first look at the finance system.” How will we hire people? What will our organizational structure be? “Let's first look at the finance system.” Listen, how will we work with partners on author royalties?

“Let's first look at the finance system.” What will our strategy be regarding other countries? “Let's first look at the finance system.” An enormous number of decisions, all through the finance system. Why? If we set a goal, say, of earning a certain net profit this year and generating a certain revenue to do that, we then need to understand the whole economics. What percentage can we spend on sales, down to fractional percentages? An arbitrary ten to forty percent, or 8.4? Should we spend 25.8 percent on advertising traffic, or some unknown amount? Can we afford to pay forty percent in author royalties,

or only fifteen? Can we spend three percent on equipment, or two? What exactly can we spend, or conversely, what can we receive in the future to achieve a particular result? Do you know what's most interesting? Most people, most entrepreneurs, lack a proper expense accounting system. But to make incredible, correct business decisions, you actually need a properly structured revenue system. A female friend of mine has a husband who's starting a business and has been developing it for a long time. It turns out he hadn't thought through or fully calculated the entire budget. I say, “You know what's most interesting? A huge number of people don't calculate a budget perfectly. But you actually need to think not through the expenses you haven't calculated, which you don't even have, but through a revenue system and understand your unit economics for growth. Think about growth and revenue, not expenses. But if you can't track expenses properly, you'll never even get close to calculating revenue correctly.” Someone thinks they can calculate proper unit economics from revenue alone. They set a goal, say, of earning $40 million in net profit this year, without a clear, carefully considered view of the expense structure, how it'll change, or how they'll jump from $2 million in net profit to $40 million.

That simply doesn't work. There's no path forward in that system. You need to understand this. The seventh area every businessperson needs to know is development. What is development? It's continually working on the connection, the chain linking your goal, your strategy, and the—

tasks you perform. Development is where you allow yourself absolutely any creativity, while shaping all that creativity very clearly and systematically and transferring it to other parts of the business. Development can contain entirely different projects that aren't part of what you do today. For example, your current customer acquisition model might rely on traffic from Facebook or Yandex contextual advertising, or any other system, whatever country you're in. You say, “I'm not interested in GR, or I'm not interested in offline advertising.” But within development, you think, “Could I launch offline advertising?” Development lets you try projects outside your central system. They're always incredibly necessary, and they let you structure things clearly: “Ah, this is development, not our standard day-to-day operations.” This way of thinking means your development area isn't your operating business, but a system for generating a great many creative ideas, continually, endlessly. At the same time, development lets you keep stabilizing the business, saying, “Today, offline sales have become interesting to me, and I'm moving them into the standard operational process.

Today, PR has become important to me, and I'm moving it into the ordinary standard process. Today, GR has become important to me, and I'm moving it into the standard process. Today, international development has become important, and I'm making it a standard, completely natural process.” This leads to very substantial growth and scale. And the eighth area, the eighth point for a person operating on a large scale, in which everyone needs to develop. In practice, people think they understand it because they endlessly delegate it to someone else. But it's responsible for—

the greatest number of real problems in a person's business. Because the biggest business problem is when your own life as a businessperson is put at risk. I call this area security. By security, I fundamentally mean several components: legal security and every other kind of security within it. In some businesses, that includes personal security. In some, it's directly connected to employees; elsewhere, to personal data. It takes different forms: state, economic, political, or customer-related. It's about directing your attention there. What contractual relationships do you have with customers, employees, and partners? How is it all legally structured? What's the organizational structure of your company and business, and how will you grow? How do you operate now, and how will you grow and move forward? How well do you understand this chain of changing events, and can you relate it to different laws or to operating in different countries or one particular country? How well do you understand all the forms of ownership available today? How well do you understand the different kinds of accounting that may apply in different places?

How much attention have you paid to the importance of data security or the physical safety of particular people in your company? How much attention did you give it from the outset, and how well did you understand the different risks that could emerge over time? How truly, genuinely did you understand and see this? For many people, entrepreneurs, and managers, security is precisely the area that needs their attention now.

The area that needs their attention. Security often becomes an active, interesting area for people only when it already hurts. It's like going to a doctor or taking pills to treat something that's already progressing. In reality, you need to address security not just when nothing hurts, but when there's not even a whiff of trouble anywhere nearby, when none of it is there yet and it's all still abstract. You need to start understanding it a little. This applies profoundly to all eight areas. You always need some understanding of all of them. It gives you an entirely different perception, vision, and breadth in how you apply your efforts. I've always said a good manager understands all eight areas and knows roughly 120 success factors across them: things that need to be done, different parameters that need attention. I'll certainly talk about them on the channel and give an enormous number of examples. Know about them, and continually develop in these areas and success factors. Why did I say at the start that you can't know everything at once or learn it in one Reel, Short, ten-minute video, hour-long video, one course, or even one, two, or three years?

At some point, I even realized that a good system for educating managers would be one that made a point of trying to pass on knowledge of these eight areas. At least give people that knowledge, so they have a map to navigate by and remember that these areas need attention in business and at work—

in business, at work, and in their own labor, every day. There are many more such areas in life. Here on the channel, with me, Alexander Volchek, I try to talk about business, life, and spirituality, so that over time you can encounter new knowledge—sometimes through one short video or a long one—that, right at that moment, especially now that you've watched this to the end, lets you find something for yourself. The next step you need to take here and now. And the dozens, hundreds, thousands of next steps that will appear in an hour, a day, a week, a month, a year, ten, twenty, thirty, forty, or for some people fifty or sixty years: the steps that lie ahead as you move through time. Our lives don't end with this video today. All of this is the movement of life. I'm glad to see you here. Until next time!