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Scaling A Service-Based Business: When & How To Grow

How do you know when you’re ready to scale your service-based business? 

When to start your business and when to scale your business are two different things. 

Often, people overthink when to start a business and over-prepare to the point where they get analysis-paralysis and end up postponing it—for months or, even worse, for years. 

They say “any time is a good time to start a business.” 

However, in scaling a business, that’s not the case. 

There are a lot of factors to consider when scaling. There’s a right time and the right way to do it. Otherwise, you’re only going to waste money faster. 

So if you’re in the lead generation space owning a service-based business, then listen up:

In this post, we’ll talk about when and how to grow your business, some challenges you might face, and how to overcome them

Table of Contents

When to Scale a Service-Based Business

To scale or not to scale a service based business

Ideally, you’ll want to scale once you consistently hit your goals. You may need to wait longer if you hit your goal this month but not the next.

Waiting longer, maybe a couple more months, gives you a sense of how well your campaigns are doing—whether or not they’re in the right direction. That’s the time you scale.

Another thing to consider is if you’re hitting your max budget. 

For example, one of our client’s cost per acquisition (CPA) is $166. The amount they’re willing to spend for a lead is $200. They aren’t maximizing their budget, leaving a lot of leads on the table. 

Instead, investing that $34 to scale their campaign would be better. 

So, should they just increase their budget right away?

How to Scale Your Business

One of the common mistakes people make when they scale is increasing their budget and expecting results to happen overnight. Here’s the thing—it takes time for Google’s algorithm to learn, and it doesn’t know yet what to do with all the extra budget.

Instead, scale slowly. We recommend adding 20% to your budget. Then, give it a few weeks to run—maybe up to four weeks. If things go well and your average stays the same, add 20% more.

Keep adding budget, waiting, and adding more until you reach your maximum.

When CPA Goes Up

When you add more budget, your CPA will temporarily go up. That’s normal. Again, the algorithm is still learning—it’s looking for people and places to target. 

Then, your CPA should return to where it used to be. In that case, our client’s CPA should be back to $166, give or take. 

But what if it doesn’t? Let’s say the client’s CPA is now $200 and they’re hitting their goals. But they still want to scale. 

If that’s the case, then don’t add more budget. You may be starting to run out of market size, and adding more budget just won’t work. 

Lost Impression Share (IS) And How It Works

Search lost impression share (IS) is a metric in Google Ads that measures the percentage of impressions that your ads did not receive due to issues like low ad rank, low budget, or low ad relevance. 

In other words, it’s the percentage of times your ad could have been shown to someone but wasn’t.

search lost impressions and how it works

There are two types of search lost impression share:

Search lost impression share (rank). This measures the percentage of times your ad did not show up due to a low ad rank. Ad rank is calculated based on factors such as your bid, ad quality, and landing page experience. If your ad rank is low, your ad may not appear as often as possible. 

For example, if your search lost impression share (rank) is 40%, it means your ads didn’t show up 40% of the time due to a low ad rank. 

Search lost impression share (budget). This measures the percentage of times your ad did not appear due to a low budget. If your daily budget is too low, your ad may not show up as often as possible.

For example, if your search lost impression share (budget) is 40%, your ads did not show up 40% of the time due to a low budget.

How to Reduce Lost Impression Share (And Increase Your Total Impression Share)

how to reduce lost impression share

If you want to reduce or minimize your Lost IS, here are a few things you can do.

For Lost IS (budget):

As long as you have some wiggle room and you’re not above your CPA threshold, increase your ad budget until you reach 20% or even 10%.

For Lost IS (rank):

Increase your bid (or improve your ad quality.) Your competitors are bidding higher than yours, so increasing your bid can rank you better.  

Remember, increasing your bid or budget will affect your CPA, and it’s up to you how you’ll balance both. 

Now, sometimes, you’ll find that you can only reach 20% when you’re over your CPA. Well, that’s okay, too!  

For example, with our client, they may discover their leads from Google have a very high quality, which means their original assumption that they could only spend $200 per lead was incorrect. 

Instead, they may find that they can actually afford to spend an average of $220 per lead.

Other Ways to Scale a Service-Based Business

Increase your lifetime value (LTV). By offering complimentary services to your customers—upselling and cross selling—you’ll get more for every dollar you spend acquiring them.

Increase your market size. By changing your targeting, adding keywords, then forcing the algorithm to go after those keywords, you can increase your total impression share and eventually have a bigger market.

Tips to Reduce Your CPA

Improve your conversion rates. Focus on making your website user-friendly and optimized for conversions. Doing split tests and experimenting with different homepage edits. You can also add videos to increase engagement and create marketing opportunities. 

Hire a call answering service. Many lead generation businesses miss potential leads just because of unanswered phone calls. If that’s you, then consider using an all-in-one call management tool like CallTrackingMetrics or better yet, hiring someone that can take leads while you’re out.

Conclusion

Scaling your advertising campaigns can be very exciting, but keeping your cost per acquisition in check is essential. By implementing the tips we’ve discussed, you can take steps towards lowering your CPA, maximizing the effectiveness of your advertising, and scaling your business. 

So, if you’ve been hitting your CPA goal and there’s some wiggle room, go ahead and scale! 

Just remember to monitor your CPA and adjust your budget accordingly.

Author

Bryan is the marketing manager at Solutions 8, and has been on digital marketing since 2018. When he’s not working, you’ll find him working out at a local gym, reading personal development books, or playing music at home. He feels weird writing about himself in third person.

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