Scaling up to achieve success => Chicken or Egg?

[Greg Scott]

On the BP podcast they have been talking about scaling lately and I've seen numerous posts here with people asking how to achieve scale.  Here is an exaggerated example of what I have seen:

"I have three rental properties.  They each cashflow $200 per month before vacancy and repairs.  The occasional repair or vacancy has eaten into my cash.  I have $5K in the bank.  I want to do a BRRRR but all my rentals are at 80% LTV.  Can I get a HELOC or a private loan?  I want to grow my business.  How do I scale up?"

When I see posts like this, it seems the worst thing they could do is scale.  Making a bad business model twice as big, doesn't make it a better business, it just digs the hole twice as fast.  Frankly, I think most are getting it backward.

I'd rather see people focus on generating great profits.  If you have figured out a great business model, then scaling is easy.  You have your own profits to reinvest.  If you want to bring on additional capital, there is enough to pay your lender / investor and YOU.