Five strategies to make your first MILLION
For some reason we are led to believe that if we could just make a million dollars that all of our problems would go away. The stats of small business owners are horrific. Less than 4% of all small businesses in the world will ever generate over a million dollars of revenue. That’s not profit. It’s top line revenue. That leaves 96% of those that start or grow their own businesses with less than a million in revenue. Out of the 28 million small business owners in the country 21 million only have one employee and generate less than $47,000. This is why many say, “You’re first million is always the hardest.”
There’s a difference between earning a million dollars in personal income and being a “net worth millionaire” which is where your assets minus your liabilities add up to over a million dollars of “net worth.” Only 10% of small businesses ever make more than ten million in revenue so when you get to these points you are doing something and being successful from a monetary standpoint.
This article is geared to building a business that generates over one million dollars of revenue for your small business and hopefully puts $250,000-$500,000 in your personal pocket. Here are five ways that hopefully will help you begin to think about scale in your business. I’ve made many of the small business mistakes including originally building the entire business around me and then having to re-calibrate to concepts that don’t involve me later. Let’s save you this time on the front end by designing your business appropriately:
- Know this: A business is designed before there is a business. A poorly designed business will always have to be re-calibrated down the road. This means the first step is to build a business that is scalable, repeatable, and sellable. It cannot be around one person.
- Many people suggest to build a business based on products vs. services. When you get into the service business you are getting into the “people” business and people always bring lots of baggage with them. A product can be sold and then you move on with very little customer service. Just know if you build a heavy service business that there will always be lots of handholding and drama which create an “emotional tax” on you and your team.
- Get in to a business of something that people “have to have” vs. disposable income businesses. People have to have transportation, food, energy, and housing. Businesses that sell disposable items get crushed when budgets get tight and you are constantly having to “convince” people they need your product or service.
- Create at least three to five differentials when designing your business. We live in a saturated and commoditized world. For your sales team to sell your product or it to sell off the shelves it must be OBVIOUS to the consumer what makes it different and better than others, especially if it is more expensive than others. If two opinions are the same then one of those is unnecessary. Think Zebra.
- Think of it this way: You can create something that will help a million people who would pay $1 for it or you can think of something that 10 people would pay 100,000 for. I call this the “Blue Gill vs. Blue Marlin Strategy.” You can wake up and chase blue gill in the local lake (the $1 customer) or you can fish for blue marlins in the Gulf of Mexico (the $100,000). You get to pick which one you are working for and looking for. This has to do with your weekly targets.
It took me seven years to build a business that could earn over a million dollars of revenue. To this day we are re-calibrating and creating concepts that do not require an injection of me daily to sell or deliver. We are creating products vs. services. We are building something that can repeatable, scalable, and sellable. We are creating something that could be a legacy company and passed on to my children should they want to run it. If I could speed that up for you in your life with these five things I wish someone had told me on the front end I may could have done it much faster.
You have a song to sing and people to sing it to. Step back and figure out how your going to sell the albums vs. just sing the song.
For excellent books on this subject read “Built to Sell” by John Warrillow and “Rich Dad, Poor Dad” by Robert Kiyosaki.