How to Start a Million Dollar Business
Hint: Take yourself out of the equation
A healthy business is scalable.
Every investor parroted the magic question on my first Startup Week in China. Tycoons, talents, and competition wanted to know how fast can we expand the business. Venture investors took the stage with grim tales of losing millions with companies that just couldn’t grow. The ominous chant was stuck in my head by the end of the week. “Scalable, scalable, is your business scalable?”
The idea we pitched at the event was attractive for international investors. Education was all the rage in 2019 in China. My team proposed an app for private 1-on-1 tutoring. The idea was to liberalize the education market by offering students the freedom to choose their educators. Our users could order a piano lesson in the same way they order food. We called it UberSchools as a running joke. (I won’t disclose the App name due to obvious legal implications.)
Enterprises, Government officials, and individual investors wanted to jump on the education train. At one public event, a Chinese government offered to finance the project with an additional 100 000 000RMB. We dismissed it as a publicity stunt. Politicians can’t resist giving wild promises when journalists are around.
We foolishly declined the following offers thinking we can fund our idea with the cashflows from another company. The leading developer quit months into the project, and we got carried away by other stuff.
Good business ideas fail faster than new year resolutions.
But I won’t forget a question parroted by every investor: “How scalable is your business?”
A healthy business can handle rapid expansion. If you can grow the customer base and fulfill demand, you have a scalable business.
How to make your business scalable? You’ll need a set of rules and principles that are proven to produce good value.
In the globalized world, scalability is investors’ porn. Money institutions want to award ideas that quickly win over hearts of masses.
If you’re a business owner — blogs and websites count too — you’re wondering how to make more money. Such questions are typical in any business. The bottom line is to make a profit. Otherwise, you’re running a charity.
One question will tell if you’re running a business or if you are a business. The latter can’t survive without you, and the former can make millions.
Ask yourself. “Am I replaceable? Is every person that works with me replaceable?” If the answer is no, you don’t have a million dollar idea. You have a boutique.
If you’re the only lifeline, you’ll have trouble making more money. You might suffocate on a miscalculated burger bite tomorrow. And your business would be gone forever. Your family and employees would have to close shop.
Now, let’s imagine a scalable business. Apple is an epitome of success. The company skyrocketed in value after the death of Steve Jobs. Tim Cook — a successor and the current CEO — made Apple into the wealthiest public company. Why? Because Apple had a working system that can function without the founders.
If a hurricane hits Apple factories and kills the upper management in one cataclysmic event, the shareholders could still raise money, hire new people, and continue producing new technology.
The moral of the story: Healthy business is a scalable system.
A business needs a set of rules and principles to produce constant value. How can media outlets, bands, and startups make money with new employees?
“A business system is designed to connect all of an organization’s intricate parts and interrelated steps to work together for the achievement of the business strategy. … Creating effective business systems often unifies the problem solving and decision making of the organization.” — LeanMethods
Bands like Joy Divisions and AC/DC have done the same thing as Apple. The bands grew even more successful after their frontmen died. The frontmen were unique artists, but the bends had systems to make what they make best — good music.
Your blog or a writing career can use the same advice.
Don’t just write, create a system that will help anyone write the same way you write. Create guidelines to make the engine roar long after you’re gone.
Individuals produce chocolate and beer, but they’re not Ferrero Rocher or Budweiser. Blogs become Media powerhouses with the right systems. Medium doesn’t have to write a single article to deliver excellent writing. Do you even know the founder of Medium? Evan Williams started the platform in 2012. But you don’t need him to profit from his idea. Your next story can change the world without the man. But you need his platform.
If the boss is irreplaceable, the business has a problem. Investing in one person is not a long-term option.
A right system will grow your ideas beyond belief.
You probably can’t imagine your blog or your art without yourself. Founders have a problem of letting their creations run free. But to create a great business, you’ll have to take yourself out of the equation.
A million-dollar company is nothing more than a set of rules and principles that others can follow.
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