How We Increased Revenue By $100k Every Month
When my boss approached me to help him run his small business, he had two contracts with total revenue of $365k per year. I had run my own businesses in the past and knew a lot about the industry he operated in. With our shared values about how a business should operate, we had a great foundation for growth.
Fast-forward 16 months, and we’ve grown our small business by $100k per month to revenue of $1.95M. Here’s how we did it.
Don’t Concentrate on the Money
Except for Gary Vaynerchuk, anyone peddling advice these days has their focus in the wrong place. Trying to make a fast buck on any business model is a good way to not make any money, ever.
Before jumping into this small business, I had a pattern of starting and failing (we call it “learning” now) my own businesses. The pattern looked something like this:
- Draw up a business plan based on a solid idea
- Find a no-cost method to start
- Be willing to work day and night
- Check my stats and income daily to see where I was at
- Slowly watch my business spiral into abject failure
- Rinse and repeat
After each venture, the only lesson I recognized was how to fail at things. But when you fail, you learn an important lesson about where it could have gone right because you can see the particular areas where you went wrong. Eventually, I identified these areas, and each business after the previous one lasted longer, was more fulfilling, and made me more money.
My final business was chugging along at a steady pace and was going the distance, but I couldn’t afford to put any sort of infrastructure in place to make it really take off. That’s when I met my boss and decided to fold my company and join him.
When I started, I was shocked to find that the owner (my direct boss who recruited me to be his Number 2) didn’t have a business plan and didn’t know his profit margin (or any bottom-line numbers at all). Yet, he had earned enough to pay me to help him grow his business.
This was an area where I had always gotten it wrong –– the constant need to check my stats and see where I was at. My boss, however, has a way of looking at time and money that would have made all the difference in my own business pattern:
Today is an investment for tomorrow.
It didn’t matter if he didn’t make money, so long as he had enough to invest back into the business, that was all that mattered. The only time we counted anything during those early days was to make sure we were not in the red.
Trust and Reinvest in Your People
That lesson about money and investment-mindedness out of the way, I was ready to deploy my knowledge to help our business grow. When it came to the operations of a company, I had that part down. And the best part: my boss was willing to take chances on my ideas. It was why he hired me, after all.
In my first three months, we added a $93,000 contract to our portfolio. It was a big jump for us, to be sure, adding almost 30% of our overall revenue in three months. Looks like a good time to go hit the beach, right?
We funneled that money into more infrastructure.
“You’ve gotta build deep if you want to go high.” –Zig Ziglar
We added more employees, got a proper office (spreading our paperwork on the tables at Starbucks wasn’t cutting it anymore), and continued to look to future growth.
The Customer Is Always Right
One of my core values has always been to make sure the person paying my bills is happy. If they’re not, they might stop.
So when I received a request from an overly demanding client, I didn't tell them that was outside of the mandate of our agreed-upon contract. I stepped up and handled that business!
No one wants to hire a cold corporate company to serve them. They want an agile, ready-to-work group of people who can meet the needs that were not obvious at the time of signing. If you nickel and dime them for every request, you might make some money today, but you’re sacrificing tomorrow to do it.
Today is an investment for tomorrow, remember?
Take that costly request and say: “absolutely, I’ll take care of it!”
Focus on Building Your Reputation
Meeting those crazy requests and allowing your clients to call your personal phone anytime they need to, day or night, may bang up your mental health a bit, but it will pay for an army of therapists in the long run.
We quickly built a reputation as the guys who are looking to be partners with our clients. Their goals became our goals.
If we had focused on exploiting our clients with every service imaginable, we would never have stood out from the crowd.
Let everyone else set the standard, then do better than they ever could.
In our industry, we were the little guys going up against global umbrella corporations with all the money in the world to throw at getting contracts. Yet, we beat them every single time!
If we got the opportunity to get in front of a potential client, we didn’t tell them how much better our product was than people who clearly had more money for better widgets. We told them how we’re small, so we’re agile –– no red tape or requests to a corporate helpline for changes to your service. Call me and I’ll have your request met within the hour. And not some account manager, either, but the owner and the Director of Operations are at your disposal.
That personal touch, giving access to the top echelon of our organization, day or night…that was hard. Sometimes, it was downright impossible. But it earned us a reputation that was more valuable than any revenue stream.
Hang In There
Like a bad movie, there’s a midpoint slump in the second act where it feels like your company isn’t growing. We suffered through this for several months after adding that $93,000 contract.
The feeling like you’re making all of the right moves, investing in all the right places, and yet no one wants to take a chance on you…it sucks.
Don’t waste that time wallowing in self-pity. Use it to continue to build your reputation. We never spent a dime on marketing or advertising. No one ever learned about us from some billboard or Google Adsense campaign. We were, and still are, a 100% word-of-mouth company. We have to be. We don’t have the money to compete in the advertising game with those globe-spanning companies we’re up against. We need you to have heard about our reputation from someone we’ve knocked the socks off of, and that takes time to spread.
Keep at it. More business will come, just like it did for us.
Protect Your Culture
We have a “people-first” mindset. The idea that someone feels stuck and miserable at our company would lead us to close the doors forever, no joke. What’s the point of business if it doesn’t provide the resources to live life the way you want to?
Culture eats strategy for breakfast. –Peter Drucker
We exploded out of our midpoint slump with four contracts that added $600,000 in revenue in a 30-day span. That reputation we had spent so much time focusing on paid off, BIG TIME.
With that growth, however, came long, stressful workdays that demanded more of that infrastructure. But as we added more people to our team, we started seeing the evils of corporate politics and gossip that we had been able to avoid up until then.
Want to know the fastest way to lose employees? Let them start talking shit about each other, and your company, without any recourse. The first time I saw it creep up, I stamped it down with what has become my battle cry against gossip, slander, and backstabbing:
I’ll train bad performance for months, but I’ll fire bad culture in a heartbeat!
If someone cares about the company and wants to work, you can train them out of any work-performance issues. If they don’t care and have a terrible work ethic, no amount of training will ever keep them from dragging the culture and reputation of your company into the dirt.
If your house is divided, it will not stand, and certainly can’t grow. The hardest challenge we’ve had to face, by far, is protecting our positive, family- and people-first company culture.
Set Your Endgame Goal
The final lesson we’ve learned so far. A few months after getting those $600,000 contracts, we gained an additional $300,000 in small contracts, and then one big one for $500,000.
Side Note: the pattern of setting up more infrastructure leading to explosive growth is the reason we invest in that direction, and has certainly paid off.
It wasn’t until we got to where we are now, almost breaking $2 million in revenue before my boss took any sort of raise beyond the bare necessities to meet his family’s needs. At some point, you have to start making a profit, sure, but we had it planned from the beginning.
My boss knew how much he wanted to make out of this business. He asked me how much I wanted to make. We have that same conversation with everyone who works for us. Once we learned how many employees it would take to meet the demands of a certain level of business, and what those employees needed, we were able to come up with our endgame.
Too many people in business look at profits as an endless source of becoming Bill Gates. Our argument: without a target to shoot for, how could you possibly hit it?
Once we looked at our bottom line (we didn’t ignore that forever), we set a goal that would meet all of our needs. Once reached, we will begin turning down new clients and working to improve the quality of our standing business portfolio. And we’ll do it having met all of our goals for personal growth, fulfillment, and financial needs.
Where We Are Today
We still haven’t hit our endgame goal. In fact, we’re only about 20% of the way there. But if the average increase of $100k per month continues, we will hit that goal within the next few years.
That growth didn’t come from employing a new business strategy peddled by some mastermind class, nor did we get into some pyramid scheme to take advantage of our employee’s personal networks. We built that revenue using the tried and true values of integrity, hard work, and being incredibly service-minded, not only to our clients but to our employees.
No one in our organization has a college degree. All of our parents were blue-collared workers. The owner worked a day job for ten years to save the starting capital for this business. If we can do it, anyone can, but it will take time and it won’t be easy.
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