Every business owner seeks to break the fabled 1 million dollar mark, and quite honestly, a lot of business owners never do and their excuses are usually something along the lines of:
- There isn’t enough market for my product
- If I get that big I won’t be profitable
- I don’t want that much work on my plate
- I can’t enjoy my life if I have to be that big
The list goes on and on…
Personally, one of my favourite things is reminding people I work with of all the excuses they had 12 months ago when they smash their 7 figure target.
The look on their face is priceless!
It’s for this reason I want to share the five steps I believe every business must go through in order to move from approximately 250k to 1,000,000 in a 12 month period.
Step One – Know How You Monetise
This seems incredibly simple. There are generally two types of ways to monetise. You either sell a lot of inexpensive items to a lot of people or you sell a few high priced items to a select group of customers.
Then you ask yourself, do I have the ability for ongoing sales or do I need to build a machine (sales funnel) that will provide an ongoing source of income?
An example of this would be a telecommunications company, with a high front-end cost for sale, however they knew that if they had a client base of 15,000 with an average monthly plan of $50 dollars, they would gross $750,000 per month.
They had a high front price to get the client, but monetised consistent revenue with low cost for a 12 – 18 month period. This allowed them to structure their investments very wisely and easily secure an 8 figure return at EOFY.
Step Two – Know Your Numbers!
Once again, this sounds surprisingly simple right? Of course you need to know your numbers.
It would amaze you of how many businesses have no idea of the intricate costs related to their profits.
Some of the key things you need to know are as follows:
- How much does each lead cost for me to generate?
- What percentage of leads do I close?
- Of those leads closed, how many can I resell my products to?
- Do I upsell my products?
- Do I close enough leads to justify the ones I do not close?
- What is the maintenance cost of each customer?
- What are my expansion costs?
- What percentage of my total job capacity am I at now?
Almost 7 out of every 10 businesses that come to me seeking to break the 1 million dollar mark fail to even realise how much they need to spend to generate the leads required per week to even give them a shot at making it.
Business is a game of numbers. If you don’t know them, you will lose and get hurt. It’s like playing water polo without knowing how to swim.
VERTEX have a simple Lead Tracking spread sheet that can be downloaded HERE
Step Three – You Have to Be the Best!
(INSERT MOTIVATIONAL STUFF HERE…) I know, it’s another vague ambiguous statement about achievement. All I need now is to have a picture of a beach or something right.
However… it is so true!
If you do not consistently seek to be number one in your industry, you will find it impossible to break 7 figures. There are plenty of mediocre products and services out there and you need to differentiate yourself.
Then you need to continue to differentiate yourself ALL THE TIME!
You want to have your customers raving about their experiences with you. Bring something to the market place that WOWS them! They will love you, they will get others to love you and they will save you so much money on marketing.
Remember even when you are number one, you better feel like you are number two because there will always be someone coming up behind you to take your spot.
Step Four – Surround Yourself With Excellence
In order for you to break 1 million dollars, it is going to require a team. I would be dumbfounded if you could do it all on your own and frankly would say it is impossible.
I know that the temptation is to hire low cost employees in order to make sure you can keep expenses low, but I guarantee you will not be earning 1,000,000 dollars with a group of underachievers. If I was to be really honest, they are most likely going to cost you money in the end.
Now this may seem like a no-brainer, but hire where you are weak. If you need better sales, hire good sales people. If you need better product completion rates, hire better operations management. It’s not complex but so important.
An interesting concept used by Amazon to ensure a lean high performing team is explained HERE.
Step 5 – Lead the Way!
This is arguably the most important step. If you really want your team to function so well that they generate a return of $1,000,000, you must remember they are not going to work harder than you!
As a business owner your mindset, attitude and work ethic will be the ceiling on your employee’s efforts. An employee will never out work their boss.
Watch your thoughts, actions and mindset around your staff. Praise them in their wins, support them in their losses and give them the accountability they need to excel.
You are the captain of your ship and you steer its direction. If you start letting things slide then of course your staff will. If you start turning up late, of course your staff will.
Be the perfect staff member to grow the perfect staff members.
Then you get to play the awesome game of getting from 7 figures to 8!
Need to know how to lead a team effectively check out this link: HERE
Aidan Parsons is the Director of Business Development at Keystone Executive Coaching, an Australian Based Consultancy firm specialising in business development and corporate leadership.
Business Strategy Success