If you’re an online business making good money, but with a drive to make a much bigger impact …
… then keep reading, because we’ve been studying Pre-$1m online businesses (those making $20k – $100k per month) for the past several years.
And we’ve found 15 critical lessons that make all the difference.
Lesson 1: Don’t Stop As Soon As Something Starts Working
There’s a threshold that happens around 250-300k, at which point you need to change how you do business if you’re to continue to grow.
Unfortunately, too many people think that change means doing something new, rather than figuring out a different way to do what’s already been working.
The former almost always leads to heartache and feeling like you’re starting over. The latter leads to rapid growth.
Find “The Thing” and once you’ve found it, run with it. Don’t stop as soon as it starts working!
Lesson 2: Make the Thing, Sell the Thing
Until you’ve got a reliable, scalable, profitable product, your only job is to figure out how to sell “The Thing” reliably, scalably and profitably.
You’ll know you’re at this point when you have confidence that the sales will keep coming, even if you start to turn your attention to other things.
If you don’t have that confidence, you don’t have the sales dialed in enough yet.
Lesson 3: When It’s Time To Work on Operations
Once you’ve got your scalable, profitable, reliable product and you know both how it will sell and how it will scale, THEN you can (and need to) turn your attention to growing your business to match.
That means growing your team, improving profitability, streamlining operations, and so on.
Lesson 4: Your Approach to Team Is Part of the Problem
Many business owners try to build their team on the hub-and-spoke model, where every decision still has to go through the owner.
They also try to hire low-level technicians to do tasks, rather than hire leaders who will take complete ownership over their area of the business.
And then they wonder why they feel like they no longer have time to be creative.
Lesson 5: Our Best Clients Really Just Want To Get Back to Being Creative
Speaking of being creative, it’s the #1 thing that our best clients want:
They want to get back to being creative. To have the time and space and energy and support so they can create. They want to write books, do speaking, and just generally be able to generate ideas.
The problem is, they don’t know how to do that; the good news is, we do.
Lesson 6: Do What Feels Easy
For me, writing daily emails is a great way to be creative and not feel the pressure to always create something “amazing” (which, ironically, has led to the best responded-to content we’ve EVER produced).
Do what feels easy, talk to the people who really want to hear from you, and ignore the rest.
And if you’re really ambitious, you can delete 2/3rds of your list by asking everyone to opt-back-in and re-engage, and cleaning off those who don’t.
Some people will be mad that you’re forcing them to do so; but they’re not your people. So who cares?
Lesson 7: Stop List Building
List size is useless. USELESS.
So, don’t do list building.
Do lead generation, instead.
They are NOT the same thing.
Lead generation is how you get people to buy, and guess what — if you’re doing it right, most people will buy within 30-60 days of hearing about you. As in, 80%+ of buyers.
Which means that you have two choices: you can spend a lot of time and energy nurturing the other 20% hoping that they’ll convert some day … or you can find new leads and sell to them.
Only one approach really makes sense …
Lesson 8: If You Don’t Know Your Numbers, You’re Not Alone
And speaking of numbers, too many businesses don’t know their numbers.
Not even the complicated numbers; just simple ones like:
- How much profit did you make?
- How much did you pay your team?
- What’s your tax burden?
- Are you paying yourself enough?
- Can you afford a new team member?
- Is your advertising actually making you money (and how much)?
Bonus: there are benchmarks for these things, people.
You don’t need to reinvent the wheel, but you DO need to know YOUR numbers so you can COMPARE them (or, you need to have your numbers so you can GIVE them to someone so THEY can tell you how you stand)
Lesson 9: Benchmark $$ for Team
Some of the benchmarks are:
- You can have one full-time employee for every $200k or so in revenue.
- You should be spending no more than 50% of your real revenue on team costs, including the salary you pay yourself for work done in the business.
- The way you build your team is to build your profit to 15%, and then drop it to 10% while you re-invest, until you re-build back up to 15% profit. Rinse, repeat.
Lesson 10: Don’t Decide How Much To Spend
And speaking of money, most business owners have a completely backwards approach to money.
You don’t decide how much to spend, and then figure out what results you can get from that.
What you DO, is you figure out where you’re going, then figure out what it will cost to get there, then figure out how you’ll get that money.
Lesson 11: Making $1m in a Year Isn’t The Same As Being a $1m Company
Making $1m in a year isn’t the same thing as having a $1m company.
You need to have the guts, the structure of $1m company — with the team, the spending, the products, the customer experience — well before you hit the actual $1m mark.
Because a $1m year is built on several $100k+ months. Which means that you’ll be on a $1m run rate before you have your $1m year — and the run rate is what dictates how you need to operate.
Lesson 12: Who Can Do It Instead?
But you don’t have to do it alone. In fact, you shouldn’t.
The problem with the “Genius With a Thousand Helpers” model is that all the pressure lands on your shoulders. It means that you are forced to spend too much time outside your zone of genius.
The goal should always be to spend MORE time in your zone of genius, and that means that when it comes to doing a new project, you should be asking “who can do this INSTEAD of me” not “who can help me do this.”
Lesson 13: Ask The Right Questions
Which is related to asking the right questions. Here are some of our favorites:
- “What’s the least complicated way to accomplish ____?”
- “What would it take for us to invest _____ in our business?” (where ____ is usually 5-10X the biggest investment you’ve made to date)
- “What would a product that costs ____ look like in our business?” (where ____ is usually 5-10X the biggest sale you’ve made to date)
- “What would happen if you didn’t _____?” (where _____ is something on your to-do or project list)
Lesson 14: Or, Just Ask This One
Plus, a special shout-out to the BIG question that we’re working with clients on: “What’s the ONE thing we can do that will 2X the results with 1/2 the effort?”
Lesson 15: We CAN Answer That Question
And finally, we’ve learned that it is entirely possible—with the right questions, the right expertise, the right analysis and the right process—
To disassemble a business, figure out what to keep and what’s not working, and then figure out how to rebuild it so that it looks and acts like a $1m company (even if you’re only making $250-300k right now).
With a plan for how to get there, and support as you do so.
And it’s awesome.