We all dream of it: making $1 million in revenue. This arbitrary number has become a symbol for success for small business owners, and while struggling to reach this major milestone, realize this: once you get there, the way you run your business will change. In fact, it probably will have evolved over time as you crept closer to that revenue goal. I always think it’s important to prepare for the next level in your business. I interviewed several business owners who have made $1 million or more in revenue, so that I could share insights into how things will change.
You Let Go of the Micromanaging
Rahul Alim, President of Custom Creatives, a digital marketing agency, said that growing his business to $1 million in revenue meant he had to let go of trying to do everything. “I went from doing 100% of everything in my business to letting things go and stopped micromanaging everyone as we grew by headcount. It gave me flexibility to delegate and focus on high priorities rather than cold calling, filing, or other administrative tasks.”
You Work Harder
Understandably it’s thrilling to reach that point of knowing your little business is secure financially. It validates your hard work and lets you know that anything is possible. Blair Critch, Le-Vel Brand Promoter, started out as an entrepreneur simply wanting to help support her family. But once she hit the million-dollar threshold, she began working even harder, with no obstacles in front of her. “When you see yourself accomplish something of this magnitude you become unstoppable and truly understand what ‘the sky’s the limit’ means.”
Your Perception of Money vs. Time Shifts
Most small business owners go out of their way to save a buck, and that’s understandable when budgets are tight. But as you grow, Marcio Souza, CEO and Co-Founder of Clutch Prep, said that how much energy you put into saving money will change. “One way in which we have had to adapt continuously, as we grow, has been with regards to calibrating how we value cash vs. time: whereas in the early days it made sense to spend days to save a few hundred dollars, now that we have more revenue, it’s often wise to ‘pay’ more to save staff time to move faster.”
You Must Stay Willing to Adapt
Lisa Chu, owner of Black N Bianco clothing retailer, said yes, hitting her first million was a huge deal. “I worked very hard and for many years to achieve this success. Things remained the same because I value the importance of staying humble. In business, things can change in an instant, but by staying humble it keeps me sharp and willing to adapt and learn.”
“Absolutely, it is a big deal. My lifestyle stayed the same. But now it just makes traveling with your loved ones and treating yourself easier. We definitely have been taking the kids on more trips so that they can experience what the world has to offer.”
How to Grow to $1 Million in Revenue
Naturally, the question on your mind is “how in the heck do I grow my business to $1 million?”
Here’s how these entrepreneurs did it, so take notes.
Focus on Attracting New Customers
Alim of Custom Creatives said his team spent a lot of time focusing on how to attract new customers, as well as developing solutions to grow their clients’ businesses. They also expanded their offerings to encourage clients to spend more with them.
Build Brand Awareness
Chu said she put in many years of hard work trying to build credibility for her brand. She provided excellent products and customer service, which eventually created more brand awareness purely through word of mouth. “Being a small business that had a personal connection with my target audience was the catalyst to my success.”
Make Yourself Replicable
Critch has more practical tips to grow your business. She said that in addition to making sure you love your business enough to work hard over time, you should also make yourself replicable. “This doesn’t mean you will be replaced; it just means that you’ve trained your people to ‘think as you do’ so they can function independently, leaving you more time to find creative ways to grow the business.”
Invest Outside of Your Comfort Zone
Changes in how you operate your business don’t just start at the $1 million threshold. Jeff O’Hara, President of AlliedPRA New Orleans, said that it’s easy to find yourself stuck at a certain revenue level unless you invest outside of your comfort zone. “Bring on new sales people and team leadership before the revenues justify the expense, that’s what we did. In other cases, in means investing in new products or inventory, or upgrading technology. It’s scary, and it happens before you get to $1M, happens again before you get to $3M, and on and on as the business grows.”
Grow Your Profit Margins
It wouldn’t be the SmallBizLady, if I didn’t add my own advice to get to one million in revenue. Dig deeper in your niche. Figure out how to become the #1 resource for what you sell. Stay focused on increasing the profitability of your company. It’s not just about your revenues and build a processes and systems that will allow you to sell your business one day, if you want too.
But…Is Hitting $1 Million Even a Big Deal?
Yes, for some. But it is an unscientific measure of success. It does signify that a business has a sustainable business model, it can be a false sense of success too. At the end of the day, it’s not what you make, it’s how much you keep. Back in 2007, when I was writing my first book, Become Your Own Boss in 12 Months, I almost didn’t finish the book because I didn’t think I was successful enough. Imagine all the people who would not have been helped to grow their businesses had I bought into that ideal.
Grossing $1 million in revenue is a major accomplishment. And when you get there, pat yourself on the back. It’s a milestone that relatively few small businesses ever reach, so be proud of yourself and your company. Then develop a strategic plan to hit $3 million. It never stops….