HOW TO BUILD SEVEN FIGURES BUSINESS
Imagine a million dollars right in front of your eyes.
You’re holding it with both hands and feeling proud of yourself.
You finally made it!
What if at this moment you can buy whatever you want, discover every place you want and with whomever you want?
You can eat the best food made by the best chefs in the best restaurants and hotels across the world.
Imagine that you will have the power to donate a portion of that money and put it for good cause, lift some people out of poverty, or lack of education or even put a simple meal on the table of a hundred families.
Take a moment and close your eyes for a second and imagine that. Isn’t that magnificent?
Indeed, I know how it feels from a personal experience.
My family used to generate that amount of money running a small chocolate business.
Making a million dollars in business isn’t as complicated as you might imagine, but it also isn’t as easy as many gurus say when they try to sell a program that gets you rich quickly.
To make a million bucks in business, you will need four primary things. None of them should be missing.
If you get these four elements right, you will make a million dollars or maybe more, and if you don’t, you probably won’t make a million dollars, regardless of how hard you hustle.
What I love about business the most is that it's pure numbers.
There is no drama or feelings about it, it’s logical and straightforward.
There are a million ways to make a million dollars in business. However, I’m going to save you some time and give you the fastest way to make that million bucks.
1. Sell Premium Quality or Expensive Products
If you want to make big numbers fast, then you have to transact in big numbers.
If you sell a bunch of biscuits for $3 each, you will need to sell a lot of that biscuits to get to a million dollars in revenue, exactly 333,333 biscuits, I don’t know about you but that sounds like a lot of biscuits to me!
However, if you sell a complicated machine for $100K, then you only need to sell 10 machines to reach to million dollars in revenue. That’s more manageable!
2. Start a Business that is Easier to Scale and Leave You More Profit.
If you sell a complicated machine for $100K, then it probably costs around $70K to produce that machine.
That will leave you with a $30K in pre-tax profit, so you have to sell around 34 machines to reach a million dollars in pre-tax profit.
To sell that number of machines, you will need a team of sales representatives, and with that price point, you probably can reach a limited amount of clients within your market.
If you start an information business, such as media design, consultancy, or digital marketing agency, you are trading a piece of advice or a service for money.
Keeping the first point in mind, you only choose to serve big clients with big offers, meaning that you serve businesses or wealthy individuals, with a minimum package of $25K.
What is interesting about this type of business is that you can choose to outsource your work to different places around the globe and get the job done at a much lower rate than your current location.
Of course, you need to hire a manager to maintain the quality of your solution.
Despite that, it costs much less to produce that service than to make a complicated machine.
So if we assume it costs you $5000 to deliver a package to your client, you will still make $20,000 in pre-tax profit, and you only have to sell 50 packages to make a million dollars in pre-tax profit.
Although with the second business you have to generate more sales however here is the trick.
It’s not only less risky to run the second business for the reason you have no inventories to worry about or staff to pay a fixed salary for.
With this type of business, you can hire a freelancer and pay them per project. It’s also easier to scale than selling a complicated machine.
Think about it like this: with the first business, you sell a machine for $100K, so on average, how often do you think a single customer will buy that sort of machine? Maybe once in every ten years.
What is your opportunity to cross-sell or up-sell your client to different machines? Probably two out of ten.
How can you earn more money? Well, you need to look for new clients, constantly join trade shows across the globe, and hire sales representatives or distributors with heavy commissions, and that’s costly.
It’s extremely difficult to scale a small business with costly production and overhead expenses.
With your information business, you can reach more clients everywhere online. You also can easily adjust your offers and upgrade your clients’ packages, up-sell, and cross-sell them to different services.
Simply, it’s much easier to go big!
3. Have a Fat Marketing Budget
Marketing is the fastest vehicle that will get you to a million dollars, assuming that you have the right product with a great customer experience.
Marketing comes in two methods, paid and organic.
Paid marketing is also called direct response marketing, such as Facebook and search engine pay-per-click advertising.
It can get you in front of your clients immediately, and if you have the right product with the right offer, you can make a lot of sales.
Organic marketing, such as blogging or social media content, takes an extended period, and it doesn’t generate results for many industries.
Many businesses don’t have enough time to rely on organic marketing to survive, never mind reaching a million dollars.
Some businesses can make it to million bucks without a fat marketing budget, but that requires a massive effort of social marketing around your brand.
Your marketing budget should be around 25% to 50% of your annual revenue depending on your industry, product price point, and whether you sell to retail customers (b2c) or sell to other businesses (b2b).
This means that to reach a million dollars in sales, your budget should be around $300K for marketing and advertising.
That’s a lot! I know, but it is what it’s.
Your marketing budget should be a major part of your business plan.
Believe it or not, most small businesses don’t budget a single dollar for marketing and expect to make a million dollars in a single year out of thin air. Wishful thinking!
You realize that the first and second points of this article make sense.
You need to sell premium products so you can earn bigger margins, and you want to choose a business that is easily scalable so you can earn more out of your marketing effort, which gets us to point four.
4. Build Profitable Marketing Systems
To get the best out of your marketing investment and effort, squeeze every penny that belongs to you out of every paying customer.
This means that you will have to build marketing systems that make you money all the time.
With offline businesses, things get a little complicated, but online is where things get interesting.
With some fancy and automated tools, you can easily up-sell and cross-sell products, build automated email campaigns to promote new products, and design a referral system for your loyal customers to bring you more sales.
To make more money, you don’t have to sell to more customers, but you have to figure out a marketing system that sells more products to a single customer.
Selling online without a doubt is the best and most efficient way that helps you achieve those results in a shorter period compared to many other small business projects.
Making a million dollars in business is a dream for many small business entrepreneurs.
Most of them will never reach it for the reason is that they don’t have a solid understanding of what it takes to build a multi-million dollar business.
Remember that to reach a million dollars as fast as you will have to serve a premium customer, your product should be scalable, have a fat marketing budget, and have marketing systems that generate more money out from an existing customer.
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