MBA2439 How To Make a Million Dollars in Revenue in Your Business

0:09Heyo! Welcome to the$100 MBA show. No fluff, just the good stuff with our practical business lessons. I'm your host, your coach, your teacher, Omar Zinhome. And in today's episode, you will learn how to make a million dollars in revenue in your business. A million dollars seems to be like the golden number that every business wants to make in a year. So when I say a million dollars in revenue, I'm referring to each year. I always found that very interesting and actually quite funny because it's quite arbitrary. Like why a million dollars? Why not two million dollars? Why not 500 ,000? But for many people, that's their goal.

0:45They want to make a million dollars in revenue. So in today's lesson, I want to break down how I would advise you to go about doing that, how to make a million dollars a year in revenue in your business. And what are some of the milestones along the way so that you can feel like you are making progress? You know that you're on track. I get it. If you are generating a million dollars in revenue each year, it means your business is offering something people want. People are willing to pay for what you got and your business has potential. But saying you want a million dollars in revenue and getting there are two different things.

1:16Let's get there. Let me show you how. Let's get into it. Let's get down to business. So for the sake of today's episode, we're going to just focus on revenue. Remember, I said that profitability is really what matters, how much money you take home or you make after all your expenses. But let's just focus on revenue right now and talk about what it takes to get to that million dollar mark. The first thing is your actual product or service has to be as good as possible. It has to be as flawless as possible. Why? Because a flawed product or service is a leaky bucket. It's very hard to get traction.

1:48It's very hard to ramp up to a million dollars in revenue when you're losing customers and losing money every single day. For example, let's say you build a software business or software product, and people love the idea of the product, they think it's interesting, and you get 100 new signups every single month. But every month, 60 or 70 people churn, meaning they leave. So you don't actually have 100 signups. You have about 30 or 40. This really slows down your growth. And those customers that stay, those 30 or 40 customers, they might churn next month. So you could be losing all the money that you're spending to get these customers that stay for as little as a month or two.

2:28Churn is often associated with reoccurring businesses like SaaS, reoccurring billing, products like Netflix or insurance, for example. But it also is a reality for other businesses. If I sell shampoo, for example, on my online store and my customers stop buying my shampoo, they buy somebody else's shampoo, they churned. I'm not making money off that customer anymore. Any money I spent to get that customer is now kind of wasted. Yes, they probably paid me for my product for a few months. But the point here is that you want to make sure your customer acquisition lasts as long as possible because you want your customers to stay as long as possible.

3:03So you don't want a leaky bucket. That means your product, your service, your whatever you do is incredible. Even if you have physical products like shirts, furniture, whatever it might be, returns. This is also a form of a leaky bucket when people don't like your product and ask for a return, a refund. It costs you money to ship this thing to people and to put it on your website and to sell and all that kind of stuff. And that kind of gets wasted when a return happens. I know this because I've had e-commerce stores before and it's a pain in the butt. So make sure your product or service is as airtight as possible, as good as possible.

3:39Your product really is going to drive things home because when your product is great, people tell other people. You get word about marketing and this helps the momentum of your sales. It also allows you to minimize again churn and minimize your refunds and keep more of the money that you make, making that money compound over time and allowing it to be easier for you to get to that million dollar mark. So now the second thing I need to recommend to you if you want to hit a million dollars goes hand in hand with this idea of a solid product that's not a leaky bucket, and that is marketing. A lot of people have a hard time balancing these two, marketing their business, getting new customers, selling their products or services while improving and perfecting their product.

4:23A lot of people wait. They say, I gotta make my product as perfect as possible, then I'll market. That's not how business works, and you will go out of business if this happens very quickly. So you need to constantly be marketing. I've said this before, but your business will not survive. It will not grow if you're not actively marketing your products and services. Don't rely on just word of mouth and your great product. That is not enough. You have to actively market. While you're marketing, of course, you're going to work on improving that leaky bucket, plugging up some holes, improving it. But to get to my second point, you have to have a marketing system.

4:55A marketing system is not you just posting on social randomly when you feel like it. A marketing system is not running an ad or two when you have the budget. Marketing system's not, hey, I'm going to work on SEO this month and then forget about it for the rest of the year. A marketing system is a strategy. It's like, hey, these are the areas my business can grow. This is how I can attract new customers. These are where I can find my customers. And I'm going to be strategic and be consistent with that strategy. So you might be selling an online course and your strategy to market is to post regularly on Instagram.

5:27Every time you post on Instagram, you have a call to action to check out the link in bio to get on your email list. when they get on your email list, you then promote your products and services via great content in your email newsletters, and then make offers to your customers, maybe via a webinar or a sales offer. That's a strategy to market, right? A full-fledged strategy and all the details you can fill in later. But the point here is that it's not, oh, I use social media. No, what do you do with social media? What do you say on social media? How often do you publish? Where does it lead to?

5:58By doing this, it allows you to be focused. You understand that, hey, the whole reason why I'm posting on social media is to get them on my email list. Because if I get them on my email list, I can then promote to them. I can then market to them. I can then tell my products and services and nurture my audience. So if I'm not telling people to join my newsletter on social media to learn more or giving them some sort of content upgrades or whatever it might be, then I'm not doing social media right. I'm messing around. So have a strategy that's consistent and monitor. Track the data so that you can be able to say, I can improve this, do that, my open rates, my conversion rates, whatever it might be.

6:33With online business, marketing is so important because you need to have brand awareness. People need to know you exist. Otherwise, you're in the sea of the internet. No one's gonna see you. So having a strategy and being consistent with that strategy is incredibly important to bump up that revenue number. Speaking of number, the numbers. That's the third piece of advice I have for you. The numbers have to work. What does that mean? Well, there's some critical numbers you need to know about your customers. Average revenue per customer on a monthly basis or even on an annual basis is very important if you wanna hit that million dollar mark.

7:08You need to know how much money you make from each customer every single month or year. Let's say, for example, you have a community online, it's a group coaching program, and you charge$500 a month for it. Let's say that's what you do. That means you make$500 a month from each customer. Now, how many months does each person stay on average? So if you look at your data and say, on average, people say six months. So that means you're making$3 ,000 from each customer each year. That means you need around 333 customers each year to hit a million dollars in revenue. Because 333 times 3 ,000 is a million dollars, roughly.

7:49Is this possible for you to bring in that many customers into your coaching? Can you even service that many customers? Can you handle that many people in your group? Do you have the team for that? Do you have the resources for that? If you don't, then you have two options. One, change your situation, meaning improve your business, your resources. You're going to spend more money on that, which is going to kill your profitability or increase your prices. You got to increase the prices so that you make more per customer. The math doesn't work. You're just never going to hit the number. That's just how it is.

8:21Another way to look at it on a monthly basis is in order for you to hit a million dollars in revenue, it's about$84 ,000 a month. It's a little bit less than that, but I'm just rounding up to make things a little simpler. So that's a lot of money to bring in every single month, $84 ,000 in revenue. It's not impossible, but it puts things in perspective. So this is not to intimidate you. This is so that you have the numbers in front of you and you can say with my business, I need to charge this much and I have to bring this many customers in order for me to make this much money at the end of the year.

8:52If I'm being totally honest, this point is the most important point that I've made today. But I didn't start with it because a lot of people get intimidated by numbers and I wanted to be a little bit more encouraging. But this is the truth. The numbers have to work. I know this because I ran a SaaS business, a software business for over nine and a half years with Webinar Ninja. And we played with pricing. We changed things around. We did bundles. We did annual plans. We did a whole bunch of stuff so that we can get the numbers right. So then we can hit our targets for revenue each year. This is something simple you can put together in a spreadsheet and do some predictions, do some projections, I should say, on your revenue.

9:32What else you got to do to hit a million dollars? Well, you got to be profitable because if you're losing money, you won't stay alive for long. A lot of people just spend and spend and spend on marketing, on ads, and forget that, hey, they got to pay all these bills. So make sure your revenue, wherever it's at, is more than what you're spending to run your business as well as to pay yourself. What else? Well, you got to have a good reputation. Got to be somebody of integrity, somebody of your word. Meaning even if things go wrong, if you don't deliver for your customers, if things kind of go pear-shaped, if you're upfront about it, if you say, hey, I'm going to solve this, I'm going to rectify this problem, people will respect you.

10:11But if you just hide behind your computer and you don't get in front of it, people will start losing trust. Okay. One of the things I noticed is when I started to get closer and closer to a million dollars in revenue is that the more people I met, the more people knew about my business. I would go to conferences, I'd go to meetups, I'd go to dinners, even people not in the business space, entrepreneurial space, I'd tell them about Webinar Ninja and they say, oh, I've heard of you guys. And it's because in order for you to get to that mark, many people have to have interacted with your brand, not necessarily bought your product or service.

10:43They could have just heard of you through your ads, through your marketing, through going to your website and shopping you around with your competitor. Maybe they chose somebody else. The point is that, as you know, not everybody that interacts with your business, your website is going to buy, but they are aware of you. And when they're in this mode, they're going to be asking around. They're going to be Googling. They're going to look up reviews. They're going to look up people's testimonials, case studies. They're going to do their homework. They're going to ask their friends or family. They're going to ask their mastermind.

11:10They're going to ask their coaching group. And over the years, when you build a strong reputation of integrity and people really trust what you do, it gets around and you get to use that as leverage to grow your business. People start to hear about you in a positive light, word gets around and that earns you business without you even doing anything because of the past decisions you made, the past ways you showed up for customers. So keep that in mind, even if you're not close to the million dollar mark, because this starts from day one. It's easy to build a business with$100 ,000 in revenue, 200, 300, because you can even have a local business like that.

11:46People outside the local area won't even know about you, won't even care, won't even hear about you. But once you get to the million dollar mark, you're really starting to really ramp up your name and your integrity will be out there. The last tip I'm going to give you when it comes to growing your business to a million dollars in revenue a year is something I learned very early on, is that in business, just like in life, you're either growing or you're dying. There's no stasis. There's no staying the same. So if you're not on the offense, if you're not improving, if you're not getting better with your product or service or whatever, and you're not getting better as a person, as a leader that's running this team and running this business, then you're getting worse.

12:25That's just how it is. So you got to be actively getting better, actively improving, actively leveling up your game. If that sounds like a lot of hard work and a lot of hours and a lot of stress, then you're right. That is exactly what it is. Okay. I'm not going to sugarcoat for you. Getting to a million dollars in revenue is hard work. But if you talk to people that have hit that milestone and went beyond, they'll tell you a funny thing happens. Once you pass a million, two million, three million, it's almost like the business has its own powers, its own legs, and it starts pushing itself. It doesn't mean you don't stop improving, but the amount of effort you need to push that boulder becomes less and less.

13:05Thanks so much for listening to The$100 MBA Show. I hope today's episode helped. If you found it informative, if you found it helpful in any way, the best way to show your love is to follow or subscribe to the show. Go ahead and do that right now on Spotify, Apple Podcasts, or whatever app you're using right now to listen to the podcast. By doing so, you give our show a bump and allows us to grow and build a better podcast for you. I will continue to work hard for you and get these episodes out to help you grow your business and grow yourself as an entrepreneur. Your job, hit that subscribe button, hit that follow button so we can do this together.

13:40Thanks so much in advance for doing that. Before I go, I want to leave you with this. Word of caution, the bigger your business gets, the more money you're bringing in, The more complicated it gets, the more people you have to hire, the more systems you have to have, the more things you need to worry, the more tools you need to use, the more money you need to spend. So just be mindful of that. The amount of pieces to the puzzle to make a business like Apple work, you know, a trillion dollar business is far greater than, you know, the pizza shop around the corner. So with great reward, million dollars in revenue, comes great responsibility and logistics and things to worry about and things to take care of.

14:16make sure you have systems in place and you're ready for it. Thanks for listening. And I'll check you in the next episode. I'll see you then. Take care.