Becoming a millionaire from scratch is not the easiest thing to do, but it is more than possible if you plan to make it happen. Starting and building a successful business is one of the most common ways to become a millionaire. What many entrepreneurs fail to realize is that the millions are usually made from the planning stage. In other words, becoming a millionaire through your business is never an accident, it has to be planned. The 7 strategies listed here have the potential to help you accomplish that million-dollar goal. Incorporating these strategies into your business plan can be the difference between being one of the hundreds of thousands of companies that never even crack more than fifty grand per year and those that go on to be worth millions. As you review the strategies below, think of ways you can incorporate them into your business from the beginning or from whatever stage your business is in at the moment. Some of them are much easier to incorporate than others, but each of them can give you the leverage you need to reach your goals. Now, let’s get to those millions!
Valuation to resell
Your business is more than an entity to make monthly and yearly revenue. It is an asset that has true monetary value. Just like a home that is purchased and expected to grow in value, so your business has the ability to grow in its worth and could be potentially worth great financial value. This is why it is an important strategy to prepare your business to be sold from the very beginning, if possible. The reason for this is that preparing your company to be sold forces you to develop repeatable processes for the business operation, document your financial progress with care, and place meaningful contingency plans into place. It helps you to be much better at operational management, which is vital if you want to grow your business from scratch to reach the million-dollar status. To plan your business for a resale, first start with your goal in mind. If you would like to sell your business for over a million dollars after five years, don’t hesitate to aim for this goal. Thousands of businesses earn millions of dollars selling their companies every year.
Key Performance Indicators (KPIs)
Not measuring the effectiveness of your performance in your business could be costing you time and money. KPI stands for Key Performance Indicators. It refers to a list of important metrics that help you identify how well your business is measuring up to your goals. Keeping track of key areas of your performance may not sound like big deal but it truly can be the difference between dreaming about being a millionaire and becoming one. Not knowing exactly how well you’re doing on a regular basis makes it very difficult to improve and scale your performance, which means you will stay in the dark about what areas of improvement are needed to optimize the impact of your day-to-day activities. This lack of awareness stunts the growth of your business and forces you to spend time majoring on minor things instead of using your time and energy to master the parts of your business that drive growth.
Traits of good KPIs are:
- They drive the results of your business
- they’re simple and easy to understand
- they’re specific and measurable
- they’re tracked on a regular basis
Of each of these traits Driving Results is the one many small businesses struggle the most with. It’s important to ask yourself if the activities you spend most of your time on each day are driving your most desired business results. If you’re like most small businesses, probably not. Typically business owners spend 80% of their efforts on items that drive 20% or less of their desired results.
For example, if you run a resume writing service and your biggest goal is to go from making 30,000 a year to 30,000 per month, you might need to focus more on KPIs that are connected to activities that help you get more sales such as the number of lead contacts per week. You also might want to focus on metrics dealing with time, such as time it takes to complete each resume, so you can increase the amount of resumes you complete per week. On the other hand, you would not be focusing most of your activities like coming up with larger varieties of resume template designs since although it might be useful, it’s not a key activity that will help you multiply your earnings. Remember the point of Key Performance Indicators is to identify and apply indicators that show you the performance of your company in areas that are ‘Key’ to helping you reach your goals. Use them well to 2X, 5X, or evening 10X your business.
Strategic Business Acquisitions
One powerful planning strategy you can use to increase the value of your business to over a million dollars in five years is business acquisition in your market. In other words, increase your market domination and market share by acquiring competitors or companies that are within your industry space. This strategy might require funding but it is definitely an advanced strategy that could get you to your millionaire goals sooner rather than later. It is important to be strategic about the businesses you seek to acquire. Your goal is to increase your market share in the industry you are already doing business within. Your goal is not to purchase and run an entirely new business. If you find a business that is worth 50% – 100% of your own business or more every two years, after five years your business could be worth over three times what it is today. This kind of progress in your business growth will cause you to reach your job much quicker. After all, acquiring established companies within the same field allows your business to grow without you having to do all of the hard work to make the business highly functional. This gives you the ability to remain focused on growing your company even further. It’s a good idea to use the expertise of a business acquisition consultant if possible, but there are several key categories of information you need to answer in order to make a good business acquisition. These questions include (but are not limited to):
- What is the reason the business is being sold?
- How well has the operational and financial data been documented?
- Are there vital employees in the business?
- What common problems are concerns for the business?
- Is the owner willing to assist in the transition to ensure it goes smooth?
- What are the most important skills to excel at running this business?
Once you tackle these major issues, you should be able to hit the ground running with your new company but it may take some time to integrate the new business seamlessly with your main business. Sometimes this integration process could take over a year but it is worth being patient since this strategy might just be exponentially increasing the worth of your business overall.
Most businesses don’t proactively think of the benefits of upselling. It is not surprising then that most businesses ignore this strategy when creating their business plan. This could be a huge mistake because it could mean you are leaving huge amounts of revenue on the table. When most new business owners think of upselling, they usually see it as a side strategy that doesn’t deserve much attention. They figure focusing on their main product or service is most important and they only consider upselling as a contingency strategy to strengthen their main sales. However, many successful companies come to discover their upselling is a main part of their business, not a marginal side thing they can afford to ignore. 1-800 Flowers is a prime example. The company has earnings of 1.23 Billion per year. Around 55% of that revenue comes from selling flowers. Can you guess where the remaining 45% of that revenue comes from? You guessed it…upsells. That’s right, close to half of this flower company’s revenue comes from non-flower items. That means if they thought like so many other entrepreneurs that upsells are not that big of a deal, they would be missing out on about a half of a billion dollars in yearly revenue.
Preselling helps your business earn more profit by getting paid commitments for your products before you are even in production. This greatly reduces the chances of overproduction, decreases profit, and increases chances for success. This strategy is still not as widespread as strategies like drop shipping, but it is beginning to gain steam. Planning to pre-sell your products consists of selling goods in advance, then using those pre-sold orders to not only pay for fulfilling those orders but also (as long as your margins are great enough) fund your business startup or expansion. To do this you simply need a good idea for a product that you validate with trend research. Once you have a product idea, you can either get a supplier to make a prototype of the item or you can simply get a 3D artist to create a realistic 3D image of the item. With this image you can create a landing page that displays the product features and offers the product and at a 20% – 30% for a limited time to create a sense of urgency. This strategy allows you to accelerate your growth toward millionaire status because you could fund your business with pre orders over and over again, and you can also greatly lower your risks because preorders tell you how enthusiastic your market is for your products. Think about it, would you rather have a survey with a thousand respondents saying they are interested in a particular product, or would you rather have your account flooded with a thousand pre-orders in a matter of weeks? The advantage that you will have over your competitors who often get stuck with unsold inventory at the beginning of their business cannot be overstated. This strategy can also be used with digital and print-on-demand products if designed properly. Planning the presell strategy in your business can lead you to greater predictability as well as greater profits that will lead you closer to your million-dollar dreams.
Crowdfunding as an industry has become a huge success. In fact it is expected to grow from the 100 Billion-Dollar industry it is today to over $224 billion within only five years. Billions of dollars fund campaigns in a large variety of categories including arts & crafts, film, music, health and fitness, human rights, environment and many more. With such a large variety of causes and projects it can be easy to lose sight of the great business-funding potential of crowdfunding. Don’t make the mistake of dismissing a crowdfunding strategy for your business as light-weight. It can be one of the most inexpensive ways to launch or expand your business, and with careful planning could mean huge success. When launching a new product or service, crowdfunding platforms like Kickstarter.com and Indiego.com can also give you a great chance to achieve your first round of enthusiastic followers that you can continue to engage with throughout the starting phase of your business and beyond. How much funding can you get to launch or expand your business? That obviously depends on the product, demand, and effectiveness of your crowdfunding sales page. However, if you need a bit of inspiration consider the crowdfunding success of a new company called Durapik. The company offers environment-friendly dental pics and achieved close to a half-million dollars in their first month of business using the crowdsourcing platform indiego.com.
The truth is that it takes careful planning to achieve crowdfunding success, especially for a new business. A few keys to a successful crowdfunding launch include:
- Be unique. Crowdfunders like to back projects that stand out in some special way.
- Be aware of your audience. 24-35 year olds are the most likely of all age groups to participate in crowdfunding campaigns (Fundera, 2020).
- Make a compelling offer that backers will value.
- Use video since campaigns with video raise 105% more than those without video (Fundera, 2020).
Crowdfunding could very well be the difference between getting a head start and extra push towards your millionaire business goals and a business that grows at a mediocre pace. Used wisey, this strategy could be utilized to propel your business forward repeatedly.
One of the most overlooked strategies new businesses fail to plan is scaling their business. A smart scaling strategy is a powerful way successful companies achieve accelerated growth compared to none-scaling companies. In fact in today’s business world if you don’t have a scaling strategy, you’re probably in danger of being outpaced by your competition. It’s important to make a key distinction between scaling and growing a business. Growing a business is the process of increasing effort and resources in order to achieve increased results. On the other hand scaling is the process of achieving increased results with little to no increased efforts and resources. For example, if you have sold 100 hand bags using a $1500 marketing campaign of Facebook ads, you may find that you can sell 200 bags by adding another $700 to your campaign to reach more customers. With this example, you didn’t hire any more staff or apply more effort, you simply added to your marketing budget. Theoretically, you could grow your business fairly quickly using scaling tactics like this because you are getting a great deal of return with minimum effort.
When planned properly and put into action the seven strategies in this post will give you the greatest chance of achieving million-dollar status in your business. Although all of these ideas will not be an equal fit for all companies, integrating at least some of them will give you a great boost in the performance of your business. It doesn’t happen overnight, but incorporating these strategies into your business plan could set you up for the long run to go from zero to millionaire within 5 years. Keep in mind that a business plan is not a document that’s set in stone. It evolves as your business grows. It may be easier to incorporate a few of these strategies early on in your business and carefully add others as your business grows. What is also great about these strategies is that you can continue to apply them to your businesses even after you reach your millionaire goals. Becoming a millionaire doesn’t happen by accident. If you apply the strategies listed here, you can plan becoming a millionaire in a relatively short period of time. Five years from now, you may look back and be grateful you started applying the strategies in this article. What’s most important is that you start today.
“Crowdfunding Statistics: Overview” Fundera, 2020.