A mentor of mine once told me that a business that makes $100,000 in a year is different from a business that makes $500,000 in a year, a business that makes $500,000 a year is different from a business that makes $1 million a year, and so on. He also told me that the person who is successful at managing a company at one level often is not successful at managing it at another level. I’ve made it my mission as an entrepreneur to understand how to successfully transition from one level to another, but I’m still learning. Some of my education comes from my own experience, but as has been said “Experience is a painful teacher, and fools can’t learn any other way.” To avoid pain, I do my best to learn from others. Here are what a few successful entrepreneurs have to say about making transitioning past $1 million in revenue, and how to keep on growing.
Before $1 million, your biggest risk was starvation, but now your biggest risk is drowning in opportunities. Say no to all these new-found distractions that dilute your efforts. Stay focused and simple.
-- Derek Sivers, author, TED speaker, and Founder, CD Baby, @sivers
Never let your quarterly sales goals blur or alter the long term plan you have established. It can't just be about growing your company for the sake of growth. Grow smart with a purpose.
--Joshy D., REBEL8, @joshyrebel8
There will always be a million things to do, but identify and prioritise the ones that will achieve the most impact and do only them.
--Chinmay Malaviya, Managing Director of foodpanda Singapore foodpanda Hong Kong.
Pay close attention to building and scaling your leadership team. Now that you are greater than $1 million in revenue, it's likely you don't have an exec team that knows how to go from $1 million to $10 million in revenue.
--Brad Feld, Foundry Group, @bfeld
Keep your head down and keep executing. Stay focused on nailing the customer pain as precisely, profitably and perfectly as possible.
--Jeff Burningham, Founder, Peak Ventures, @jeffburningham
Congrats, you've just hit $1 million. Immediately check profitability/margin--hitting $1 million in sales can still be a loss on margin. Don't focus so much on the top line that you aren't checking to see if margins are still healthy. Without healthy margin you could be running a Million Dollar failure.
--Wil Reynolds, Founder, SEER Interactive, @wilreynolds
Is this a lifestyle business that you want to slowly grow to $2 million, or is this a rocketship you want to take to $100 million? A lot of decisions are different based on how you answer this. There is no wrong answer, but the path and decision tree look quite different.
Are you the right CEO to take the company to the next level? Often times founders are the best to lead the company now and forever, but sometimes founders realize they only like the small company stage. Be honest with yourself.
If you are outsourcing your bookkeeping or don’t have an experienced CFO, it's time to change that. $1 million+ is a decent amount of cash to track and account for.
Will you need more office space? How many employees will you have when you hit $2 million, $5 million and so forth? Usually getting to the first million takes longer than getting to the second million.
Will you need outside capital to continue to grow? Fundraising is a 6+ month process.
Do you have a board of director or an advisory board? Experienced outsiders that have taken a business where you want to go can provide great insight. Choose wisely and be careful about when/if/how you compensate them.
Do you have the right talent? Maybe you started with family and friends and now that the business has gotten larger they might not be the right ones for the jobs they are in as the company scales.
--Alex Lawrence, Vice Provost at Weber State University, retired entrepreneur, @_alexlawrence
Put your foot on the gas, or as we Tesla customers say, "crank up the current."
--Tim Draper, Draper Fisher Jurvetson, @timdraper
The psychological barrier of getting to $1 million in revenue is quickly elapsed by the reality that just as much innovation is required to get to $10 million as it was to get to $1 million. For some entrepreneurs it means repeating the business model and scaling as quickly as possible. For others it means leveraging the existing business to find something new that can propel fresh growth at bigger scale.
--Derek Andersen, Founder and CEO of Startup Grind, @derekjandersen
As the owner, the bigger you get, the more you have to spend more time managing and less time selling. Therefore your daily tasks take on a whole new meaning. Then you have to start hiring more individuals to either do the managing, or to do the selling. So you have to keep in mind what made you successful, and not stop doing those things.
--Jack Stapley, Founding Partner, Farnsworth Wholesale Co.
More revenues can bring more waste. Be willing to spend money on the actions that will give you the best return. Avoid spending needlessly at all cost.
--John Benson, Founding Partner, PinAlerts
Be kind to those who surround you on the journey and give liberally to those in your personal network. You have enough experience to be critically valuable to other entrepreneurs and you are novice enough to need more help as you progress. Karma is real.
--Greg Warnock, Managing Director, Mercato Partners, @gregwarnock
Have you run a business that grew from less than $1 million per year in revenue to greater than $1 million per year in revenue? What do you wish you would have known before you crossed that line? What advice would you give to someone crossing that line for the first time? Let us know in the comments area.
Joshua Steimle is a Hong Kong based entrepreneur.
