Unpopular Opinion: You Don't Have To Build a 7 Figure Business
There is a lot of noise out there about what a digital entrepreneur looks like. Working from exotic locations. Wearing high heels all the time and having your feet not hurt. Working 4 hours a day (or a week!). $20K months in the first six months of business.
Sorry but I’m calling BS on all that.
And regardless of whether or not you buy into any of these claims, there’s another message that’s wrapped up in all these broadcasts. The one that suggests that the only route to success is to hustle as hard as you can to get to the two comma club and then keep growing from there.
Um, I’m here to emphatically say no it’s not and no you don’t.
As someone who’s built a million+ business and someone who’s built a $500K business, the $500K business is so much easier. This is why I keep talking about why it’s so important to have a good handle on where you’re going. Because if you know you’re trying to build a $500K business, your steps to success are different than if you go into it thinking you need to build a $5MM business.
You don’t have to believe me, but let me offer a few examples that might help you reframe this thinking.
1. Business is a long game
If you go into this game thinking you aren’t winning until you’re making millions, you’re setting yourself up for burnout. And even if you hustle hard and do it, what will you miss out along the way? As I always tell my kids, why not set yourself up for success? If it’s early days in your business your goal should be to cover your business expenses. The next goal should be to pay yourself enough (we can talk about enough-ness in another post). THEN you can make the decision about the time/money tradeoff of getting to 7 figures and beyond. Because if you want to increase the revenue in your business to that level with a profit that makes it worth it, it WILL take you more time and it WILL be more stressful.
2. Revenue Does Not Equal Income
Business design is everything people. The noise talks a lot about making “millions” but it rarely talks about whether that’s money coming in the top of the business or the money left over that you get to keep. Usually they’re talking about top line revenues. But let’s look at two examples:
Business 1:
$1,000,000 in revenue. $950,000 in expenses. $50,000 in profit. (For a lot of the noisy businesses, most of their money goes to ad spend – that’s how they get so noisy.)
Business 2:
$450,000 in revenue. $270,000 in expenses. $180,000 in profit.
Which business would you rather be in?
3. Business Deisgn is Everything (Part Duex)
There is an amount of time it takes to deliver your product or service to your customers. Getting to $1MM in revenue generally requires a few different revenue streams and/or serving more than one target segment. For every product that you add and every segment that you serve, the time requirement on your side increases because the number of moving parts in your business increases. This is why you end up hiring people which brings me to my next point.
4. You Can't Get to $1MM+ Without a Team
There. I said it. So go ahead and send me your stories about all the examples where I’m wrong. I’m actually very curious.
But when I look across all the entrepreneurs I’ve worked with in the last 20 years, I think $750K is about the max from a solo operation even if you are in the digital services space.
The reality is you can’t wear all the hats in a business that does $750K-$1MM. You’ll need some help and when employees come in, there is a lot of additional time and mindshare required even if they are bringing in more than they cost. However, it’s not that hard to get to $350K or $400K either by yourself or with some part-time or contractor support.
So What Does All This Mean?
It means start small. If you’re trying to grow a business using your own money (vs. trying to convince other people to invest), you don’t have to start with a plan to get you to $1MM.
Instead, start with a plan to get you to cover your business expenses + paying yourself enough to live on. Make every decision you make about how to do that. Then, if you want to pay yourself more, make a new plan and adjust your business accordingly.
If you’d like to collaborate on your ideas for building a solo business that pays you “enough”, and what decisions you need to make to get there, you might be interested in early access to my Flexible Feedback program. Email me at laura [at] laurazavelson [dot] com or book a 15 minute call and we’ll make a plan.
