Ryan Daniel Moran explains why product businesses plateau at $1M, $3–5M, and $10M, and how to break through. Focus on multiplier activities like product creation and paid ads, hire someone to handle fulfillment, and build a three-person core team. Investors want clean financials, unique products, and proof you can reach customers.
Hey everybody, I'm Ryan Daniel Moran and I'm making this video for entrepreneurs who are building businesses, as you know, one or two person shows. So small businesses that are building their business on the Internet. And I'm making this video because I want to give you a little bit of a shift that I think could help you grow faster and break through some of the bottlenecks that a lot of entrepreneurs usually hit at like that million dollar level. So I am putting together.
For physical product sellers specifically. And what that exists to do is give entrepreneurs who are at least that million dollar level, give them the capital and the advice and the board of advisors and the network to be able to grow really, really quickly and then sell one day for more money than they ever could have gotten on their own. And what I've seen is that a lot of businesses will plateau right at about a million dollars or so, right at that million dollar reven.
They don't have a team or they don't have enough capital to break through that level. And then the second plateau seems to be about 3 to 5 million dollars. So what I'm hoping to give you out in this video is a couple ways that you could structure your business to where it would be attractive to an investor like myself or to outside capital to help you grow. Number one, right when you hit about a million dollars, a lot of entrepreneurs stop focusing on what I would call multiplier activities. And a mult activity is something that can grow the company by 5 or 10x. And instead what I see them doing is they're starting to focus on the grind work, the grunt work that they're stuck in. So my recommendation is to look at. There's really two things that I look at that are really multiplier activities. Number one is product creation, releasing as many products as possible. And the second is either building audiences, partnering with audiences audiences, or cold advertising. So it's really getting in front of new eyeballs. So for example, I work with a lot of physical product sellers that get their start on Kickstarter or they got their start on Amazon and they hit a plateau because they stop releasing new products because they're busy fulfilling the one that they've already got or they stop going out to new audiences, new eyeballs. So they're not running Facebook ads, they're not partnering with influencers. And those are the areas that are really going to give you that exponential growth. But since they're new, it's hard to put focus there. So if you take money outside money and you hire an Employee who can automate that grunt work so that you can spearhead those new opportunities. That's often a really, really good use of your time and of your capital. Number two, I want to go into what that team looks like. Who should you be building? Who should you be bringing onto your team in order to be able to scale to, you know, at eight figures or beyond? Number one, I would recommend that you have somebody in charge of fulfillment. Somebody who is always making sure that you've got inventory and you are developing new products. So having that person in place where they can take your ideas and develop them and bring them to market, that to me is one of the first hires you should be making. The second is a marketing person, somebody who is opening up new advertising opportunities, someone who is promoting launches, somebody who's getting reviews, somebody who's in charge of ensuring that you are growing.
The product promotions that you have. And number three would be a really rock star customer service person. Somebody whose job it is to be all in on the customer experience, making sure that they're not just happy, but they're absolutely delighted. And that's the really the three person team that I would suggest you start with. Let me see if I can squeeze out one more tip for you while we pull up to my new lake house here. Number three, whether you exist, whether you intend to sell or not, build your business as though you are preparing to sell. And that means building audiences, it means having clean financials, it means doubling down on your customer experience, it means developing products that.
Have unique spins in the marketplace, because those are all of the things that a potential acquirer is going to look for. They're going to look for. Do you have a unique spin in the marketplace? Do you have a strategic advantage? Do you have a clear brand differential differentiator that sets you apart from everybody else? Do you have the ability to get in front of new audiences? Because if not, then you're just a me too brand that is competing on price. And I like brands that have high profit margins because you have a clear differentiating factor and that can attract a clear audience. And that's who I'm looking to invest in. So when I'm looking to buy into a company, I'm looking at, is there a clear difference between this brand and all of its competitors? I'm looking at, is there a clear audience for this? And is the brand at least experimenting by getting in front of those new audiences? If they're just looking at I'm selling spatulas and they're selling spatulas that's not really exciting business to invest in, regardless of what the financials are. But most importantly, I'm looking at the entrepreneur. I'm looking at, is it a hungry entrepreneur? I'm looking at, is this entrepreneur motivated to take this beyond something that's just going to make them money? Are they looking at developing a real brand? Are they looking at something that can grow bigger than just them? Or are they looking at this as like a money making opportunity that's you're just trying to pull out as much cash as possible? If you've got a physical products brand that you want to take to that level and you're noticing that there's certain bottlenecks where you are either at that million dollar level or that $5 million level. And really at that, that $10 million level is where the third plateau hits. I do have an investment fund that looks for new opportunities. We bring them into our masterminds. We get to know, sometimes we look at specific deals. And so those are the types of businesses that I as an investor look for. And whether you work with me or us or somebody else, those are the things that are ultimately going to take you from 1 million to 5 million to 10 million and beyond. So I hope you found this valuable. If you know a physical products entrepreneur or really any entrepreneur who you'd find, think would find value out of this, feel free to share this video with them. Thanks for watching, Sam.
