Steal My 5-Year Plan To Build & Sell A $10M Business - Step by Step

If your goal is to build a $10 million business and sell it, this is the video that you will come back to and watch over and over again. Over a period of five years, I personally have helped hundreds of entrepreneurs go from nothing from scratch to $1 million. And that plan is just a 12 month plan. But getting to $10 million is an equally predictable plan, but it requires a different set of rules and it requires that you think about different things than just getting to 1 million. In this video, I'm going to share with you the timeline to get to $10 million over five years. And I'm going to share with you what you need to think about in every year from year one to year five. If you want to go to $10 million and have a ridiculously profitable exit, if you're starting from scratch, year one is all about going from zero to at least 500,000, preferably about a million dollars in revenue. This is what I wrote my book, 12 months to 1 million about. The entire process takes 12 months. And all you need to think about in that first year is getting a product and selling it. The first year simply requires that you have one customer in mind, that you have one target person that you want to help, and that person will buy four products from you over the course of 12 months. And the reason for that is because if you have four products that sell a consistent 25 sales per day, that's 100 sales a day. And at a $30 price point, that's $3,000 a day, 90,000amonth, or about $1.1 million in revenue. In order to get there within 12 months, your focus needs to be on who one person and one channel. At the beginning of the journey, entrepreneurs want to try a bunch of different things. They just want to see something happen. But the way that you get to a million is by going deep in one specific area. That means serving one specific person on one specific channel. That can be Amazon or Shopify, it can be retail or it can be a funnel. But it's very rare that I see entrepreneurs try to do multiple things, get good at Facebook ads and Amazon, and still be successful. The trap that entrepreneurs fall into in year one is Shiny Object Syndrome. They want to start another brand once they get to $500,000 a year because they think that that's as big as it's going to get, or they want to start another channel, or they want to release a whole new line of products or launch 10 products at once. Rather than focus on getting the first product to 25 sales a day so that they have the sales channel momentum to launch product number two and three and four. But if they can stay laser focused on just doing a few things, well, they get to a million dollars. I've seen it happen hundreds of times. Year two is when entrepreneurs often go from 1 million to $2 million. And year two is all about building a moat. That means solidifying the business that you have. You will have more market share and you'll have a more defensible business. And if you double down on what worked in year one and carry that over to year two, that often looks like getting reviews, getting repeat customers, and solidifying the channel that you're already using. If that's Amazon.com, that means putting more focus on your organic listings or optimizing your sales pages so that you're getting more conversions. If that's Facebook ads and funnels, it means optimizing your ads and your landing pages so that you can spend more money on getting new traffic traffic. Year two is about optimizing what is already working. And a lot of entrepreneurs want to start taking money off the table once they've reached a million dollar business. And that prevents them from getting to two or four million dollars. I'll share with you. My partner and I, when we were building our first business that we sold for eight figures, we did not pay ourselves until we were over a million dollars in revenue and we paid ourselves $60,000 a year until we sold the company. For a lot of entrepreneurs, they think that a million dollars in revenue is the end zone. That's where they finished. That's where they can take a six figure salary and never have to work again. That's okay if you want to stay at 1 or 2 million dollars, but if you want to grow to 5 or 10 million, we've got to feed the business as much as possible for as long as possible. So in that second year, it's about reinvesting into the channels that are already working. And that means spending more on advertising on the platform where you're taking sales. It means being really good to your customers so that they become repeat customers. And it means optimizing for things like reviews and conversions and click through rates and figuring out the numbers that are getting you to that $2 million run rate. Year two is also when we can start getting some of the things on off of your plate that are bogging you down in the details. This is when you might start outsourcing customer service or you might even partner with a sales channel manager that Specializes in Amazon or Facebook ads so that you're not doing all of that grunt work yourself. This is not the time to be building a big team. This is not the time to be running up expenses. But you might start outsourcing some of the tasks that keep you distracted from focusing on the primary sales channel where you're getting most of your customers. In some cases, when we're investing in a brand, we will help them find one operator that helps them oversee the business. So rather than bring on a whole big team, we might bring on one person and then a couple of agencies or outsourcers so that the founder can stay focused on what is bringing in sales for the business. Year three is where a lot of entrepreneurs get sick stuck, because what got them to one or two million dollars is not the thing that will take them to 10. And this is where the entrepreneur has to develop some new skills. Year three, once you're doing about $2 million in revenue, your focus widens from getting new customers to getting new leads. Once you're getting about $2 million from any one sales platform, whether that is Amazon or that is funnels or even retail, the way that you double again is by widening the focus and getting leads before they're ready to buy from you. When you're selling on Amazon.com, or even when you are running ads on Facebook, you're often getting the customers that are ready to buy from you. In that moment, they're already looking for the product that you're selling. But the way that you get to that mid seven figure point is you start getting them earlier in the search process. This means that we're building an audience of people that look like our ideal customers, but they're not ready to buy just yet. One of the best ways to do this is by running traffic to an email list and then building a follow up sequence for those leads and sending them to your primary sales channel. This is audience building and Marketing 101. You get leads and you sell things to those leads. You're no longer looking for people who are searching for your product. You're now looking for the person who will be searching for your product and you're telling them about your products so that they choose your brand instead of the competitors. The brands who break out are often the brands who get their ideal customer right at the beginning of their journey. So if the person that you're serving is on a weight loss journey, the best way to break out from that $2 or $3 million run rate is to start getting people who are early in their weight loss journey. They don't even know what products they need yet. If you start getting in front of them and you warm them up to the products that you have, and you send them over to the primary sales channel that you spent the last two years building, that is how you're going to break out from $2 million and go to 4. There's one more thing that becomes important when you're in year three, and that is ensuring that you've got enough financing to be able to order much larger inventory orders. Around year three is when entrepreneurs run into cash crunches. And this is what you don't expect when you first start your business. You think, if I'm running a $2 million business, I'm probably spitting off a bunch of cash. There's no way that I would need outside capital in order to sustain my growth. This is where entrepreneurs get stuck. When you've got a group of products that are selling really well, a lot of your cash flow will be tied up in placing bigger and bigger inventory orders. And so entrepreneurs wonder, where did all my profit go? When you have access to capital in the form of debt financing, like a bank loan or SBA financing, or even an outside investor, it allows you to place much bigger inventory purchases so that you can spend more money on advertising and get more customers in the door. This freaks a lot of entrepreneurs out because the idea of having debt to keep the business going is really scary for people who aren't used to having that much debt on their balance sheet. But it's a very necessary and healthy part of the process. One of our portfolio brands recently went from about $30,000 a month to about $150,000 a month. And one of the biggest things that we did for that brand was get them a healthy amount of debt so they could place really big inventory orders. This prevented them from running out of stock, and it allows them to be more aggressive with advertising so that they could get more customers. Without that, they had to be very protective of how aggressively they advertised, and they needed to bootstrap that process of getting past a million or $2 million in revenue. Once you see how the math works, this makes a lot of sense, because to finance your inventory, you're probably going to be paying about 10% interest on that debt. But as a result of being able to place a much bigger inventory order, you can often drive down your costs with your manufacturer by 25% or more. So you actually save money and increase your profit margin while also having more inventory. So that you don't run out of stock and allowing you to run more aggressive advertising. This is when you really start to break out. This is how multimillion dollar entrepreneurs think about managing their business. It's not about how do I just sell. More of what I have is how do I plan for the growth that I'm about to have, get more leads in the door and sell those customers more of my stuff. This is why I started the Capitalism fund. Because if that business owner is stuck at 1 to 2 million dollars, we can bring in our relationships and debt, capital and mentorship to help them navigate that transition from $2 million to 4 4. And that often happens in year three. By year four, you have a real business. You've got something that could be special. You're in striking distance of an eight figure exit and you're doing four to five million dollars, which is probably more revenue than you ever expected when you started this business just three years ago. By year four, if you follow this plan, you have a sales channel that is working. You've got customers who are coming in the door from both your primary sales channel and in the form of leads before they ever are ready to buy. So you've got a healthy amount of customers and lead flow. So year four is about solidifying the operations of the business so that you can plan for an exit 12 to 24 months from now. I once heard a mentor of mine say that the 4 to 5 million dollars range in a business is one of the hardest parts of business because you need to hire really good talent in order to grow. But it feels really risky to make those investments when you're running a $5 million. You feel like you should be spitting off enough cash that you should be living the good life. But you're also managing inventory and you're managing inventory financing. And now you've got to hire people and you're still not paying yourself a ton of money. Where did all my money go? The money comes when you sell the business. So now is the time to build that infrastructure so that you can get that $10 million exit in year five. In year four, you now have lead flow and you have sales channels and you've got capital so you can afford to launch more products or to pursue a sales second sales channel. But in order to do that without working 29 hours a day, you're gonna need to hire some help. This is when it makes sense to start building an internal team. And it's gonna be tempting to go for cheap talent to just get people in the door that can take things off your plate. But resist that temptation. Year four is about hiring people who are better than you at the things that got you to this point. If you're taking your sales on Amazon.com, this is the time to hire somebody who is a whiz at Amazon Marketing so that they're thinking about the growth of the business. And you can think about more partnerships, launching more products and casting a bigger vision for the business. This is when you start to shift from an entrepreneur who is working all the time and the expert at all the things in the business to the owner of the business who's preparing to sell it. Year four is when everybody thinks you're killing it and you're barely keeping it together because you're working so much to manage all these different products and all this inventory financing and now these people that you need to hire and staying up to date on what's changing on your primary sales channel and also fending off competitors and learning what's working right now in your industry. You won't have the capacity to work anymore. And so you need really good people on your team in order to help you solidify your place in the marketplace. Your job in year four is to learn how to be an owner. It is to oversee the business rather than to be operating every piece of the business. Because if you want to sell the company for a lot of money, you've got to be able to walk away from the business. It's year five that you can start to think about a ridiculous exit. Year 5 is the time that you will either exit operations or you will exit the business by selling it. Year five is when you need to develop real operating systems within your business. Instead of thinking about what product you're going to launch, you need to think about empowering someone on the team to look for what products they're going to launch. Launch. In year five, the decisions will no longer be yours, they will be the teams. And that's when you know that you're ready to sell the business. No buyer wants to buy a job. So if they're looking at your business and they want to buy it, they're going to look at you as the central operator and say, if this person goes away, we're just inheriting a job. That's not what anybody wants wants. So in year five, your job is to hand off the operations to the team that you built. In year four, this is the time that you will start shopping your business to private equity groups or to strategic buyers. And you need to have the room on your schedule to make those relationships. You won't be able to do that if you're still running the business and thinking about what product you're going to launch. You need to be freed up to go build strategic relationships knowing that the business is safe and growing in your absence. If you're able to walk away from the business and it still grows, the value of your company will go up. If a buyer has to come in and build those systems for you, you will get less money when you go to exit. There are a few things in this stage of the business that will ensure that you get the amount of money that you want in order to have the ridiculous exit that you hoped for when you started this business. The first is obviously that you can walk away from the business. The second is that you have an EBITDA fancy word for profit of over $1 million. So one of the things that you need to have at this part of the process is really clear books and financials that show that your business is profiting over a million dollars. So the ability to walk away from the business showing at least $1 million in EBITDA and a clear growth trajectory, that means that the team that you have in place needs to be operating with their own key performance indicators and they need to be running the business without you, and they need to be growing it. Even though you're not involved in the business. If you accomplish those three things by year four, five, you're in striking distance of an eight figure exit. A lot of entrepreneurs who are early in the process get confused when I start talking about what needs to happen from year three to year five, because it's a completely different playbook than what got them to $1 million or $2 million. But it's important that you know that that transition is happening in the early parts of your business, because otherwise you'll get stuck at $2 million. Now, there's nothing to sneeze. At a $2 million business, you just won't be able to have a significant exit. You'll be running a business that makes you six figures, which is a great lifestyle business, but you won't ever break out of that. I see entrepreneurs go one of two ways. Either they go from zero to a million dollars and then to $2 million and then they stay stuck, or they go from $1 million to $2 million to four to eight to an eight figure exit. And the difference is how they're planning for that growth once they hit that flat line. If you know that There's a different set of skills that is required to get from $2 million to 8 or 10. You can start to prepare for it and you won't be shocked when you flatten flatline at about $2 million. Again if you're at the beginning of your journey. I know that this is a lot. So the first thing that we need to do for you is get you to $100,000 a month. You can do that by launching four products, get them to 25 sales a day at a $30 price point. And if you want to see how we do that, you can download our playbook and our free resources@Capitalism.com playbook. But know that once you're there, there is a different type of skill and there is a different type of playbook that must be followed. And if you want to get to mid seven figures and sell for an eight figure amount of money, that's what I help people do inside of our fund because we invest in those businesses, bring in relationships that can help them solidify the business and manage that transition with much more ease. That's why I teach this stuff, because I invest in entrepreneurs who are in striking distance of the million and help them navigate to mid seven figures so that we can have a ridiculously healthy exit together. If you enjoyed this video, please let me know in the comments. I know that this is a lot for new entrepreneurs, but you've got to see what's coming because I see so many entrepreneurs get stuck at 1 to 2 million dollars and they can't figure out why they can't break out beyond that. Well, this is why. So if you enjoyed this video, turn the like button blue and let me know in the comments. I'm Ryan Daniel Moran with capitalism.com thank you for watching and I hope to serve you on your journey to go from zero to $10 million. See you next.