How I Would Get A Small Business To $1M (If I Had To Start Over)

I've got 20 minutes to take this business owner to $1 million in sales. Play around and see if we can't get you to a million bucks in a year.

Let's do it.

And if you're wondering, how am I going to do that? Well, I'm Codie Sanchez, and I've worked with hundreds of companies and built a portfolio that does over 9 figures a year in revenue.

Today, I'm going to help a business owner scale her business to $1 million a year, and we will check in after 30 days to see what went down.

You're going to get the behind-the-scenes strategy that other people pay thousands of dollars a month for. This is the boardroom. Let's get into it because We all need to make more money, don't we?

We are a styling agency in Seattle, Washington. We service people nationwide, so we have a virtual option. And we work with people that absolutely hate shopping. They would rather do anything else. They aren't into fashion. And we help people build outfits so that they don't have to do any of that.

And right now we're doing about $350,000 a year in revenue? Mm-hmm. Okay. Love that. That's a lot of room to grow. Okay, so let's start with this. What is the biggest problem in your business right now? The thing that is driving you absolutely insane?

We have multiple avatars, so our messaging does not feel consistent, or it feels just like too broad, like we're trying to capture everybody. And I think that's affecting who we are targeting.

I want to go through probably 3 things that I think are going to lead to your first million more than anything else.

The system we use in Boardroom is called the 12 Profit Levers.

We're going to talk about pricing, we're going to talk about product, and we're going to talk about persona. So let's rock and roll on persona first, because that's sitting at the front of your mind. Tell me about your worst client right now. Like, paint the anti-client, the person you're like, please no more of these, I never want one again.

I'm sorry if you're listening, but it is for people that are starting their business, or they're really in that place where they're kind of lost in finding what their style is. They're on a budget more, so they're really trying to figure out, like, do I trust the process? Do I trust what they're choosing for me? So then they want to end up taking over and taking control, and then they don't get the That's the client that we don't want.

Okay, perfect. We call that a red flag avatar. So we don't want those. Now name the best client, the person you're like, if I could just clone 52 of Michael and sell to them, I'd be so happy.

The client that travels often. They are C-level executives, they are lawyers, and they trust the process. They do not ask a lot of questions. They wear the pieces, they wear the outfits, they are happy. They come back multiple times throughout the year, usually 3 to 4 times to rebuild their wardrobe.

How much does the bad avatar Avatar, your red flag avatar, how much do they typically make?

That's a good question. I would say probably under $150,000.

Cool. Okay, under $150K. How much do you think they spend on clothes a year, this bad avatar?

Our clients don't like shopping, so usually they've avoided it for a while or tried and returned everything. I would say that when they shop with us, their budget is around $1,000 to maybe $2,000 for one shopping trip.

C-level exec, what do they make and how much do they spend?

Oh, they make At least half a million a year, and then they end up spending $7,000 to $20,000 in shopping in one shopping trip.

In one trip. Nice. I still think at $4K, you're pretty cheap. When was the last time you raised your prices?

That's a good question.

Let's talk about an anti-sell really quick. This is actually telling people you are not welcome here. This is in the chapter on people, but I talk about hiring there. What about for your actual customers? It's just as important. So what I actually want you to do is I want you to write out your commandments. You're going to do this in reverse. Like at this company, I want you to write the things that mean you are not actually welcome here. So for Tanya, this might be, for instance, you have to have a couple hundred K in income. Otherwise you're not gonna be able to spend the at least 10K this costs. We're not a fit for you. You also have to be located in Seattle because we only do in-person You actually also have to have— be an executive, because we actually don't work with people that aren't executive-level status. You want to pick your own clothes and do the whole thing? We're not for you. We actually need you to just want to hand it over to us. Nailing your main people and excluding the ones who are not right will make you more money. Let me tell you what a bad ad or social post is going to look like for you. We help you if you hate shopping and you never know what to wear. You want to come to us because we're going to do it for you. For you. And you only need to do it once or twice, right? That is actually going to attract something terrible, even if it gets more views. What do you want to do instead? Something that probably doesn't get as many views but is really specific. We only help C-level executives. We help people who are pretty serious about looking good, and they want to spend the money it takes to look good. Like, if I'm an executive, I'm a little embarrassed in some ways. Are some of your executives embarrassed that they don't look that great and they don't care about clothes?

They are.

So they're probably not gonna self-identify as, yeah, I always kind of show up looking shitty. They might say things like, I hate shopping, or I don't have time to shop, or I don't prioritize shopping, because they're preserving their identity, right? So even on your website where it says like, become the person who always shows up put together, I like that, but it might be like, you are a serious person, we'll make sure your wardrobe reflects that, right? So lead with the part where they're awesome. Already, 'cause you want winners.

I like what you're saying, and I actually did a podcast episode on this of you already have the confidence. You don't need the confidence with your wardrobe. You just need to make sure that you look the part and you can focus on what you're doing.

Yeah, 100%. I mean, what you're really saying, this task is not important enough for you. Let me be the expert at it. You go kill it as a big executive. You need to outsource this. This is not worth your time, you know, and you will allocate a budget to us to do this because I'm gonna make you look so incredible. We're nailing our budget. By saying first who we hate and we never want to serve. Then we're saying, who do we love? In your perfect world, and you don't have to say the name, but you want to name them.

You want a real human as opposed to they. I never do that. I want you to take a picture. If it's Michael or Sarah, you have a picture of Michael or Sarah. You're going to find out explicitly how much do Michael or Sarah make? What jobs do they have? How much do they spend? Why do they love you? How often do they travel? How often do they want to do this? And then you are literally looking to clone that human, like, again and again and again.

Okay, cloning your perfect client is where most people lose the thread.

But everything I just told Tanya about cloning Michael only works if Michael is written down somewhere. That means their income, title, what they spend on your product, how often they travel, why they picked you instead of the other option. Most businesses this size don't have that list. So instead, I want you to use what we use. Go to HubSpot's new Smart CRM. You can get started for free. What's cool is you can now update it by itself using their integration AI note taker so you can record every sales call and the transcript goes into your CRM. So now instead of having to rely on your own notes, you're getting reliable backed up data of your prospects while you're on the call. And then the smart CRM will suggest next steps, draft emails, and suggest updates to your deal notes. And why that matters for a business, especially one that's small like Tanya or just getting started, this information is what helps you get on the phone with them again when you're ready to sell them a bigger package. You can't do that on memory. You run it off a list that you can sort. So you can get started for free. The link's below and it's new from HubSpot who's sponsoring this video. Clone your customers

and you can keep it organized. It has been our biggest month. You told me I was kind of going all over the place and wanting to reach everybody and we have been focusing on executives. So, and the reason why is because all of the branding is just, you're only intrigued by it if you are that avatar. So we're attracting the right people now. We have been in business for 18 years and I can't believe it took this long to be able to reach that.

What does the tech person want? You might have a product, Like, in their perfect world, if you got in the head of the best tech client that you can get, what do they want?

They want outfits that they could wear to work, that they could wear the weekend, that they could wear when they work at the coffee shop. They don't want their style to change too much between what they're doing. And then they do want some going-out outfits when they go on a date or are going out with their friends, but they don't need too much of that. And they don't want to stand out.

They do not.

No.

Talk to me about that a little bit more.

In tech, it is not common to stand out. Everybody kind of wants to look the same, so they just want to feel good and put together and get out of jeans and t-shirts without drawing attention. So it would be like quiet luxury.

I would try to keep your things really clean. So for like— and I might call it this— for C-level exec, it's 4 times a year. Why do we do it this year this way? Because we have to have a seasonal look at your wardrobe.

It is the same every time. We're going to send you this many pieces. You will be prepared ahead of time for that season for tech executives. And I would probably name it that. It is 2 times a year and this is how it's executed. And then for this lowest level avatar, you're going to say it's once a year, but that should actually have a bigger price tag than those one-off visits. You know what I mean? Yeah.

So you want to go like $1,500 $1,250, $1,000, right? So if they go with you 4 times, they're getting a discount of basically $250 to $500 every single time. And you put it on the calendar and you set it all.

I love that you brought that up. Our recurring is what we do after they experienced it one time, then we sell them into recurring, but it's not on the website. But I like the way that you're structuring it of just saying it upfront, because when we're doing that, we've also had issues with the upsell on like, How far afterwards do we contact them? What is our upsell going to look like when they already paid this? So I like just being upfront with it.

You know how many people are on a recurring plan with you? Is there anybody?

Yes, we do. We have 6 to 8 right now. And I do think now that you mentioned the recurring, I think that will change things because I think people are scared in the beginning of saying yes to something big like that. So I think also even Selling that is going to cost more in general, and it might take out more people.

You're gonna get them on the plan, and then you're gonna say, listen, this is like— here's my personal guarantee. I come into your house, you hate me, you don't like what we do, zero worries, we get rid of the other 3, no problem. And then you just say, and also, by the way, that never happens. So like, I wouldn't worry about it, but 100%, that's our guarantee for you. So I think your close rate will still go down a little bit, but that's okay because you're getting the right kind of customer.

If I'm you, I want the 3 offers right here, and I want to see what's called an offer stack.

Okay.

And because I'm fancy, which is what you want, I'm always going to pick the one that looks most premium. And a lot of your clients are going to do that. And so what I want is like, here's your one-off bare bones, a couple of things. Here's your mid-price, which you're very happy if people do a couple of things. And here's your big dog price. Lots of offerings. She displays product like this. You can see it on her website right here. She has what's called an endless scroll. This is no bueno. She says product 1 here is worth $4K. Product 2 here is worth $2K. Product here, I don't know, call me. If I was her, I'd flip it. And instead of having it go this way, I'd do an offer stack. And the offer stack would go like this: basic, then it would go executive, and then it would go C-suite. Anybody who's aspirational, is going to get a long list of things and inclusions. The mid one will get a smaller list. Basic will get a very small list. This thing is going to have a serious price tag on it. This thing is going to have a mid price tag on it, and this thing is going to have an entry-level price on it. What also really matters here is what is the visual representation of each of these? It should actually look like the name. There needs to be a little executive on here looking fly. There needs to be somebody who probably looks more like an employee. Employee here, and there needs to be a CEO-looking motherfucker with a briefcase that somebody aspires to here. The other thing that I didn't even get to with her is if you look at her website, what do you see? Tanya, Tanya, Tanya in all the images. Nobody cares about you in your business. What should you see instead? Before and after photos, before and after photos, before and after photos. You want to show them you're here, I'm going to take you Promised land, right? So I would also change up the way that she is actually showing and promoting her business.

One of the first things I did was change the pricing structure and the website. So we did the 3 columns like you said. With our new avatar, they need us more consistently. So they're signing up to work with us 2 times a year or 4 times a year now instead of one-off every once in a while when they need support. And that really is more sustainable. sustainable for our business too. Only 10% of clients now are choosing the one-time offer as opposed to being a member throughout the year because they like that discount.

We're going to look at these prices. Do you have any idea on your close rate, like the number of leads you get and then how many people say yes to you?

Yes, I'm the one still doing the sales, so I do close about 80%. We only have 20% of people that don't close.

Oh man, Okay, I love this. I also hate this for you. How many proposals are you getting, or leads are you getting a month?

We do not get many, so I would say we get 5 to 7 new leads a month.

Okay, perfect. So basically that means your pitch is really good, but we've got to increase the promotion tab. So we've got to get you more leads. So once we nail recurring clients, we nail the perfect fit client, and we realize your close rate is incredibly high— you basically have 2 ways you can get to the next, let's call it $400K or $500K in revenue, which is going to be, can you increase your pricing for your current customers, or can you get more customers? For your current pricing, I believe if you're closing at an 83% rate, you're too cheap. They're not saying no to you enough. When was the last time you raised your prices?

Actually, 2 months ago. It was $1,500, and then we put it to $2,000.

And what have you seen happen?

Now more people are doing that middle one, And I'm finding that the executives are doing that bigger package because they're like, I just need a lot more things and I need more support.

Now, one thing I want you to do when we go back on all of this, it's totally fine right now for you to have like generalizations. When you go back, I want you to do something really uncomfortable. You're going to ask them. It's going to be part of your inventory. How much money do you make a year? How much do you spend on clothes? The reason why is because we want to try to figure out your pricing, and you can't figure out how to properly price until you can see how much of their monthly or annual spend you actually represent as a portion of it.

Most people price like this. You can see it in actually the persona chapter in the book. They basically say, all right, if everybody else is a gym that charges $100 a month, I'm going to charge $100 a month. This is called market-based pricing, but you're not gonna do that. Instead, you're gonna look at wallet share-based pricing, which is basically what does the customer spend with you? Let's take $100 over how much does the customer spend in the category in total? You're gonna times it by 100. What are we looking for here? We are actually looking to make sure that we're not sitting in what I call the zone of death, which is below 20% of our wallet share. Wallet share, how much we and our customers spend on this category in general. Analyze how much your customer spends, then increase the percentage you are of that customer spend. That's how you make more money. Have you experimented at all? I think probably—

I love that you raised it. I still think at $4K, you're pretty cheap. I think probably messing around with $4,999, there's some psychology to keeping it to 4, would probably be smart. And then what I'd also like you to do is increase the price for the one-offs.

Okay.

So for the one-offs like we talked about, it's gonna be like right now you have it at $2K, I'd put that at $2,500, and then if they sign up for this recurring, which is what you're really asking them for, they're gonna get that discount on it.

I didn't want to overwhelm Tanya with too much, but we haven't even talked about what's called an ascension ladder. There should be a natural progression from the things you do that are the cheapest to the things you do that are the most expensive. And when you have a natural ascension process, that means you don't have to get new customers. Your customers just grow into each stage of your business. This is what a good business looks like. And that means instead of having to go out and get new leads continuously, you actually just take your current leads and move them up through the business overall. Not enough businesses do this well. I like you to do your first 3 to 10 phone calls direct to customers. And say something like this. Hey, I really appreciate you being part of my business, and I wanted to get some advice from you on how I could better serve you. Do you have 5 minutes for us to discuss? Yes. Great, cool. I'm gonna call you right now. So I realized that my best customers all look like you, so I wanted to talk through something I'm doing for some of my best customers and see if this is applicable to you or if you'd want something different. Then you actually pitch. They're gonna say, oh yeah, sure, great. I love being your best Then you're gonna pitch them something. So you're gonna say, okay, right now you do X service. I have this other service that's even higher, and I realize I've done you a disservice. I've never actually talked to you about it. So instead of only doing once a year, for my best customers, I do 4 times a year, which means that we get to refresh you constantly. It also means you're in season. It also means we can find things at a discount or before anybody else has them, whichever one's important to you. And what I'd like to do is move you from a once-a-year client to a 4 times a year client. Would that be something that sounds interesting to you? And you just shut up. After talking to 3 to 10 of them, you're probably going to get 1 to 2 that say yes to you, and you're going to get a lot of feedback on what doesn't work. If I do it this way, it works. If I do it that way, it works. Then if you have a business just as small as hers, I think all she needs to do is a call tree. So she just needs to make part of her day— I've done this in every single one of my businesses when I 30 to 60 minutes of every single day, you're calling all of your customers that are current customers and historical customers, and you're using the exact same script. After you're done with that, you've gone through your historical backlog of clients, you've gone through your clients that are current. I would go to any of the dead leads that I'd had previously, and those dead leads, don't try to sell them the old thing. Sell them the new thing because they don't even have any price anchoring where they're already used to paying you less. Sell them the expensive thing.

I was hesitant actually raise our prices again. Of course, I'm going to follow what you said. And I did it. And I'm so glad I did because it ended up working out. And people didn't hesitate. People didn't come on the call and say, oh my gosh, I can't do this. They ended up still booking with us. Our September sales were 52% higher than the average from June through August. And it just blew my mind of how quickly making these changes would actually impact

So talk to me about how do we get new customers right now? So what is your way to do promotion?

Our top is organic Google search. We tried doing Google Ads a few times. We did 3 months and we spent $500 to $800, but I don't think we did it correctly in the target market that we were trying to reach, and they were not good leads. And so I turned them off.

Yep.

But I will say Google search is our top. Our second is one of the dating companies that we work with that sends us leads. Sends great leads to us, so we upsell them from a call that we have with them. And then the third is just networking. When I go to events, me networking, being part of the community, different chambers. So that's more just organic as well.

I actually think you're really smart for killing ads. Your business is too small for that to be the next right move, and it's a little too bespoke and one-off. And those type of people are actually really Expensive to target, and you don't have enough margin to pay for that targeting. So what do you do right now to get your customers to bring friends?

We haven't done anything. We've tried asking people if they have anybody, but even I try to think of myself when somebody asks me, do you have anyone that would love our services? I never send anyone any information. So I even think of myself when I do it. I don't have a way of bringing people in.

Who has ever given you referrals in your business? Have any of your customers given you referrals?

I've had, I've had a few people that give referrals, either their friends or somebody that they work with. Those are the top 2, friends and somebody that's from their workplace.

And are they typically your C-suite executive?

No.

Which, they're the tech? Mm-hmm.

Okay.

What we want to do, one of the key components to a good tier-level avatar is that they love you so much they talk about you and they bring friends. So we need to make a change to our top-level avatar. But the first is, how often are you asking your customers and how are you asking them?

Not asking often. What we ask for is more reviews. So we do send something that they fill out so that they can write a review for us and we get a lot of reviews.

So here's what you're going to do. You need a checklist for how you ask referrals every single time you or any of your contractors are in their house. You need it to be laminated, you need to have a check mark that you actually did it, and the checklist should have a full thing. You should walk in with your binder or however you do your process. I have a checklist I got to make sure while we're going through this. Okay, what about this, this, this? All the normal stuff you do, but on there is a big glaring red flag of ask for who else the service is for. So, at the end when they're feeling good and you're like—

you want to give them a compliment before this, You want to give them one item that's so amazing or call out one thing they already have that's so amazing and say, okay, this is great. What I've often found is people like you have other people just like you who probably don't like the shopping but need the outfits and all of that. Tell me, who else in your circle needs this? Does your wife or husband? Because one of the first things you probably should be doing is going close to home.

What about another executive or 2 at One of the best ways that somebody can show that they care to other executives, because you're not just like an employee, you're an executive, is by helping them look better and work too. Like, you become the connector.

Does that make sense?

Yes.

Okay.

So then between getting your nailed avatar, increasing renewals, increasing referrals, and increasing your pricing and product, we're going to get you to somewhere between $700K and $950K in annual rev. Now, the cool part about this, we didn't even talk about getting leads yet. These are just with your current customers and your current customers giving you more customers. So I don't even want you going out and spending money on ads. I don't want you going out and doing, you know, more happy hours or networking until you've nailed these 5. Make sense?

Yes, I have a great to-do list. And yeah, this helps. So now I can focus on this right now.

Yeah, don't do the things that don't make you money. Forget anything that people tell you to do that isn't gonna drive profit. That's all we care about right now. Let's make this business more profitable, thus more fun for you, and then you can dance on TikTok if you want.

I love it.

Okay.

Thank you, Codie, for not only just being very honest with me, but telling me what I was doing wrong and what I needed to do differently so that I can implement it. This has completely transformed my business, and I wish I would've done this sooner.