The 4 Steps You Need To Build a $10k/ Month Business

There are four things you need to know to build a $10 million a year business. I should know because now I own half of this business, which does $30 million a year, and a portfolio that does nine figures a year. I am going to break down live for a couple hundred of our franchisees. Exactly how you can use four quadrants to increase the amount of money you make, decrease the effort that it takes, and speed up the return of money to you in your business. And also speed secret. It actually works to help get friends, relationships, and just about anything else that you want. We have lessons from billionaires, we have lessons from 100 millionaires, and we have a bunch of frameworks that are going to make your life easier, your dollar return faster, a little bit less miserably. I'm calling this the four things you need to build a $10 million a year business. And the reason why I say $10 million a year is because this is wild. You all right now are already the top 7%. Only 7% of Americans actually own a business. Only 10% of businesses in existence will ever get to $1 million in sales, and only 0.4% of all businesses will ever get to $10 million in sales. So you're already breathing rare air, but it's actually incredibly difficult to get to that $10 million mark. Now, the first rule is a pretty simple rule, except very rarely executed on. And it is speed. It is this very uncomfortable statement that your bank account is actually a reflection of your speed. The faster you are, the more money that you'll make. And I think about this in a few different ways. I was going to draw it up on the screen, but I'll just show it here. You know, the life that I have today is actually a result of not what I did this year, last year, or the year prior. It's a result of what I did, like 10 years ago. And the things that you do today are going to determine the life that you have 10 years from now. Waiting is actually really expensive. And look at this monetarily. Every month you wait to take action on whatever you think or really know you need to take action on. Your business costs you thousands of dollars. So when I look at my net worth, if I would have started buying businesses, for instance, five or 10 years prior, my net worth would have hit a peak and started to compound to a level that now will be hard for me to make up in 20 years because of how fast compounding works. So every month you wait actually costs you a lot of money. And this solidified from me, from reading this book, which is called Made in America by Sam Walton. You guys can read along with us. My whole company is reading this book right now. And it's a story of a man who created arguably one of the most successful retail franchises in the world. What's interesting about Sam is he actually started as a franchisee to a company called Ben Franklin. If you guys didn't know, he. And when I looked at why Sam was successful, I found something really interesting and relevant for all of us. It was the same thing that my mentor, Bill Perkins told me. So Bill, who's damn near close to a billionaire, when I asked him why he's so successful, why he's gotten rich in so many ways, he basically said this. He said, I move faster than everybody else. By the time most people have gone to their investment committee, their board, their employees, pondered it, done a pie chart on it, I've already started, made three mistakes, and found a better way. But I realized that Bill Perkins isn't alone in this, because Sam Walton has the same idea. He calls his a strong bias towards action. And what's fascinating is then when somebody says something to me like a strong bias towards action, I go, what exactly does that mean? And you got to read this because it's so good. Sam basically says, talking about his committee meetings at his company. We get into some of the doggones knockdown drag outs you have ever seen, but we have a rule. We never leave an item hanging. We'll make a discussion and a decision in that meeting, even if it's wrong. And sometimes it is, but this part's fascinating to me. But then once we make that decision on Friday, we expect it to be acted on in all the stores on Saturday. We guard against people saying, let's think about it. We make a decision and then we act on it. This is incredibly rare. Not that complicated, but incredibly rare. So we started something at my company called the 24 hour rule, which means typically in companies you have the seven day rule. You know how you guys probably have with some of your employees at this moment, you go, yeah, I'll get back to you on that next week. Right? I'll get back to you on that next week. That is a very normal American response. And yet that response is where your competition eats your lunch. I mean, you don't have to be better, you don't have to be richer, you don't have to be smarter. You can just be faster. And if you think this is something that was just Sam Walton many years ago or, Or Bill Perkins in a hedge fund. Look at what Jeff Bezos says. He says he stole Sam's homework. He understood that overthinking things can lead to missed opportunities. So instead he encouraged experimentation and quick decision making, even if it meant making mistakes along the way. And I want to push this upon you guys, but there's usually a thought here. We have a saying at contrarian thinking, we try to collapse decades into days. So instead of trying to think about, hey, how could I achieve my goal in 10 years or 3 years? What would it look like if I only had six months to achieve my goal? And can you get your management team to think that same way? If you can, you are going to ultimately either right now, you might be thinking this, go, excuse me but, or your management team is going to go, excuse me but. And at that point, the next comment is going to go something like this. What if I make a decision that I can't reverse? Right? Yeah, I'm fast, but I made a bunch of fast, dumb decisions. Which is why I use something called the speed speed reversibility matrix. Basically, left hand side, you have how risky is it? Low to high, whatever bet or decision you're trying to make and how reversible is it? Yes, it's reversible. To know it's not reversible. And to really simplify this, what you're basically looking for is in all the things in front of you. I mean, how many of you guys feel like, yeah, I don't have enough to do, I could finish my entire to do list, there's no problem. Prioritization isn't an issue. I've never met somebody who runs a business that feels that way. And so you've actually got to figure out what are your quick wins, what are your big but probably really worthwhile projects, what are tasks that you should probably never even touch? And then what are long slogs? Those projects that you have to do over time, but you know that they're going to be hard and they're not going to be reversible. And I want to walk through a few of these today. Now, if I'm looking at a virtual assistant from this model, what am I thinking? Well, if. Is this a reversible decision? Yes, very much so. Is this a really risky decision now? I don't know, 900 bucks a month, you guys could probably afford that. So what does that mean? That means that I have a decision that is easily reversible, that is also potentially low risk and which could have a high impact. I should probably make that decision and the problem with most of our decisions in life is we think that there's only one way to have fast impact and also to have high impact. And that's often not the case. If you, like me, want a $10 million a year business, every time your management team comes to you, and every time you want to do a decision, I want you to plot it. And I want the plot to go very simply. Something like this, you're going to say, okay, right now, I and my business need to make a new hire. Right? I need to make a new VA hire. Well, is that higher going to be really risky? Is that higher going to be reversible? Well, no, it's not risky, and yes, it's reversible. Great. How about, is this hire also high potential impact? Yes, it is. Well, that means we should definitely take this action. And every time you have one of your management team come to you or one of your employees come to you and ask you if you should make a decision, I want you to ask them the same thing. Is it reversible, is it risky, and is it high impact? And depending on their output, that's when you determine if you should make the decision or not. Most of the things in life we do are really a series of finding the two to three decisions every single year that if we make them, our entire life gets easier. A lot of people confuse speed with forward momentum. Well, you could really quickly move into a circle if you don't actually prioritize what your decision making is. And so maybe this framework will be useful for you guys. Guys like it is for me, the truth of the fact is, in business, more money, more problems is just a Jay Z song. That's not a reality at first. I think you have to chase your $10 million in sales relentlessly. That is where you guys should be pushing to. At about that $10 million in sales mark, life gets a little bit easier. At $100,000 in sales, you got a job. At a million dollars in sales, you. You have profitability one month and a loss the next month. At $10 million sales, you've hit that top 1% of businesses. And usually you have enough margin in a business to ensure some sort of survivability. Your survivability rate at 10 million is 60% more than your survivability rate at $1 million. Now, I have one more hot take for you on this first one. So my hot take here is just this. If you don't have an assistant, you are one. All right, number two. So first, we've got speed. Faster you move, the bigger your bank account. Second, we've got delegate, or what I call how to win by getting other people to do things for you. Now this one's really, really important. And right about now is usually when really brilliant minds say something like Warren Buffett, which is, if we all hire people that are smaller than we are, we become a company of dwarfs. But if each of us hire people who are bigger than we are, we shall become a company of giants. There's two problems with that idea. Who goes, yeah, I want to hire a bunch of people dumber and less experienced and not as good as I am. Nobody? Of course not. It's already miserable enough running a business. You want to hire people that are better than you. But the first problem becomes how do you know when to hire somebody in your business? Especially at a lot of the revenue levels you guys are at. I think that not enough companies use this model, which is called the revenue per employee ratio. So how many of you all actually know what your revenue per employee is in either your business, before the franchise or in this franchise? If you don't, it's super easy to calculate. What is your total revenue divided by number of employees? Now what's interesting about this is there's lots of ways to slice and dice it by industry, but at a $10 million a year business with 15 to 30 employees, you're looking about 300,000 to 600,000 in revenue per employee. This is extremely healthy. Most businesses need somewhere between upwards of $50,000 per employee for the business to be profitable. At a million dollar business, you need five or 10 employees. Typically these are cross industry standards, which means that those employees are doing about 100k to 200k in revenue. The other cool thing about when you start measuring your business like this is, you know, per employee, then what their output is and if it's worth it. And I usually don't use contractors on this, I usually only use full time employees so your outsourced VA won't count. Now the interesting part about this, you need a lot less employees than you probably think. So what happens in big business, kind of like government, is the people underneath. You start to think that the more power they have is not revenue, it's actually number of direct reports or budget. Since you guys are just starting out, I really want you to think about it differently. As other people come into your team functions, you should consider that the more power they have is because of the revenue that they drive. Who cares how your team size is in fact, if your team size is smaller, maybe I want to pay you guys more. Because the real power is how much money do you not only bring in overall, but how much money do you bring in and keep, AKA profit? One of my lines at my company that we say a lot is every problem you have is a who, not a how problem. You guys have probably heard this before. Who not how. Also incredible book, could have been a one liner, but the idea is really, hey, okay, instead of thinking how do I do this task, how do I go market my pinks location or my window cleaning location better? Instead of trying to tackle that problem yourself, what would be a better way to do it? I don't know. Probably do something nice for one of the other franchisees who's crushing it in their location and ask them how they do it. Right? But the problem with this idea of every problem you have as a who, not a how problem is that people usually think every problem is a who to employ, not a how to do it problem. And if you think that way, you'll have 100 person business for a 10 person problem. And how we actually want to structure our business, especially this early on, which is really interesting for you guys to think about, this when you start, is that every single employee that you add adds a complexity layer. Something like this right now we got you. The more people that you add in your business, the more complex this business gets. And in fact, in most instances, people don't realize that every single hire does not make your life easier. It does quite the opposite. Every single hire that you have adds a layer of complexity which eventually has cost decrease of profit and also more work inside of a business. So we want to think like Craigslist, which Craigslist revenue is $694 million. Now I think this was like 2022 numbers, but they have 50 employees. The revenue per employee is $13.8 million. So with every new action that you have in your business, how can you get those employees to be worth more to you? When you have a painter that is going to paint a house, how can you incentivize them properly? So instead of needing a painter to paint and also one to go canvas the neighborhood, they do two and one at the same time. They just take 20 minutes to go do the other. How can you start thinking about maximizing revenue per individual? Whether you like Elon Musk or not, the guy fired 80% of Twitter, 6,000 people and the company's still running today. Now the revenue is down. You could say that's because of his. His firing changes. Or you could say that's because of what's happening in media.