Codie Sanchez identifies three reasons businesses stall below $1M: the founder becomes the bottleneck with no systems, chasing revenue growth instead of margins (a $600k business at 25% profit beats $1M at 8%), and hiring workers instead of managers who own results.
Chapters
If your business is making the same money three years in a row, it's not actually bad luck. It's one of three things. And the last one is usually what is hurting you. Mistake 1. You're not building the system. Imagine you're pulling 500k in revenue. Your time ceiling is around 2000 hours a year. If you're charging $250 an hour, that gets you to 500k. But you'll never break through because you can't bill more than your hours at this stage, the business is linked to you. That linkage kills scalability. So you got to stop being the system and build the system. Mistake two. You're chasing growth, not margin. So the average small business nets 7 to 10% Prof. Margin. Let's say you hit a million in revenue, but your net margin is 8%. That's 80k profit. Meanwhile, another business doing 600k with a 25% margin makes 150k growth without margin. That's an ego treadmill. Mistake 3. You don't have managers, you have minions. At 500k to a million zone, you need leaders, not doers. Leaders who own their KPIs, solve problems without you and multiply your input scale means you move from technician to manager to owner. That's how you get unstuck.
