4 Reasons Why You MUST Grow Your Business to $1M

Hey everyone, this is Mike Andes and you're listening to the Business Bootcamp podcast. Today I'm going to be sharing with you why you want your business to grow and why, specifically why you want to grow into at least a million dollar business. I'm going to be talking about why and kind of defending my stance on this issue. Since I've talked a lot about scaling up and growing to becoming a seven figure business. I get a lot of feedback from people saying, hey, that's not for everyone. And I agree with that statement. But I, but I want to give you the reasons today why I still feel that we should be pushing towards that and scaling our businesses to the point where they make a million dollars and they have the growth to be sustainable. Before we get into that though, a big thank you to today's sponsor, Gusto.com if you haven't already go to Gusto.com Bootcamp, you can try a free trial of their software for 90 days. I have heard from countless listeners that have tried QuickBooks in the past and QuickBooks Payroll or other forms of online payroll services and working with benefits and things. And by far and large, Gusto has always been the best in terms of price and customer service and ease of use for you and your employees. So check it out. For all your benefits and all your payroll needs, check out gusto.com bootcamp get that exclusive 90 day trial. Now. Today I'm going to share four different reasons why I feel that scaling up to a million dollars in revenue is very important. And I talk a lot about on this podcast about marketing and ways of growing your business, scaling up, creating a team, creating a culture, all of these things. And I get a lot of emails. I'd say, I don't want to say a lot, I don't want to exaggerate. I'd say maybe a few a week I will get people that will email me and say, hey, look.

You always are talking about scaling up and growing and expanding your business. And for me, that's not the right thing to do. And for some of them I agree. But I want to clarify today, for the people who are not writing in and thinking the same thing, I want to clarify my position on this and why I talk so much about growing and scaling up your business. And so I'm going to give four reasons why I feel you want to get to at least a million dollars in revenue. Now, I know for a fact that that there might be only one or two people that listen to this today that actually does something about it. And will grow their business because of this episode. But I'm willing to do this whole episode for you if you are the person that's gonna make the change. Because it's absolutely life transformation. It will completely change your life. The way you look at business, the way you look at your business, the way you look at business in general. And so I'm willing to share this with you. And I hope that it clarifies my stance on some of these things. Cause I do talk a lot about scaling up, I do talk a lot about grow, growing your business, marketing, getting to the place where you can hire things out, delegate and become the CEO of your business and not be working in your business. So I want to talk about these things and I'm not even talking about like lifestyle things in terms of not having to work in the field or working in the business, you're able to work on the business. I'm not even talking about lifestyle, I'm not even talking about that. I'm not even talking about making more money today. I'm talking about four other reasons that I feel make it very important for you to get to a million dollars in revenue. I don't care if you are a property management company or a cleaning business, or a landscaping company, or you're a gym owner or whatever you do. Getting to a million dollars in revenue is that point that I feel. The reason I say a million is because it's a very easy number. Seven figures, it's round, but it's a number that I feel as I look in more and more businesses, the ones that are more fragile are the ones that are below that figure. And so it's something I want to talk about today. It's something I have eclipsed in my businesses and continue to do. And hopefully we get to eight figures in the near future. So that is our goal. And the reason for that is basically magnifying what I'm gonna be talking about today. So why do you wanna make a million dollar company? And I don't wanna sound. This is the deal. The reason I said about one person here listening and actually making a change is that it is very unlikely that the vast majority of people listening to this are going to run a million dollar company. It's just not. You run the numbers, it's just not practical. If you run a business that makes a million dollars in revenue, I mean top line revenue, I don't mean you're making a million dollars and taking it home, just a business that runs a million dollars in revenue, the vast majority of humans on this earth, let alone Americans, are going to ever be able to attain that position. So it's really, it's a very, it's a crazy thing to say. It's a very audacious thing to say that everyone here is going to run a business that does a million dollars in revenue. I don't expect that, but I do feel it should be your goal, the ambition, the place you're trying to get the business to. And like I said, if you are the one or two people that make the changes in your business necessary to get you to that place, by listening to this episode, this episode is well worth my while. So, number one, the first reason why I would say you want to grow your business to a million dollar company and why you want to continue to scale and grow and not think small. Number one reason, economies of scale. For example, I'm going to use my business for an example because we've passed a million dollars in revenue and my landscaping company. And because of that, I'm able to talk about the pros before and after. Now that we're on the other side. Economies of scale, you have more buying power when you have a larger business. So for example, when we bought.

Products like fertilizers, for example, products like that, buying that from the store by the eight pound bag, you might pay $10 per pound, just for example. Now when we're a million dollar company and we use a lot more product, we use five times the product, we can then order that product by the pallet. And now because we're ordering it in bulk, we're now able to have more buying power. And now all of a sudden, that $10 per pound product is now costing us $4 per pound. And guess where that $6 per pound goes? That change that goes in your pocket, that's profit. So you have more buying power when it comes to equipment. When it comes to real estate, whatever you're doing, I'm not gonna get too specific to lawn care and landscaping, but whatever you're doing, you have more buying power when it comes to materials and things that you need to buy. And when you have the economies of scale, you also are able to see efficiencies much more. So, for example, if I am wanting to convert my trailer system for a landscaping company, so we do mowing, for example, and we have enclosed trailers. Now if I want to change out all the racks in my trailers and I have, let's say, two trailers, it's gonna cost me three or $4,000 to do that. If I'M a hundred thousand dollar business. I am giving up 3 or 4% of revenue in order to put these racks into my. It's gonna make me more efficient. It's making me more efficient, making me more lean. It's gonna organize things inside of that trailer and it's gonna cost me 3 or $4,000, but I'm only making $100,000 in revenue. So I'm spending 3 to 4% of revenue on this change, this efficiency, this mechanism to increase change. Now let's say that I'm now doing a million dollars in revenue. I'm gonna spend $10,000 equipping more of my trailers with this racking system. It's gonna make me more efficient, it's gonna save me money. Now this is the key. If you're doing $100,000 in revenue, it's gonna take a long time for you to recoup the cost of that three or $4,000 in time saved inefficiencies. It might take five, 10 years for you to actually recoup that three or $4,000. If you're only making $100,000 in revenue because you're only using the truck a couple times a week or whatever it is. Now, if you were making a million dollars in revenue and you spend $10,000 on this racking system, that's only 1% of revenue. So it's less of a dent. It's a third of the dent that it would be before. Now the thing is, now you're doing more revenue, you're using that truck more. That system is being used more often. And because of that, your efficiencies, the dollars gained by that efficiencies are much greater. And you recoup the cost of that initial investment much faster. And I might have lost some of you there, but I hope you go back and listen to that again, because what that means is that $10,000 I spent because I use the trucks more, because there's more hours that they're actually being used, that system is being used. The efficiencies that that system creates begin to pay dividends much faster. I pay that $10,000 off in one year based upon the efficiencies and time saved of my crew. So there's economies of scale, even when it comes to percentage of overhead. So for example, let's say I'm in this studio here, 2,000 square feet, and I am starting my business and I'm doing 100, you know, let's say $200,000 in revenue. I might not have to increase overhead or get a bigger space until I'm at like $3 million in revenue. And this is what I find a lot with small businesses is their capacity for inventory or their capacity for growth of their real estate or these big overhead expenditures is much greater. So for example, equipment, trucks, real estate, those are some of the big overhead items you might be looking at. Ask yourself, if I increased the size of my business, would I be able to use the same footprint of real estate? Would I be able to use the same amount of trucks? Would I be able to use the same equipment that I have right now and still be able to produce the additional income that that growth brings? And I find a lot of times we're not using our equipment, you know, around the clock. Maybe you have a factory, could you do a second shift on that factory? Instead of only doing day, could you do a night crew? Could you run three, three shifts in a day? If you have that factory, all of a sudden you begin to realize that you can produce a lot more of growth without actually having to expand your overhead. What that does is your overhead percentage of revenue decreases. So for example, if I'm making 100,000, let's say $120,000 in revenue in one year, that's $10,000 per month. Alright, follow me on this. Let's say I'm paying $1,000 per month of rent for this space of 2,000 square feet or whatever, my office space, I'm paying $1,000. What that means is I'm paying 10% of revenue every single month to pay for this space. Now I ask myself the question, could I do $360,000 of revenue in this space three times? Could I triple my revenue? And if the answer is yes, this is what happens. All of a sudden, your percentage overhead that you're paying for rent goes from 10% to 3.3%. So as your company scales and grows, your overhead percentage of revenue decreases because your fixed expenses like rent, equipment, whatever you're doing, many times stay fixed. And yet you can still begin to grow. And that change, that difference, that 7% difference is all profit. Alright, so I know I'm getting in the more in the weeds of things than I usually do on this podcast. But I think it's very important for us to begin to realize that growth is not just about ego and having just saying you have a seven figure company. There are actually legitimate reasons to make your company larger. And this is why I feel I wanted to make this episode today. Second reason, I'm gonna try to get through these a little faster. Number two, the second reason why you should scale up to a seven figure company and why you should grow your business. Number two, culture and the size of your team. Alright, so it's very hard to have a team of two or three people, two or three employees and have great culture. It's just very difficult. It's hard to do. It's very, almost impossible to do anonymous peer reviews. And I feel that's really important. It's much easier to have one person fall out in a big issue within the company because if you have three people working and all of a sudden someone leaves, a third of your workforce left, catastrophic event. If you look at that, all of a sudden Tesla, 33% of their employees walked out, they'd have a big problem. If you have three people working for you and one person leaves, just one person, family, something happens, medical issue, whatever, one person leaves, a third of your workforce has just left. And it's very likely that's going to be a catastrophic event for that business. So by having a larger business, you're gonna be able to hire more people. And by hiring more people, you're gonna actually create a culture and lower the risk that you would have if you only had a couple employees. Alright? It's much easier to create a culture and an environment of support. And the dynamics of a team is much more interesting when you have 10, 15, 20 plus people in comparison to 2, 3, 4 people. Alright, so this is something that I'm playing with, are struggling or thinking about right now is because I have Anytime Fitness, the gym where there's four or five people on the whole team versus Augusta where there'll be 20, 25 people this year. Probably right now I think it's at 15, 20, like that's where we're at now. We'll be growing up to 25, 30 people maybe this year. And it's easier to have a culture when there's that many people because there's different environments, there's different, there's different people. You have to begin to learn how to deal with other people. There's leadership involved, there's different, there's strengths and weaknesses, you lean on people, there's a lot more dynamics. That's the word I'm looking for, dynamics within that team environment because there's multiple and more people involved. You look at teams like NFL, NBA, mlb, the size of those teams is quite substantial. Yes, there's nine people on the field in, in a baseball game, but there might be 30 people, 40 people on that team, there's 70 some odd people in an NFL team. Like, there is a certain dynamic that comes with more people involved. And so creating a culture, a powerful culture that's able to weather the economic, political, environmental.

Things that happen in the local economy. Those things are weathered by having a strong culture. And a strong culture is much, much stronger when there's more team members involved. And another part of that is talent cultivation. And even acquisition, like finding great people to join your two or three person startup is a little harder than when you have 500 people working for you, or let's say 20 people working for you. Even it's much easier to find some. Most people want to be part of a team, they want to be part of an environment, a culture. And so acquiring that talent is going to be easier. But more importantly, talent cultivation is easier when you have a larger company. Because now when you have a larger business, you're able to actually have someone start at the bottom and actually have a place to grow and a place that they want to try for and try to achieve for. If you have a small business where there's two or three employees, they don't really have much latitude to go up the chain of command. They don't have much latitude to grow their skill set because it's a small business, they are stuck. When everybody does everything, everyone does the accountant, everyone does the hiring, everyone does the marketing, and all of a sudden there's nowhere for them to learn or grow with the business. And so by having a business that's growing, that's of scale, that is larger than a small one or two person operation, you're gonna have positions of growth for them to grow into. This is something I think about with my landscaping company. I don't really need it to grow. I'm much more interested in creating the model and the framework and testing things there and then giving it through the podcast, my course and conference in this training facility and things, that's me. However, I know that in order to retain my team, I have to cultivate their talent. They're talented people, they're ambitious people, they'll need places to grow into. And they're not going to be happy mowing a lawn for 10 years of their life. They're going to want to become a project manager, they might want to do estimates. There's going to be places that they can grow within the organization only for one reason as because it has scale and it's grown to a certain size. And so I continue to focus on growing that company for the singular Purpose of being able to cultivate talent that starts at the bottom, starts mowing. They become a project manager, they make, might learn sales and estimates. And then all of a sudden I need them in another role, I need them in another business. I need them to take over a company that I've bought and turn the culture around. I'm going to be able to pop them out of that environment that I've created. And they've been cultivated, that talent has been cultivated and put them in a position that they can grow and succeed and change a culture. So that second reason why you should get your business to size is culture and, and talent cultivation. Number three, when you create a business that's doing a million dollars in revenue, and I know I'm generalizing here, but when you create a business of size of seven figure company, you have to, it forces you to create systems. It's easy to run a 100, $200,000 operation by yourself. It's easy to do everything by yourself. In that environment you're more profitable because there's no labor cost, things like that. However, it forces you to make systems when you start getting to a million plus dollars in revenue. And even for people that are at home and do everything by themselves or a one man operation, if they're making a million dollars in revenue, it's very often they're working with designers and freelancers and web developers and accounts and they have a team of people, may not have an office or whatever. But I'm just saying in general, if you're hitting a million dollars in revenue, you're doing it with other people. And you had to create systems and procedures and make a business that is system centric instead of people centric, personality centric, that is you as the owner, you want to make sure that you're not creating a business that's personality dependent because it's not going to sell, it's not going to be an asset, it's not a business, it's a job. And so I highly recommend for you to create systems and it forces you to create systems. When you get the business of size, where you physically cannot be in all the places, you physically cannot do all the tasks, you physically cannot juggle all the balls. And it, it forces you to create systems, procedures, hire people and put them in the place where they're going to succeed. That's number three, is it forces you to create systems. Number four, by creating a business that does a million dollars plus in revenue, you're gonna create a business that is less fragile. I'm not saying it's gonna make you impregnable, but what I am saying is it's gonna make you less fragile. So when a big emergency happens, a big tax bill comes in, big one of your best hires leave now. This happened to me when I was doing, let me think, maybe.

$15,000 a month in revenue back in the day. Had a great employee, fantastic. Still count him as a friend to this day. Was my first employee. I always thought he was going to be like my number two in command and really be the managing the field. He decides to leave now. For me, that was devastating. I literally thought about closing the business because, like, you know what? I can never find someone just like that. And I didn't. I did never find someone like that, that worked that hard, that was that knowledgeable, though that was that trustworthy. That never happened. But what I did realize is that the sum is greater than just the one person. Like the. I don't even. I forgot the lingo. The sum of the parts or whatever like that, whatever it is, the combination of everyone's. That's greater than the sum of the parts, whatever it is. I realize that having a team in place, they may not be as incredible as that one individual, but it's gonna be a whole lot less fragile to have 20 people than just that one great person. So you might be leaning on someone right now that's great within your organization, a great salesperson, a great admin person that you're leaning on. You are fragile to some extent. If your business does not grow and you're able to have assistance to them that can step into their role. And so if someone leaves, is your business fragile? If one individual leaves, is your whole business going to fall apart? By having a business of scale and having more people in the team and having systems in place and having the size of business that's a little bit larger, you're able to be less fragile when that person leaves because you have other hires below them and people that they've trained, people that know the systems that they've already integrated into your business. The other part of it is it's less fragile economically. If a big tax bill comes in or an unexpected event happens, like, you know, a piece of equipment goes down and you all of a sudden need $50,000. If you needed $50,000 when you were making $200,000 a year again, that's 25% of revenue is now going towards this expenditure of broken equipment. $50,000 is only 5% of a million dollars in revenue. So by Making your business of size, those hiccups become a lot less impacting to the business when things do go down, when things do go awry. And by the way, a bank is more likely to give money to you. In the case of those extreme events, those one off events, when you have a business that is growing, that is of size to be able to pay off a large debt. When an unexpected emergency happens, this is like a broken piece of equipment, an accident out on the road with one of your trucks. This is someone suing you, an employee suing you, a customer suing you, whatever it is, those things many times will put a small business under. That's what puts them into bankruptcy, that one event. Many small businesses are one event, one calamity, one emergency away. They're one employee away from literally going under. That's a fragile business.

And I'm not saying by getting to a million dollars in revenue you solve this problem. What I'm saying is it makes you less fragile because you have other people in place. If that one person leaves, it means you have, it makes a smaller impact on your bank statement, on your checking account. When a $50,000 expense comes in and it's not 25% of your overall revenue going out the door to fix that thing, it makes you less fragile because a bank is more willing to give you money when that thing does happen because you have a track record of growth, profitability, expansion and they trust that you're going to be able to pay a large sum back that's less fragile. So I highly encourage you to get to that place. I understand there's people that cannot run a million dollar business and they shouldn't and I'm totally fine with that. Some people that are self aware to know that they're not gonna be able to manage people, they're not gonna be able to manage the money, they're not gonna be able to figure out certain systems and procedures or it's just gonna stress them out. They should not run a million dollar business. I'm not saying this is for everybody, I'm not saying that everyone must do this. But from a business standpoint, from a business standpoint, not from a personality standpoint, not from you and what's best for you and that your stress level will be too much, or that it's gonna adversely affect your health, or it's gonna take you away from your family, or you just want to work by yourself, or you don't like to work with other people, people you don't have the experience in the industry, whatever it is, whatever excuse that is, whatever reality it is for you, maybe it's health concerns, maybe it's health issues you've had in the past and it's going to keep you from having a bigger business. That's all based upon you and your own personal issues. But when it comes to the business, the organization, the organism of the business, it's healthy for it to grow, it's healthy for it to expand and it's healthy for it to become of size. And I just throw out the number of a million dollars because of nice easy round number for you get to and I can promise you being from someone that was just several years ago on the other side of a million versus now to being in the multi million is a much different game. It's a much different game and these are the four things. It gave me economies of scale. It allowed me to create a culture and a team that I can cultivate their talent. Number three, it forced me to create systems, delegate, give other people leadership and roles within the business. And number four, it made my business less fragile. You've been listening to Business Boot Camp podcast. I'm Mike Andes. If I can help you grow your business, scale it up, please email me just go to businessbootcamp podcastmail.com send me an email. You can also just go online businessbootcamppodcast.com fill out the form. I'd love to help you and see how we can improve your business again. Mike Andes, businessbootcamppodcast. Com until next time. Be great because nothing else pays.