Mike Andes calls the $200k-$500k revenue range the "wilderness," where owners get stuck handling sales and admin instead of generating revenue. Profitability stalls at solo-operator levels. The fix: build a team for sales, admin, and management to break through.
For most businesses, I see what I call the wilderness when it comes to revenue. If you're trying to grow your business from zero all the way to a million dollars in annual revenue, a lot of times you'll hit this wilderness between 200,000 and $500,000 approximately. At this size of business in annual revenue, you usually don't make a whole lot more profit than you did back here. Between 100 and 200,000 in annual revenue. Why is that? Because over here you are doing the labor yourself and you are actually producing revenue. And as you grow to the wilderness, you have to start doing sales and admin and you actually start becoming an overhead cost to the business. Over here is where a lot of people retreat back to when they start their business. They get 1, 2, 3 crews and they realize they're not making any more money in the wilderness compared to when they were by themselves as a solo operator. And that's the reason most people will retreat back to being a solo operator. My suggestion for most people is to get through the wilderness as fast as possible so that over here they can make more money and have help on the management, admin and sales side of things.
