MBA992 Growth You Should Aim for in Year 1 + Free Ride Friday!

Hey there. Today is Free Ride Friday, so make sure you hang on to the end of the episode to hear if you won this week's Free ride. Every Friday we give away a free ride to one of our courses, one of our programs. This month we're giving away easy course, our 30 day course on how to build your own online course in 30 days. It's valid at $500, but we give it away every week to somebody who's left us an itunes rating interview. It's a random draw. All you gotta do is leave us an itunes rating interview to enter that weekly draw and you're in the mix once you've left that review for every week. We announced the free I Friday winner on Friday episodes, so make sure you tune in to listen to see if you won. All right, let's jump into today's episode. Hey O. Welcome to the $100 MBA show, the business podcast that knows you've got no time to waste. That's why we deliver daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher, Oma Mars and home. I'm also the co founder of the $100 MBA, a complete business training and community online. In today's episode, you will learn what type of growth you should aim for in year one of your business. Many of us, when we get started, we're not really sure if we're growing fast enough. Are we doing well? Especially if this is our first business, there's no benchmark. So in today's lesson, I'm going to give you some pointers. I'm going to give you some guidelines to reassure you and also to motivate you to know exactly what type of growth you should be having in year one. Or more specifically, what type of growth you should be happy with. And in all honesty, what type of growth is safe for your business. Yeah, you can grow too fast and there's a lot of stories out there that prove that fast growth can cause a company to implode. More about that in today's lesson. I got a lot to cover, so let's get into it. Let's get down to business. Today's episode of the $100 MBA show is supported by Indiegogo. Looking to bring your idea to life? Well, the experts at Indiegogo can help your idea go from launch to the next big thing. Whether you're in need of a pre launch strategy or looking for manufacturing and shipping support, Indiegogo's experts will be there 247 ready to guide you at every stage of your entrepreneurial journey. Learn more and download Indiegogo's free crowdfunding field guide at www.indiegogo.com 100mba to get started again. That's www.indiegogo.com100mba so you started a new business and you're starting to set up some goals for the growth of your business. We're talking about customer growth, we're talking about revenue growth. This is not an easy task, especially if this is your first business, because you're not really sure how fast you should be growing, as well as the fact there's a lot of anomalies, there's a lot of special cases when it comes to your first year when you're new to the marketplace. And I'll explain what I mean in a moment. But what I want to say to you at the start of this episode, at the start of this lesson is that growth will, without profitability is very dangerous. Let me explain. A lot of people just want to grow and really command the marketplace. They really want to take over the marketplace. Even if that marketplace is your local shop and you want to be the best cafe in your zip code or in your postal code, right? Or in your neighborhood. The point here is, is that a lot of people obsess with having a packed house, having lots of customers, and they'll do anything to be like the big dog in town, to be the big player, to be the Amazon, so to speak, right? But the problem with that is that growth like that is not sustainable. You can't just do that at a thinnamic. It's going to cost you a lot of money and unfortunately, it's going to cost you profits. And I want to go back to the main principle of even starting a business. You want to be profitable, right? You want to make sure that money is left in the bank at the end of the month after all your expenses. Why work so hard if you're not making money, right? Why work so hard if you're not making a healthy income? This is especially important if you're a small business. If you're a solopreneur and you're not a venture backed VC funded company. So the rate of your growth is very, very important. Not to grow too slow, where you don't have enough customers and not too fast, especially in the first year, what you want to do is get out of your first year with some stability where it's like, yes, I'm profitable, I got a good core number of customers, I'm getting some New customers every month and I got my churn down, meaning that my return customers are coming back. They're not canceling or they're not going to my competitors. Now, when you're in your first year, you're still learning the ropes about that business, your business. Even if this is not your first business, you're learning how to really cater to that marketplace and refine your message so you really attract the right customer. So this takes time. And what I found is in that first year, you're going to have some, you know, great moments, you're going to have some peaks. And often when we have, you know, a peak in sales or a peak in growth, we start to think that's the standard. So, for example, let's say I started my online business selling my T shirts in January, and then I got featured in a prominent fashion magazine in March. So sales kind of skyrocketed and my month over month growth in terms of customers or revenue might go up to like 80%. So I made 80% more money or more customers from last month. And I might think, wow, that's awesome growth. And we think we can sustain that for the following month and the month after that. Well, unless you're going to be featured in a major magazine every week or every month, that's going to be really hard to do. You hit a really good peak because you were featured. You got some great marketing, some great publicity, but that's not the norm. That's not something that you created yourself where you can reproduce. Just keep in mind that at first you're gonna get some exposure, you're gonna get some lucky breaks. Sometimes people are gonna appreciate the work you do and that's gonna affect your sales. But you have to be even keel about it. On top of that, when it comes to profitability, you're gonna have a lot of expenses in your first year that you may have not expected. Some issues, some problems, some things are ironing out. This is completely normal. But you have to keep that in mind when it comes to your growth. Now you might be thinking, what kind of percentage of growth am I looking for? Well, obviously there is a wide range of percentage I can give you, and it all depends on your new marketplace, how competitive it is, how much funding you have, you know, kind of head start, your experience, your skills. There's a lot of factors that kind of come into play, but I can give you a percentage that you should be happy with if you're hitting if your month over month growth on average is between 10 to 20% in your first year, that's pretty solid. Again, you're a new business, you're a new brand. It takes time to have, you know, that consistent, large growth. But if you're hitting 20%, think about that. Let's say by month nine, you have a thousand customers. If you're at 20% growth, that means your next month you're doing 1200 customers. That's pretty good. Now, of course, we're factoring in any customers we're losing if we have a subscription business or a membership business. So make sure you factor in Churn when you talk about these percentages. Really, you should be focusing on steady growth, steady, consistent growth. And of course, this growth has to be coupled with profitability. If this is what you're doing in your first year, you should be pretty content. A lot of businesses don't make it out of the first year. A lot of businesses just don't have the funding or just don't have the profitability to be sustainable. So if you're profitable and you're growing at 10, 15, 20% month over month, that's pretty solid. Now, there were moments in our businesses where we had a chance to really explode, whether it was a marketing opportunity or a partnership, and we had to say no. Explosive growth is not always great. You have to be prepared for it, and we weren't prepared for it, and that's why we said no. If you can't take on 5, 10,000 new customers, whether you're a physical store, an online store, whether it's your servers, whether it's your customer service team being able to serve a huge influx of people without adding new reps, whether it's hiring other members of your team to make sure your systems are maintained, it's a recipe for disaster when you just say yes to every single opportunity and not really be mindful of the fact that you know explosive growth without being ready could be the end of your business. People could have a horrible impression. If you have 10,000 new customers come into your business and because you're not ready, they have a horrible experience. Those are 10,000 upset people that are going to talk about that experience and really take your business down, you might have been in a better place before those 10,000 new customers, you might have been growing pretty well at 20%. So just be mindful of that. If you're currently at, let's say, 2,000 customers and you have the opportunity with some sort of partnership to have 10,000 new customers, ask yourself, is your infrastructure, is the team that you have ready to Take on. Right now you have 2,000 customers. That's what you are built for. Most likely you're not built for 10,000 customers, whether it's your technology or your team, because you'd be overpaying for something that you don't need in that first year. I'm sure you're keeping your costs down so you can stay profitable. Now, of course, there's exceptions to these rules. You know, companies like Facebook and Amazon, their whole goal was to just conquer the market, to grow at an incredible rate. But they also had millions upon millions of dollars in funding. They had hundreds of people, experts that were on their side, that are willing to run a loss for years on end so they can have that kind of growth. That's a completely different animal. And those rules don't apply to a small business. And a small business is defined by 500 employees or less. I could be wrong, but I'll take the assumption that if you're listening to this show, you are a small business. So in that first year, your real focus is to make sure you have a great product, a great experience, focus on your customer service so you keep the customers that you actually have that you worked hard to get. And work on a really great ways to build the right customers to get the right customers for your business. Whether it's email marketing, whether it's, you know, with SEO, with blog posts or video or guest posting or guest writing on other publications. Guys, I got more on today's episode, but before that, let me give love to today's sponsor. Support for today's show comes from Microsoft Teams. Microsoft Teams is your hub for teamwork in Office360. Here at the $100 MBA, we run a remote team so we have teammates all across the world. And sometimes communicating can be quite hectic. Organizing everything from chats and emails and files, it can get chaotic. With so much to look after, it would be great just to have everything in one place. And that's what Microsoft Teams does. Teams is a single workplace where you can work, share and connect with the people in your work life. Teams brings together chat, meetings, files and apps all in one place. Take Teamwork, where you work with apps for mobile and desktop. So whether you're sprinting towards a deadline or sharing your next big idea, Teams can help you and your team achieve more. I recently used Teams and I found the user experience to be so simple and clean, I found it like stress reducing. So I tip my hat to Microsoft Teams for building such a easy to use Apple. Microsoft Teams in Office 365. Visit office.com teams to learn more. So there you have it. Year one growth is really important to be steady and consistent. You want to be able to control that growth by the end of year one. Where you say put a little bit more money into marketing. I could see the direct result in sales or customer numbers. I've invested more in my product. I, I could see that I'm keeping more customers. If I invest more in my customer service, I could see that I'm attracting new customers through my pre sales chats or even my customer service is so good that my current customers are telling other customers to come on board. That's your job in your first year is to have steady growth and find out what levers you can really control so you can slowly up that percentage in year two and year three and use your profits to control those levers. Building a successful business takes time. And it doesn't mean that first year is going to be like a crazy struggle and you're going to be like eating bread and water. No, you could have a good life. But what I'm saying is that if you want a business that's going to last a long time, that's going to be a valuable asset for you and your whole team, then you got to build a good foundation with steady growth that you can control. And that's your job in year one. All right, that wraps up today's lesson. But today's episode is not over. It's Free Ride Friday. I got to announce today's free Ride Friday winner. Let's see who won this week's free Ride to easy course or 30 day course on how to build an online course in 30 days. And the winner is. Dolphins Fan 2015. Dolphin Fan 2015 says the best five stars. This is by far one of the best podcasts ever. It's packed with content and I plan on taking all the courses because if the podcast is any indication, the courses will help me live my dream. Well, thanks, Brian. We'll get you started with Ezcourse because you just won it. Your mission is to email me at omar00mba.net so I can hook you up with access to ezcourse, a $500 value. We do this every single week. All you got to do is leave. Leave us an itunes rating and review and you too can win a free ride to one of our courses. Thank you so much for listening to the Hundred Dollar MBA show. I love delivering these lessons every day and it's good to be back. You may have noticed in today's episode, my voice is a little bit off. I've been a bit under the weather for some time, but I had to get back to the mic and the show must go on. I also want to give lots of love and lots of, of respect to my partner in life, my partner in business, the producer of the show, Nicole Baldinu. Nicole stepped in, was the host of the show for a few episodes and she absolutely rocked it. I'll be back like always on Monday and I'll check you then. Take care, Sam.