Phil Risher tells home-service business owners that revenue is a vanity metric. A $7 million company stayed flat for three years because the owner was the only salesperson. The fix: performance-based pay and a dedicated sales director so the whole team drives growth.
We've all heard revenue is for vanity, profit is for sanity, and the revenue number, you could be proud of that. But if you're the only one responsible for generating revenue inside of your business, it could be a trap. What we see working with $1 million to $10 million home service businesses is that around the $5 to $10 million mark, if you as the owner are the only one that's driving revenue in your business and you feel like a puppet master trying to architect growth inside of your business, it's probably because you're the only one that's driving revenue forward. We had a company that we work with, $7 million business. He had been stuck there for 3 years. And the problem is that no one on his team was on performance pay. He didn't have a sales director. He didn't have someone that was responsible for actually growth in the business. He was just trying to manufacture it and pull this company along to $10 million. The problem is that when you're trying to pull people along, you're not leading them. More importantly, you're not building a game or a system that incentivizes them to help you grow. And when you put in performance pay, or you build a dream outcome for people on your team that they can make money when you make money, then whole squad eats, everyone wins. That's what you should be doing today.
