What's the difference between $250k and $1M in Revenue?

I had someone ask me how did I get a business to $1M in revenue and I thought there was some things in that convo that I could share in this group. When I was first starting out, the thought of a $1M business seemed so crazy to me. Most my life I didn't even have a savings account, what would $1M feel like? Would I have 30 employees? Do I just get invited on to every business podcast and every glaze me for my wisdom? 

The reality is a lot different. Is a million dollar business an achievement? Absolutely. Only 25% of construction businesses get there. But there's definitely some things to keep in mind. 

1. Revenue is for vanity, profit is for sanity. It doesn't matter what your revenue is. I had met a guy doing $3M and he was at 2% net profit and I was thinking I was thinking I was so smart then the next year I did $700k and made negative net profit on the year
2. You become more leveraged. You can run a very tight budget but the fact of the matter is you'll need a shop (you have to personally guarantee that), maybe you get some equipment, and your monthly expenses get higher. Not a big deal but it definitely adds pressure.
3. You get more of a target on your back from bad actors. Your risk profile increases. Last year I had a guy "pull his back" on the 2nd week on the job, almost lost my workers comp over it.
4. Your threshold for making the same amount as a solo operator becomes higher. As a solo carpenter, you can easily make $100k per year with low overhead probably get closer to $200k if your smart and good at your craft, but to make that same amount of money with employees, you have to have a way higher top line revenue. 50% goes to direct costs, 20-30% to overhead. Then if you're smart your reinvesting profits so your not really pulling the same kind of cash

So why even get to the seven figure mark or beyond?

Well obviously we all want our time back and that'd be your ticket. You also get the opportunity to affect more people's live positively. Those are some big ones

So how do you get there?

1. You don't do this without good people. Hire slow, fire fast and be good at recruiting. Always be recruiting. In my business, my coworkers can produce $150k-250k per year so you do the math. You need like 4 of them to make a million bucks. (BTW jobber has a system to track employee productivity FYI)
2. You need to know your numbers. You need a firm grasp on what your hourly rate needs to be for you to grow. You need to have a good bookkeeper (DO NOT do your books yourself). You need to have goals. Start with the stuff jobber tracks. Keep it easy and you will track it. Make it complicated and you won't.
3. Don't be so hungry for more money that you become difficult to work with. Should people pay their invoices on time? yes. But you can't shake people down for money. Always be professional and have systems in place in case you have to place a lien or something. This also means double checking customers are stoked on your work before you send the invoice. This is a must. Don't be cheap with your folks either. ALWAYS PAY ON TIME SO MATTER WHAT. Paying your people is probably the most important thing in my opinion. Always do it on time. If you promise someone something, pay it and don't make them ask for it. 
4. Value your own education early on over hiring someone to do something. Consultants can suck the fuel right out of your fire and most the times they just give you more stuff to do. If you're going to pay for something, they better be the one executing but things like marketing you should be doing yourself early on. Learn what it means to market effectively. Learn how to read a P&L. Don't use the excuse of I don't know how to not learn. If you're in this game, you need to learn how to play.

 

Annnnd just like that you'll be a millionaire! Just kidding - we did $1.2 last year and I still rent. haha  But if you want to grow your business you have to do the fundamentals. And honestly, if you're making good money to save, you have time for your family, and your just working on your own. That's pretty awesome also.