Are you looking to have a 7 figure business?
There are three kinds of lies: lies, damned lies, and statistics – Benjamin Disraeli
Everyone wants a seven-figure business
Is the seven-figure business your dream? Seen by many as the benchmark of success, hitting these dizzy heights, shows every you have made it! You have joined the ‘success club’
You see people bragging about it in content, all over Facebook, and Instagram. They are telling you that they are living the dream. You get to see their houses and their cars, and they very kindly take you on all of their holidays. They lure you in, and tell you, the most importantly, they can show you how to have one too (for a small fee of course).
Do the numbers lie?
Making “seven figures” is (I am sure) an amazing feeling. However, it is not easy. Getting there requires an enormous amount of work, time and patience. Successful businesses are not born overnight. They take years of expertise, practice, failing, hard work, learning from your mistakes, tweaking processes and stamina!
As an accountant, I have a huge faith in numbers, I know how to read accounts and understand what the numbers are saying. When I hear people talking about their 7-figure launch, when it sounds too good to be true, I can also hear what they are not saying.
When it comes to revenue (sales), there are many ways to count. Is it the number you tell Revenue/Inland Revenue? Is it the amount of cash sales you made? Is it the number of people who have ‘promised’ to buy next week? You see, I want to know what figures are they including? It can be very unclear what these businesses are counting. Often if they have retainer fee’s they include potential earnings to the year end – are they really sales yet?
For your own purposes of planning, I can see why you would include orders placed and retainer income, but, announcing it as earnings right now is a bit deceiving.
Here is a question I ask my clients ‘would you prefer to make €10k profit from €50k sales or €500k?’ The answer is always €50k – because laid out like that, the answer is obvious.
The amount of work, processes and support you need for every additional €100k takes time and business acumen, it really is much easier to focus on profitability and growing profit rather than sales.
Also, just because you made the sales, does not mean you made any profit! Expenses often get out of hand, if you are not keeping an eye on them and no business is immune. There can be huge advertising costs, affiliate cost that can gobble up a lot of your profit.
Know your numbers. Know when you are having a good month, and when you are having a slower month. Know how your numbers compare from year to year. Track your expenses and see where there are leaks. This will help you know when your business is healthy, when you can hire help, when you can buy new equipment, or invest in training. You’ll be able to know what return on investment to expect and most importantly, understand where and how to spend your money. Keeping good books will also makes your tax return so much easier. Seriously.
Common sense goes a long way
If you are seeing advertisements for the 7 or 6 figure businesses and you are thinking – that sounds to good to be true, it probably is. By all means check them out but be skeptical and do not commit to anything on the spot. Give yourself time.
I recently saw a Business Mastermind being advertised on Instagram – it was how to grow your business to earn your first million. The two organisers had done it and they were going to show you. I knew a couple of people that were joining up, so I was curious and looked it up. There was a link to 4 bullet point page and a link to sign up – that was it! All it said was that it was for 6 months at £199 per month so £1994 in total.
There was huge hype around it, so much so, that people were having problems registering there was so much traffic to their site. The organiser was telling people not to panic they did not have a limit on numbers, they would all get in.
Anyway, a week later the organisers fell out and like a house of cards the whole program fell apart.
Panic set it as the company did not have enough policies or systems in place, refunds were promised but not forthcoming, everyone lost out. Chasing money will not make you happy.
Do the basics well!
So where do you go for help if you want to start a business? Personally, I’d give any programme that offered instant success or used envy marketing a wide berth.
Growing your business takes planning. You need to be able to know where you are going before your start your journey. That does not mean, your path is fixed, you will gain new insights into your business the longer you are on your journey and you may end up making some twists and turns to the original goal.
Yet, unless you have a starting point and an end point, your journey will not start.
Do the basics well!
You know I’m all about the cash management and planning. Doing the basics means getting your bookkeeping done – by you or someone else, review and check what is going on in the day to day of your income and spending.
Build the path to the future – plan out your next 3 months and then the next 3 and so on. Check out my blog about Understanding Your Cash.
Join me for my signature talk webinar on Thursday 5th Nov about how to use your Head & Heart in your business and keep more of the money you make.
You can also join me in my Facebook Group, which is a safe space to talk about money and success. Running your own businesses is hard, let me help you on your journey. Contact me here.
I’d love if you shared this article with your business friends or anyone you think may be interested.