How Fast Can a Business Grow?
August 22, 2007

The promise behind Seven Years to Seven Figures - that you can create a seven-figure net work in seven years or less - has been challenged by some of the people who have read the book as unrealistic.

I don't think it is. And every time I help somebody start a new business, it seems to work out that way. The last business I started, for example, was in February of last year. The first month's income was $4,249. In the 6 months that followed, the monthly income jumped to $18,853 and then to $35,753 three months later and then to $95,611 by the following January and then $223,000 by April and $260,000 last July.

By the end of its second year that business will have more than $4 million in revenues with a gross profit margin of more than 15%.

Based on past experiences, I expect that business to double at the end of its third year and then double again - to $16 million - by the end of five years. It could do better than that.

Why is this business having so much success?

Because the guy who is running it is smart and hard working. And because he listens to my good advice. During the first 12 months he focused primarily on building a file of 10,000 email customers. That's the goal I set for him when we began. I told him that 10,000 would give him about a million dollars in cash flow - that wouldn't make him profitable, but it would be enough to pay for the development of new products and the employees he needed to do so.

He kept trying new things - products and promotions that would sell on the front end. After about nine months, he struck on something. The company took a big jump then. From about $50,000 a month to double that.

After that he was able to hire some new people and start testing more products, back-end products as well as front-end ones. The result was a steady increase in revenues.

The nice thing is that he is over the hump now. He has the three things you need to get over the hump: 1) a base of loyal customers, 2) a business structure that allows him to test lots of new product ideas and 3) the marketing ability to sell them.

posted by M. Masterson @ 2:27 PM,

2 Comments:

At 3:28 PM, Blogger T.C. said...

It seems "the three things you need to get over the hump" are listed in reverse chronological order. Is not marketing ability 80% of what makes any product or service successful, by whose promoting a new idea (which, of course, assumes appropriate market research was done) leads to building a base of loyal customers (or further expanding it)?

Tom Chechatka
Treasure Landing "My Power Mall"

 
At 10:00 AM, Anonymous K. Pujol said...

I have found "Seven Years to Seven Figures" to be an extremely helpful book. One of the most important features in the book was the chapter that dealt with what certain income levels "look like." We are surrounded by people who live way above their income levels. It was helpful to see that we were on track at our current income level, and to have a visual aid with which to compare our improvement.

 

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