What does it take to get to $1 million in PROFIT?
In these series, I talked to 10 of my friends and clients, and asked them what it took for them to get to a million dollars in revenue, a million dollars in profit, and other related questions. In this particular episode, we will focus on a discussion I had with a client who not only hit a million dollars in revenue, a million dollars in profit, but also grew their business to more than $25 million dollars.
What did it take to hit $1 million plus in profit?
This client mentioned just one word as being responsible for his achievement of that milestone- Ambition.
What do we really mean when we talk about ambition? In my personal experience, not many people understand what motivation and ambition means. In my 16+ years as a coach, I have observed that people think that they can hire a coach to pump them up, motivate them, to inspire them. The truth is, that doesn’t really last.
What a coach should be doing is holding you accountable to a certain set of rituals which maintain your forward progress.
When you draw a graph having motivation on one axis and time on another, many people don’t exceed the line showing the minimum threshold to trigger action on their goals. For such people, the goals will remain on paper and they will do nothing about them.
However, other people get motivated beyond that minimum threshold and they go on to act on their goals. These people are unstoppable as they tick off item after item on the list of goals!
Over time, burnout creeps in and your motivation starts dwindling until it eventually crosses the line of the minimum needed motivation for action. Once your motivation drops below this line, you too will stop taking action.
By coincidence, someone or something can again get you fired up and your motivation will shoot up again, thereby getting you to spring into action once more. With time, your motivation could again drop until you are again below the minimum threshold needed for action.
Isn’t that an interesting pattern? It happens over and over again for many people. Research shows this isn’t the best way to do what you do.
Related: Ten Tips On How To Master Your Money
The motivation hype formula
When people think about ambition, they imagine that their motivation will keep going up and never dip. That’s not true. It is natural for your motivation to drop, and there’s a formula we use to help you drive your business to a million dollars or more despite this.
A great coach has the ability to keep you moving forward even in those moments when your motivation drops.
This is the motivation hype formula because coaches hype you up to act each time your motivation dips.
Is there another way other than the motivation hype formula?
Yes, there is a more sustainable way to keep you moving even if your motivation is fluctuating above and below the minimum threshold.
This other way keeps your motivation in tandem with your forward progress. How do we do this?
On the graph referred to earlier, instead of having motivation on the vertical axis, we create for you winning patterns. These are things you commit to do every day regardless of whether you feel like it or not. It’s a commitment. You create a ritual and stick to it.
The race across America
Here’s a story to illustrate the value of winning patterns. There were two people who set off on a race starting at the West Coast of the U.S. and they wanted to see who would cross the country first and reach the East Coast.
One person decided that no matter what, they would cover 25 miles every single day during the race. Interestingly, this person also made a commitment never to exceed the 25 miles a day target, no matter what.
The other person in the race didn’t set such maximum and minimum distances to be covered each day. Instead, he decided that he would travel as far as existing conditions allowed him, and that would give him an advantage over the other person who was pacing their journey.
This second person has a really sporadic journey because some days they would cover a lot of ground, then fail to cover any distance on some days due to exhaustion or bad weather.
Who do you think made it across first? And, how do you try to do it every day? Are you like the first person with a certain periodic target towards the major goal, or you are like the second person who totally crushes it on some days and then does nothing on other days?
What is ambition?
Back to the client I talked to. When he said ambition got him to his first million dollars, we shouldn’t confuse ambition with motivation. Ambition is having an ability to lock in a winning pattern and staying with that pattern so that you maintain forward progress over a long time.
Ambition isn’t sprint, stop, sprint, stop, sprint, and then stop. That’s motivation. Ambition is the ability to keep moving forward in segments of time. It is consistency.
The key is for you to figure out what your daily minimum and maximum progress is for an entire year. This requires math. As Warren Buffett put it, “accounting is the language of business.”
What is the math that you need in order to get from where you are now, to where you want to be at the end of 2021?
Our own example
When I first started out, I worked in the not-for-profit world. I saw a lot of people who really cared, yet they were constantly short of money to do all the good they wanted to do.
On the other hand, there was a group which had lots of money but didn’t care about anyone except themselves. I started thinking that those who cared were good, and those with money were not good.
However, a mentor showed me that it is possible to both care and have tons of money. This happens when you bring the two circles of those who care and those with money. The intersection between those circles has people who do business with a bigger purpose than themselves.
Our companies help people to scale their businesses so that they can have more to do good for humanity.
We have a yearly program of 10 people who meet twice each month to help each other scale up their businesses by sticking to the consistent winning patterns. Currently, six members have signed up and there are four slots to go for the sessions starting in January till the end of the year.
When done consistently, phenomenal results occur. For example, the best member of the 2019 group of ten saw 171% increase in profitability, 195% increase in net profit, and 50% increase in revenue, despite the pandemic! The group members have really done well regardless of the chaos caused by the pandemic, and we are looking for four more people to join us on this program.
If you are interested, send us a direct message or comment “rocket ship 2021” and we will see if it is a fit. We do have a minimum requirement as you need to be making at least $20,000 as monthly revenue before you can be admitted into that group.
How do you move from $1 million to $25 million in profit?
He said compounding. Compound interest is one of the most amazing things in the world. He says he reached $25+ million by relying on compounding and luck.
Actually, there is a study by Harvard University to find out what the biggest reason for business growth was. They discovered three main causes.
First was natural growth in which a company saw their customer base increase, hence making the company grow as well.
Secondly, the release of a new product. The company releases a new product and clients went berserk over that product, thereby propelling the company to grow.
Thirdly, growth through acquisition. A company can buy its competitors or other companies and this caused them to grow as an organization.
Those are the three key drivers of growth among the most successful companies studied by the researchers. However, there was another aspect that they found during that research.
Is your industry growing or declining?
The researchers found that regardless of whether growth was due to natural growth, the launch of a new product/service, or acquisitions, companies could only grow if they were in an industry which was growing. Think about that!
One of the things that we help people in our group to do is to analyze their industry so that they understand at what stage of the evolutionary process their industry is in, the stage at which their business is, and whether it makes sense to put in all the effort needed to take the business where it needs to be.
If your industry is dying, you could put all the effort into your business but still end up with nothing because the industry could completely die. So we need to be in the right industry, at the right time, with the right products and services. If we do this correctly, we are going to see a huge amount of growth.
The importance of recurring revenue
The other thing we look for in our group is recurring revenue. If you remember, our client referred to compounding as helping to grow to $25 million, and that requires recurring revenue.
Imagine if you have to start over each year at zero. This is what most companies do, and no matter how long they have been in the business, they start each year with zero revenue.
How about creating winning patterns which allow you to start each year with some recurring revenue instead of having to build from zero? If you can do this, you can start each subsequent year with a better foundation of recurring revenue upon which you rise to hit higher targets.
How we can help
We have built a process which helps business owners to figure out how to create foundations of recurring revenue. If you make at least $20,000 a month right now, send me a message “rocket ship 2021” and I will show you a little formula here so that we see if ten years from now, instead of starting over at zero, you start from, say, $500,000 in revenue. Wouldn’t that make more sense?
You build something, and then keep compounding on top of it over time. Your business will register huge growth because you don’t start each year at zero.
I hope this is helpful. To take you back, what are the winning patterns and what are your daily minimum and maximum things that you will need to do each day in 2021 to keep you on track to crush the results and outcomes set in your New Year’s resolutions?
If we can, we would love to help you. The goal is not to count on motivation to get you there because you will be motivated on some days and you will not be motivated on other days. The goal is to set up winning patterns which are followed consistently rather than having to rely on inconsistent sprints during your journey.
So, if you are on our website, fill out the little form at the bottom if you would like to join our group of ten. And if your monthly revenue is below $20,000, you too can still fill out the form as we have another smaller group of people who are trying to reach $20,000 a month in revenue. You could join that group, which already has two members.
I hope this has been helpful, talk to you soon!
To Your Success,