By Bill Mulholland
In the cartoon SpongeBob SquarePants, SpongeBob’s miserly boss, Mr. Krabs, is a businessperson operating his own restaurant, the Krusty Krab. Mr. Krabs started his business from scratch, and he proudly frames the first dollar he ever earned on his wall. Like many above-sea businesspeople, Mr. Krabs worked his way from that first dollar bill to become a millionaire.
Outside the context of an underwater cartoon, how do you, a land-dwelling entrepreneur, grow your business from $0.00 to $1,000,000?
Reaching your first million dollars in profit is an exciting milestone all entrepreneurs dream of celebrating one day. Of course, there is no guaranteed way to achieve your first million, but there are some good, basic steps to follow when you are trying to grow your business financially.
Most successful businesses are not planned to become million-dollar business; profitability follows good business sense and a commitment to customers and clients. After that, the first million dollars will come naturally.
Here are five steps for any entrepreneurs seeking their first million dollars in business:
1. Don’t set a financial goal.
This initially sounds counterintuitive, but much like learning to balance on roller skates, the best way to stay upright successfully is not to think about it. If you fixate on reaching a financial goal, you risk losing sight of your business’s original mission.
Stay humble and focus on the objective ahead of you. Whether you are starting your business up from your one bedroom apartment or from a glass conference room in Silicon Valley, always remember what you set out to do with your business.
Align your personal goals with your business’s mission, and the rest will follow.
2. Build and know your customers.
In accordance with the previous step, instead of making your goal a dollar amount, consider setting your goal in terms of customers. By creating a positive experience for the client, word-of-mouth spreads quickly, which in turn brings new customers.
If your business is a small local startup, get customers by reaching out to your neighbors and community members. A study by AYTM Market Research showed that U.S. consumers prefer supporting smaller businesses because they want to help the local economy and they receive personalized service.
Once you set up a client-focused business model, you can retain old customers, draw in new customers, and build up your company’s reputation and profitability.
3. Be the expert in your field.
Expertise is crucial to running your business effectively. Study up on your area of business and earn certifications and qualifications relevant to your field. If you run a plumbing company, follow home renovation blogs and see what homeowners want from their plumbing system.
Stay up to date with the latest trends and get to know what competitors are doing, and what you can do to improve. Sam Walton, the founder of Walmart, would visit his competitors’ stores and pace up and down their aisles, doing a point-by-point comparison to see where he could improve.
It’s important to learn as much as you can. After all, if you are not the expert in your field, who will be?
4. Network and find a partner.
While you are juggling your business and trying to stay afloat–never mind one million dollars–you will want someone who can act as a sounding board and provide the occasional inspirational speech. Pick a friend whose background is comparable to your business’s industry and circumstance so he will best understand your needs.
Especially in the early stages of your company, find someone you can trust, and be sure the vision for your company’s future is clear. Be careful not to solely rely on your partner’s advice though–always trust your gut and know when to follow your own instincts!
Remember step #3: you are the expert in your own business.
5. Hire clever people with skills you need.
It goes without saying that any business is only as good as its people. When your business is just starting, don’t be afraid to be particularly selective with whom you hire. You need employees with the right skillsets to build your business for the future. Great employees are the ones who will spur growth!
It is imperative to hire the right people for the job, because the first few years will define your business further down the road. Although finding the right fit may be more of a commitment in terms of time and resources, good hiring practices are absolutely a worthwhile investment.
Making your first million dollars isn't easy, but when you achieve this tremendous milestone, you will look back on your business’s beginnings and consider just how far you’ve come. Even if you don’t have that first dollar bill framed on your wall, always remember where you started. Whatever you set out to achieve with your company, keep that mission in mind.
It may take decades–or it could take only a few short months–but in truth, your first million dollars are just a side-effect of something even greater: your success as an entrepreneur!
