Any Business Can Get To $100M

Summary

• If you’re aiming for around $100 million, you don’t need to invent something groundbreaking. Simple business models can reach this goal.

• When I talk about $100 million, I mean in terms of Enterprise Value, which is what a business would be worth if I sold it.

• Let's use house cleaning as an example. If a customer pays $400 a month and stays for 2 years, you can calculate the business's value over time using industry averages.

• Industry averages suggest a 20% net profit margin for this kind of business. So, to have a $100 million business, aim for $20 million in profit.

• To get $20 million in profit at a 20% margin, you need $100 million in revenue. That's roughly $8.3 million a month or about $2 million a week.

• Break it down further to understand: $2 million a week equates to about $300,000 a day in revenue. This is how I plan sales and growth based on lifetime value (LTV) and sales velocity.

• For any business model, I work backwards from the desired daily revenue, figuring out how many sales at what price will hit that goal, and then examine margins and revenue multiples.

• This step-by-step method helps me build and assess business models effectively.

Video

How To Take Action

I would suggest implementing a straightforward approach if you're aiming to grow your business or elevate your personal success. First, don’t worry about inventing groundbreaking products. Instead, pick a simple business model. You can reach substantial goals without reinventing the wheel.

A good way to start is by understanding the value of your business. Look at what your business would be worth if sold — that’s what we call Enterprise Value. Break down your sales and revenue goals from there. For instance, decide on a lifetime value (LTV) of your customer. Let’s say they spend $400 a month and usually stay for two years.

Next, aim for a 20% net profit margin. This is an industry average for many businesses. To hit a $100 million value, you'd need around $20 million in profit. To achieve this, establish a target revenue — in this example, $100 million. Work backward to calculate how much you need weekly and daily. For example, $2 million a week means about $300,000 daily.

From here, plan your daily sales targets and ensure your pricing aligns with these goals. Examine your costs to maintain a healthy profit margin. This step-by-step method will help you build and assess your business strategies effectively.

These strategies are not just low-cost but also leverage your existing setup to maximize growth. Keep it simple and stay focused on these core metrics to move toward your target.

Full Transcript

who here would be satisfied with a 100 million or less okay great so then you can more or less toss out all the crazy ideas of like I need to invent a vacuum cleaner that that connects to my phone with a camera and whatever else you just don't need to do that if you said you want to make a hundred billion doar then you have to create the next Google if you want a 100 billion everything like if you want a 100 million any business can pretty much get there and when I say 100 million I mean Enterprise Value if I sell I'll use the simplest I said house cleaning right so if I sell house cleaning and I know the average customer is going to stay with me for 2 years and I would just look up industry stats average customer stays for 2 years and they pay 400 bucks a month great I know the industry averages is 20% net margins and so for me to make a business that's going to be worth $100 million then I need to have something that makes $12 million in profit maybe 15 cuz the multiples aren't as high we want to be safe we'll call it 20 million so 20 million that means that's 20% so I do $100 million in Revenue it's 8.3 per month it's 2ish million bucks a week like okay so I got to make 2 million bucks a week and then divide by 7 300,000 a day and so then you just back in sales velocity to the 300,000 a day on LTV and that's pretty much how I derive almost every business model that I come up with it's just how money I need to sell a day how much are they worth how much total revenue is that going to create what's the margin what's the multiple on that margin and then that's the business