The 4 Stages of Business Growth 0 100MYr

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The 4 Stages of Business Growth ($0-$100M/Yr)

Summary

  • To grow a business from zero to $1 million, focus on selling one product on one channel. Master a reliable system for acquiring customers.
  • Personal problems can hinder growth in the early stages; dealing with internal issues is essential.
  • Transitioning from $1 million to $10 million requires offering cross-sells and upsells to create a value ladder. Develop a backend with additional services or products your customers naturally need.
  • From $10 million to $30 million involves professionalizing the business with corporate structure, HR, legal, accounting, and IT systems to manage scale and prevent dilution of the company's core mission.
  • At this stage, hiring corporate individuals is necessary, despite entrepreneurs' aversion to bureaucracy, to protect the company and maintain standardized operations.
  • To scale from $30 million to $100 million, foster intrapreneurs within the organization who have entrepreneurial drive but a lower appetite for risk. They should manage new product lines and initiatives.
  • Properly managing expansion and new product lines relies on finding true leaders to run each division.
  • Personal leadership and management skills must improve to attract and manage higher-quality employees.
  • Envelop customers with all their needed services to enhance customer lifetime value (LTV) and make your offerings indispensable.
  • Focus on scaling the operational infrastructure to support growth without sacrificing the entrepreneurial spirit.
  • Avoid hiring entrepreneurs who tend to seek control and could leave with your clients. Instead, employ intrapreneurs who prefer the stability of a paycheck but still possess a strong drive.
  • For those in the zero to $1 million range, concentrate on selling one product through one channel effectively and consistently before considering expansion.
  • Remember, growth is often slow due to the challenge of finding the right people to drive different parts of the business forward.

Video

How To Take Action

I would suggest implementing a straightforward strategy to grow a business, starting with focusing on selling one product through one channel. This helps in mastering the art of customer acquisition, which is crucial for scaling from zero to $1 million. It's important to address any internal issues you may have that could hinder growth at this stage.

To transition from $1 million to $10 million, I recommend developing a value ladder. Introduce cross-sells and upsells that provide natural next steps for your customers. This way, you're adding more value and increasing the lifetime value (LTV) of each customer.

When aiming to scale from $10 million to $30 million, it's about professionalizing your business. You’ll need to set up proper corporate structures, HR, legal, accounting, and IT systems. It might feel like a big shift, but it’s necessary to manage growth effectively and maintain quality.

For those stuck at this level, introducing intrapreneurs who can manage new product lines is key. These individuals have the drive to innovate within a secure environment and can foster growth, taking your business from $30 million to $100 million.

Throughout all this, remember to continually enhance your personal leadership and management skills. Bettering yourself is essential to attracting and managing quality talent that will help propel business growth.

Lastly, make sure your offerings envelop the customer's needs, making your business indispensable to them and boosting LTV significantly. Keep scaling the operational infrastructure while avoiding the trap of diluting the entrepreneurial spirit.

At every stage, resist the lure of shiny new opportunities until you’ve solidly implemented the current phase. That's how to grow without getting overwhelmed or losing focus.

Quotes by Alex Hormozi

"Zero to a million, it's a reliable system of acquiring customers"

– Alex Hormozi

"Getting to 10 is multi-products; cross-sells and upsells"

– Alex Hormozi

– Alex Hormozi

"What you want to do is find intrapreneurs"

– Alex Hormozi

"If I were a perfect leader and a perfect manager I could get everyone to surge forward and be the best"

– Alex Hormozi

Full Transcript

what's going on everyone super excited it's breakdown what we're talking about today which is the kind of four big you know chapters in the growth of a business so zero to a million dollars a year one to ten million dollars a year ten to thirty million dollars a year and then thirty two hundred million dollars plus all right and this was this is now taking me a long time to figure out painstakingly so hopefully uh this will be a value to you it's kind of interesting though because when i learned more about this it's hard to even learn things without having the context and a framework to apply them on right like unless you have a business it's hard to understand all the bottlenecks because none of it's real for you so this will probably be more for the people who have businesses but if you don't have a business then you know please enjoy um that being said zero to a million really really simple it's just one product on one channel very simple all right that means you learn how to figure out how to sell one thing on one channel all right a channel would be like cold email facebook ads instagram ads youtube ads referral partners you know what i mean uh all off of organic you know earned media so all of these are different channels that you can use to acquire customers and the reason people get stuck in like 100 300 ish like range is usually because they still haven't really nailed this it's still haphazard they get clients from here and there but they don't have a reliable system for acquiring customers all right literally that's it zero to a million it's a reliable system of acquiring customers and doing it and most people also get stuck here because they have personal problems like they're they're they're super angry and they hate themselves and they're not good with people that's that type of thing like they a lot of times they have the right system they execute it and then they crash themselves because they have they're you know sleeping with their customers or sleeping with their you know employees just like it's just crazy interpersonal drama is in this range but the business from the business standpoint it's very simple it's just one product on one channel and then you just make the math work so it's not a thousand dollar thing got to sell 100 a month that's it that's all it is at this point though right million ish two million ish a year now mind you these are rough you know sometimes it might be one to three it's just the range here but once you're in that kind of one to three range getting to 10 is an entirely different thing all right getting to 10 is multi-products right now an important note here is that you're not starting multiple businesses right it's going to be cross-sells and upsells all right so that's in another way is creating a value ladder it's creating a it's creating a back end right it's what's the what's the next level of service that we can provide these people what's the next thing they're naturally going to want to need or want and need after buying our initial product right and so thinking through this like it's most people who are in this million dollar range are like man what else should i sell them like you're asking the right question exactly the right question that's what you need to do to get from one to ten all right now from 10 to 30 in mind you uh it's multiple products and uh and depending sometimes it's multiple channels all right um you can you can kind of do it either way either single product on more channels or you can do multiple products on single channel or you can do multiple like that's a little bit wiggle e but i would say the easiest for most people is just focusing on their back end which is the cross cells and upsells what are the things that this person is actually going to need next which is going to increase our ltv so basically what happens is you're selling the same same number of units as before like i was saying let's say you sold 100 people at that at that 1k ltv but then you you you 4x your ltv and all of a sudden or 5x or ltv right this is how it happens you 5×4 ltv and it becomes 5k over the lifespan and now you're at 500 000 a month and then because you're at 500 000 a month you can start going to another channel because you can afford to do it because your ltv's higher so basically what ends up happening is you learn how to cheaply acquire customers on one channel that you're very well suited for right then you extend and expand the ltv of that customer by introducing a backend and then once you have that back in it now opens up other traffic platforms uh or channels that you wouldn't otherwise be able to afford but now that you have a superior backend you can now go broader right that's kind of how it works from a from a business day to day standpoint all right so zero to a million one to ten million all right next line here is 10 to 30 million this is another one where people you know massively screw up uh which is professional design professionalizing the business all right uh and this is honestly really painful and it's it's hard to do and i'm thankful that i had mentors early on that were like this is what you need to do now because i probably wouldn't have said this is the next thing but what ends up happening when you're at like 10 million million a month type you know ranges then like the thing that made you special your special sauce here which may have been a lot of you as the founder um is it starts to get diluted out right and then you have customer complaint and customer support issues and then you know things it's just like you're basically still a really big small business uh at that 10 million like you don't have the systems the infrastructure to build more on top of because it's still like google sheets and and you know and trello boards you know it's just like it's just craziness to try and manage this and so this is where you have to hire some more corporate people and this is you know what every entrepreneur fears more than anything right is that we fear bringing in these corporate suits you know who just gonna suck the life out of you you're like i started this business to not have to do that but you know what every massive business in the world was started by a founder right who probably didn't like that and the reason big businesses run like business big businesses is because it's the only way to run big businesses like you have you have to have corporate structure you have structure you have to have hierarchy you have to have you have to have hr you have to have you have to have these things in place so that employees feel more comfortable but also so that you're you're protected from a liability standpoint right uh because honestly once you get into this range you become a target right this is where lawsuits start coming in this is where lawyers and contracts start mattering and all of this stuff right um and so professionalizing the business especially from hr legal and accounting standpoint comes here and then the it systems all right so this is really like really strengthening the ops of the business the operational infrastructure because what this does is that it makes all of these things that we learned how to upsell before it really makes them methodical right it becomes people get the same product every time same product every time and so then client happiness goes back up and things are good now the problem is the people who come in at this 30 million a year you know are getting from 10 to 30 is that they're not innovative at all if anything they stifle innovation because they want things to go through a certain way and then they just they you know you want to choke them to death um but you have to do it all right but the thing is is that if you go these are all like pendulums right if you go too far in that direction then you lose the creative energy and the drive of the business uh because you kind of have these suits that are trying to control everything all right and so this is the gap that i have struggled to make is going from 30 million plus to two to a hundred million dollars a year and so i'll share what the mentors that have shared this with me um hopefully it'll be useful for you but yeah i mean we've been we did 28 37 32 i think the last three years uh so we've just really been stuck at this level and it's because of this last piece right because the thing that made us right was frankly was was me and the entrepreneurials like drive and i'm not saying i'm the sole responsibility obviously our team's amazing and they're the reason this works but it's saying like what's the you know what's the soul right and so what ends up having to happen is that at this level you actually have to have more souls you have to have more people with the juju right more people who can drive growth who can take initiative and seize opportunities right and so this is kind of the entrepreneur versus the intrapreneur dilemma and i'll break this down for you so an entrepreneur is somebody who wants has entrepreneurial tendencies within within a corporate structure right um an entrepreneur wants to own their own thing and i have made horrible mistakes so many times um hiring entrepreneurs and treating them like entrepreneurs when in reality i should have just never hired them right um because they're going to tell you no i you know what i had a business before i don't have any interest in doing that and so you really have two kind of two outcomes that happen here either have the entrepreneur who comes into your business lost their juju right and now just sits in your business and continue complains about how they're not getting paid as much as they could make on their own but they can't make it on their own which is why they're with your business right or the person is right and can make more on their own and so they come into your business basically regain their confidence start doing well and then take as much of that business with you as they possibly can and so either way the outcome's poor and so i had to learn that one the hard way multiple times in our business which is don't hire entrepreneurs all right what you want to do is find entrepreneurs all right these are people who um really prefer they love the entrepreneurial drive of like driving growth driving change taking initiatives building out new things innovating right um but they don't have the same appetite for risk right and so because of that they like having this kind of safe place to go experiment and do all this stuff but they still know they're going to get a paycheck every month now that paycheck's variable but even if they you know suck they're still going to get paid or paid well right and so this is what i have i've been trying to you know imbue into our business right now and it is working um is is putting on intrapreneurs in places where they can drive change because if you really think about it what ends up happening is that your business becomes a conglomeration of smaller sub-businesses right if you listen to jeff bezos talk about his directors she actually calls them ceos he's like oh that's ceo of that business that's ceo of that business but they're all within amazon right but they're kind of sub ceos and this is the thing is like you need you can only provide so much willpower and spirit to a business once it gets to this size because there's just so many people that you just get deluded like your spirit your care your drive your vision just get diluted throughout an organization and so you need you need heads that can kind of reinvigorate the business and drive new uh innovations and so what ends up happening is the way this the structure looks like and the way it shifts to i'll show you real quick [Applause] is it shifts to something like this all right so you've got your your core here right which is the the operational infrastructure that we put in place from 10 to 30 million so this is your um this is your your hr right legal uh i.t finance right that's your that's your core all right that's the core ops of the business that has to happen or everyone goes to jail right people need to get paid you need to pay taxes contracts need to be signed you know crms i'd see all that kind of stuff right and then what ends up happening is that off of that spoke right you have profit centers right and inside of a profit center you're going to have product and you're going to have acquisition all right so acquisitions marketing sales and then product right and so inside of these these are all identical right product acquisition right product acquisition you get the idea right and so each of these become profit centers right for the business and so these things can all roll into you while this all rolls into someone else right from a from an operational standpoint but this is really how the business would function right and so this is where you might have you know product line you know number one right product line number two product line number three right and each of these are going to satisfy needs for the customer ideally when you're enumerating these product lines is you want to use the existing resources that you have and capital and infrastructure to create products that are similar but different right so for example if i were if i were like because obviously we have a coaching business uh for gyms so if i were you know expanding pro like uh services then what's one of the things that we we've added in so we we added in um uh we call it a boiler room so this is something like a lot of a lot of our gyms were asking for more help with sales and so we're like well how about we just train you guys like we train our team like our team drills every morning we do boiler room that's how that's how all of our guys start our day so why don't all of you just if you want this additional service because not everyone wants it you can pay a little extra for it and then you can bring all your sales team and we can drill your sales team and so they get pumped up and the nice thing is something like that just shows such clear roi um to a business that it's like oh my god i would never stop paying for this so it's really sticky right and it's high margin so it works it literally works for everyone right and so it's like we have our core like let's fix your business service and with the existing resources we have which is these are the skill sets and the individuals that we have that work for us we know that we could create this product line and i'm calling a product line but service line um with little investment right we don't have to do a ton of stuff there right whereas when i started the supplement company that was a huge undertaking that probably wasn't the wisest decision i i was fortunate that we were able to maneuver it and now it's a very very healthy business but it took i mean but it was very hard and i probably shouldn't have done it in that order right i should have thought like okay well they also want um someone to run their ads for them so that's going to be our done free agency side so we're going to add that in right and again each of these like this hopefully this makes sense to you delineating these things it's like these are all types of services that a customer who comes in would naturally also want in addition and these can be upsells that will increase the ltv the customer while also making your own your own service stickier and helping them basically you want to you want to envelope the customer with all the things that they want that being said you have to have the operational know how to do this and this is where people get screwed up all right is that when they create these product lines they start trying to manage both and then they start trying to manage all three and then and then they start another business and then it gets even crazier right and so this is where people massively screw up and so until you have a true leader and i'm saying a true leader this person has to be as smart as you are all right running a new product division i would not recommend doing it which is why business growth is slow because it's all about the people like that's the hard part every entrepreneur's biggest problem is they can't find good people it's the hardest problem in the world and it's also because we need to be better people to attract better people and also manage better people because if you think about it if i were an omnipotent being if i were god right i could probably perfectly manage everyone to become an a player so that's a belief that i try and use it's like if i were a perfect leader and a perfect manager i could get everyone to you know surge forward and and and be the best right but i am an imperfect leader and i'm an imperfect manager and so i have to find people that have a little bit of battery included uh to get the result that we're looking for so hopefully this makes sense in terms of how you structure the business and how it scales you know at this point this would be like your zero to zero to a million would be here you go zero to ten million maybe with product line one or product line two added in right which then allows you to scale your acquisition so acquisition goes up on each of these things because the total ltb is higher and so this is ultimately how the business scales all right so quick recruit for everyone if you're zero to a million you don't need to worry about anything you gotta sell one product and one channel that's it you gotta get good enough at it that you can do it repeatedly in your sleep once you have that then you're like okay we got this unlocked now we can sell multiple products these people so i need to find somebody who's good put them in charge of this help them build out a product line that is an entrepreneur not an entrepreneur um and and then we'll cross-sell them into this additional service or or product line that doesn't require a ton of capital investment what else could we provide these people that they have been asking for right from 10 to 30 million it's like all right now we need i.t we need legal we need hr we need compliance we need all of this other crap because you become a target straight up you become a target in the business all right and so um you professionalize the business but you can't lose the entrepreneurial spirit and to not lose the entrepreneurial spirit is when you hire entrepreneurs and then you put them in chartered product lines all put around the central spoke of the infrastructure for operations so hopefully that makes sense hopefully that valuable if you're in the zero to 1 million range then just don't get distracted with shiny objects focus on one product on one channel it's all you need to do keep being awesome i'll catch you guys soon bye

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