30 Apr 10 Simple Steps to Build a $5 Million Business
In this series of posts, Influencers and members share their advice for entrepreneurs. Read all the posts here and write your own (use the hashtag #mystartupstory in the body of your post), or upload a SlideShare.
Building a business is no easy feat. As a two-time entrepreneur, I’ve experienced the ups and downs of building a company and culture. Aside from my children, however, there is nothing I’m prouder of than the two great companies we’ve built: Likeable Media and Likeable Local. As we celebrate Small Business Saturday, here are 10 simple steps I took to build our first company, and a blueprint you can use to build a business of your own:
1. Find a Trustworthy Partner
In my early 20s, I was working in sales at Radio Disney. I was the No. 1 sales person in the country until this woman came into my office and dropped me to No. 2 in just four months. I was shocked and stunned by her talent and I realized two things: a) I needed to marry her and b) I needed to go into business with her.
In 2007, as we planned our wedding, we realized we couldn’t afford the large NYC wedding we both wanted, so we devised a marketing plan. In July 2007, Carrie and I had an entirely sponsored wedding at a baseball stadium in front of 200 friends and family and 5,000 strangers. We raised $20,000 for charity and $20M in earned media. Everyone was thrilled with the outcome and when our wedding vendors asked us what was next, we thought: “We can’t get married again, so let’s start a company instead.”
While not everyone can start a business with their husband or wife, it really helps to have a truster partner to be #inittogether with. For my second business, for instance, I partnered with my friend of three decades to build our product. Who can you partner with?
2. Create a Strategy and Singular Focus
If you asked me what we did early on in our first business, I’d have told you, ‘What do you need done?” And if you’d asked me how much we charged, I’d have said, “What’s your budget?” While this may have worked early on to help generate revenue, it wasn’t sustainable. Ultimately, too many businesses fail because they don’t have a sound strategy and focus.
I’ve been using Verne Harnish’s one-page strategic plan for both of our businesses. Our management teams meet quarterly to plan the strategy, and believe it or not, thanks to Verne’s tool, we summarize the entire business plan and strategy on just one sheet of paper.
3. Say No to What’s Off Focus
It’s easier to create and plan a strategy and focus than it is to stick to it. But if you’re going to be successful, it’s not just important to say “Yes” to the right things, it’s important to say “No” to the wrong things.
A major turning point in our first business was when we fired Charlie. Charlie was a Greek restaurant owner in Astoria, Queens. A super nice guy, Charlie had us helping promote his restaurant and their special events. But he could only afford to pay us $500 a month — and I knew we couldn’t scale our business if we kept working with people like Charlie. So we fired our own client — and then focused on landing bigger clients who could better help us grow. It’s really hard to say no — but essential, if you’re going to really grow your small business.
4. Find Peer Support
It’s lonely at the top. Seriously, running a business is one the loneliest jobs out there, even if you have a great partner. Nobody really understands what you’re going though. A huge part of our going from $1 million in revenue to $5 million in revenue in three years was my joining Entrepreneurs Organization (EO) in 2010. EO is the world’s largest peer-to-peer network of CEOs, and it’s most important element is monthly meetings with a small group of fellow entrepreneurs called Forum. My Forum of six people has become one of the most important resources in my business and life, my closest friends, and a great support system.
EO isn’t the only game in town though. Here are five great small business peer-to-peer organizations for entrepreneurs to consider, including BNI, Vistage, YPO and YEC.
5. Form a Board of Advisors
You can’t possibly know it all, and even with a great partner and great peers, you can use help in growing your business. While it’s great to have friends and mentors who can help you, I recommend you codify your mentors through the creation of a Board of Advisors.
In 2012, we asked longtime friends and mentors with a wide variety of experience and talent across various focus areas: finance, law, marketing, brand management, and sales. We formed the Likeable Advisory Board and instantly had a group of 11 advisors who we could call on anytime and who met with us formally four times a year to help us grow our business.
We all have friends and mentors with more experience than we have — by forming a Board you can better tap into that experience.
6. Hire Slow. Fire Fast.
“Dave,” said my erstwhile employee of a sales manager I once had, “I don’t care if the guy is putting up big numbers. The guy is doing cocaine in the bathroom with his team.”
When I think back to the biggest mistakes I’ve made as an entrepreneur, they all revolve around hiring the wrong people, or worse yet, keeping the wrong people for longer than they should be around. The employee in the example above, I let go just after that conversation — but it was probably two months after the point at which I should have let him go.
What happens often is, we move too quickly to hire someone and end up hiring the wrong person for the wrong position. Then, even though our intuition tells us we’ve hired the wrong person, we don’t want to accept that fact, so we keep trying to justify the decision, coach that person to success, and/or move him to a new position. This is often more damaging than hiring the wrong person in the first place! The solution? Hire slow, fire fast.
7. Build Great Values and Culture
You and your employees spend more awake time at work than you spend anywhere else, including at home and with your family. So the core values you have and the culture you cultivate at work is absolutely essential to your success and happiness.
We took great care with both of our companies to create core values that would resonate: Amongst them, for Likeable Media: transparency, accountability, and passion; for Likeable Local: obsession for customer success, drive, and continuous improvement. We’ve also worked tirelessly to build culture: retreats out of the office, social events, unique benefits like on-site manicures and massages. The results: Likeable Media has been named to the Crain’s Best Place to Work in NYC for three straight years — and continues to attract the best and brightest people in New York.
8. Build Your Brand
The world of the mobile internet and social media has made it easier than ever before for a small business is “act and look big.” One of our first decisions in business seven years ago was to publish a daily blog. A couple of years later, we had one the most well-read blogs in social media marketing — and that blog didn’t just build our brand — it kept generating lots of leads!
Today, whether it’s on your blog, on Facebook, Twitter or LinkedIn, through online video or pictures, or articles or whitepapers, you have an ability to constantly build your brand — to make your business more credible, more trusted, and more accessible to your customers and prospects. Social media is the great equalizer when it comes to building your brand, and you have a greater opportunity than ever before to make your small business brand BIG!
9. Ask for Referrals
It was late 2011, and we’d hit a wall. New customers weren’t banging down our doorstep, and for the first time ever in business, my wife and I were questioning whether we could continue rapid growth.Then, one of our advisors said, “Have you asked all of your current customers for referrals?”
It seemed so obvious, like so many good ideas after the fact. So we went ahead and asked, and the next thing we knew, we had filled up our pipeline again with strong prospects, that would lead to new closed business and continued rapid growth. The best form of marketing has been and will always be referrals from your current customers, because if you’re doing a good job, they’ll want to help. You won’t have a chance unless you ask.
10. It’s the People, Stupid
Likeable Media and Likeable Local would be absolutely nowhere without our employees, partners, and advisors. Five of the nine steps above involve people. The reality is, your job as an entrepreneur and leader is just three-fold: set the vision and strategy, make sure there’s enough money in the bank to make payroll, and get the right people in the right seats on the bus. The people you hire and fire, partner with or don’t partner with, take advice from or choose not to take advice from — these people will make the difference between success and failure. These people will help you go from 0 to $500K, or 0 to $5 million, or even from 0 to $500 million.
Your people ARE your business. Your people are your future success. Your people are your everything. Now go out there, get some great people together and build that #smallbusiness of your dreams.
This Small Business Saturday, join my team from Likeable Local in celebrating small businesses everywhere. I hope these tips inspire and empower small business owners everywhere to take their businesses to the the next level.
Now it’s your turn: What are your secrets to success in business? What steps have you followed? What am I missing? Please let me know your thoughts in the comments section below, and please do share with this post with your network to help inspire as many small businesses as we can.