How do you build a business that makes a million dollars per year? This question is one of those unicorn questions. One of those questions that we talk about all the time and entrepreneurial communities and mastermind groups.

Everyone wants to know, how do I make a million dollars a year in my business? Well, we're going to talk about it today. We're actually going to dive pretty deep on exactly how to build a business that makes a million dollars a year today. I'm excited to share my personal insights and my journey doing exactly that.

I'm also really excited to share all the other important aspects of that journey. Because the truth is, if you're just focused on making money in your business, you're actually far less likely to make a million dollars per year. If that happens to be your goal. 

truly successful businesses are about so much more than making money. But really if making a lot of money is of a high priority to you in your business, there are a whole lot of other aspects that need to be just as important to you, for you to find the right business and the right way to go about running that business to actually make that high level of income.

So let's dive in and let's truly discuss what it takes to build a business that makes a million dollars in profit per year.

Now, first things first, I want you to notice what I just did there. I added another word there right at the end before I said let's dive in. I added the word profit. What I want to discuss today is how to build a business that makes a million dollars a year in profit. Net profit to be specific. And the reason that I feel compelled to bring that up is because Is all over social media, the internet, just the ecosphere.

These days, there are so many people out there trying to teach you what it takes to build a seven figure business. You've probably heard the term seven figure business more than you can probably stand at this point, just in your exploration of your entrepreneurial journey. It's one of the most like common phrases that we use nowadays.

I've built multiple seven figure businesses like all that type of stuff. What I want to talk about today is how to build a business that makes a million dollars a year in net profit because I have been fortunate enough to do so. I have no problem saying that. I've worked really, really, really hard. I've partnered with some really amazing people and together with some of the most talented and awesome people I've ever met in my entire life.

We've built businesses that have been fortunate enough to achieve a million dollars in net profit per year But I really want to make that clear Because there are many ways to measure what you could call a million dollar business. For example, the first business that we built that made a million dollars in net profit per year also had some other key numbers in it that we could have used to say that they were million dollar businesses long before they were actually making a million dollars in net profit.

Our first sales business, when we made our first million dollar year in net profit, we actually had 152 million in sales volume. We had a little over 3. 8 million in revenue, 27 percent profit margin, which equals a million dollars a year and net profit.

But long before. We had a million dollars in net profit. We were still doing 50, 60 million in sales volume. We were still doing 1. 5 to 2. 5 million in revenue. We just hadn't hit a million dollars in net profit. And so I've never felt good about saying that I run a million dollar seven figure business, whatever it is.

Unless that business actually generates seven figures in net profits per year, 

it's an important distinction and I don't mean it to be negative. It's just the truth is there are so many entrepreneurs out there these days that they are in the business of selling programs, of selling courses, of selling coaching, and their, their guise is that they're going to teach you how to build a seven million dollar business.

Figure business,  and that doesn't mean that there isn't value in what they're bringing to the table and that there isn't merit in what they're teaching you.

However, I believe that it is a bit deceptive to throw the term seven figures around when that number could relate to a measurement of several different KPIs in your business.

And a lot of those KPIs don't mean that you actually make money at the end of the day. I will give you a great example. I run another, what could be called seven figure business right now. You have several companies that we run. And at one point in time in this particular home services business, we were generating well over 200, 000 in sales per month in customer paid invoices per month.

But in the early days, we really kind of rushed into that business. We didn't have our systems figured out the way that I would have liked. We hadn't figured out the nuances of the model just yet, and in the early days, we actually took quite a big loss. We started out the first six months of the business, about a hundred thousand dollars in the whole, and we had to claw our way out of it even though we were doing 150 to $250,000 a month in invoicing, we were losing.

Money. And so I could have told everybody back then that I was running a multiple seven figure business because we were on the road to generating about 2. 4, 2. 5 million in revenue per year. But at the pace that we were going, we would have lost money. And if I was to build some sort of community or course or some sort of offering where I'm teaching people how to build a seven figure business, what I would have been teaching them at the time is how to go bankrupt because we weren't running the company very well.

And so I encourage you if you're going to go down a path where you are gaining insight or mentorship from someone who is teaching you how to build a seven figure quote unquote business. 

I would just simply ask to what KPI does that seven figure number correspond? Is it seven figures in revenue, seven figures in sales or seven figures in net profits per year? I want to talk today about how I built a business along with some amazing partners.

that generated seven figures in net profits per year. 

And if you're considering aligning with a mentor that is going to teach you how to build a seven figure business, I would want to know more about what the profitability of that business looks like before I go down that rabbit hole, just for my own peace of mind so that I know that I'm aligning with somebody who's truly successful at what they do, not just successful at one aspect of it, which is either generating sales or revenue.



This is going to be really important later when we discuss numbers and kind of the nuts and bolts of things. But just something I wanted to put out there up front as a bit of a disclaimer.

Okay, so now that that's out of the way, let's really dive in. Where do we start talking about how to build a million dollar net profit business? Well, I mentioned some numbers before, and I want to lay the groundwork for how we're going to get from wherever you are right now, but let's assume that you're starting at zero to a million dollars in net profit.

The first I mentioned before was that when we first hit our first million dollar net profit year, we actually had 3. 8 million in change in revenue, in actual money in the door. That's an important number to consider because that means we ran at about a 27 or so percent profit margin, meaning of all of the revenue that regenerated and brought in.

We only made and kept about 27 percent of that money in the form of net profits. 

That means that of every single dollar we brought in, 73 cents went right back out the door in the form of expenses or costs of goods sold. So the reason that I mention that is because a lot of us have aspirations to go build a business and makes a million dollars a year. And that's awesome. It's an amazing journey to be able to do something like that, especially when it's a business that you love and that touches and helps a lot of people.

I just want you to keep that in mind as a frame of reference, because when you look at the numbers of building a business like that, if you're only keeping 27 cents or so from every single dollar, you're going to need a lot of money to run the business, which means you're going to have to scale up.

There's nothing wrong with that. You can actually do it quite quickly. Just want you to understand that starting a million dollar net profit business. Takes a few things. It takes scale, it takes time, it takes capital, it takes reinvesting into the business, and you can do those things quite quickly, but we want to have some landmarks, some milestones along the way that we're trying to hit.

That are going to culminate in us netting a million dollars. I'm actually looking at our P and L from the year that we first made a million dollars in net profit in our real estate sales business, which is the first business that we made a million dollars and net profit in that year. We made 3, 888, 312 and 99 cents.

Which bugs me. In revenue, our cost of goods sold, which is a very important number, is 2, 464, 431. 36. And then We had about 424, 000, 151. 36 in overhead, actual expenses, real estate sales, businesses carry very large costs of goods sold, and we had relatively high expenses that year. So that netted us just over a million dollars.

And net profit that year. But in order for me to get there, I've got to be able to spend like 425, 000 in cash every single year. And I've got to be okay with about a 2. 5 million cost of goods sold, which means money that never gets realized as revenue before I can hit that million dollars in net profit.

That's not every business. Obviously by the way, but that means that I need to scale up this exact same business. Three years earlier, ran at about a 5, 000 a month, monthly budget. 

When we first started that business, we had three people in the business total. We actually ran off a budget of a little less than 5, 000 a month, and we managed our expenses incredibly meticulously, and we reinvested back into the business. We made our first million dollars in net profit three years later.

So you can see how taking a business that you're spending less than 5, 000 a month on and reinvesting and scaling can make you a million dollars in net profit in a relatively short amount of time. But you need to have some really fundamental principles in place in a roadmap on how you're going to get there in order to realize that.

That's what we're going to talk about today. But I just want you to have that understanding that to build a million dollar net profit business, you need to have a roadmap on how you're going to get there, but you also need to have a roadmap on how you're going to get to every step along the way, Because what you're doing right now in the beginning is.

is not going to look nearly the same as what you're doing two or three years later. And until you knock out those short term milestones, you're never going to get to where you're making a million dollars. It's just as important to focus on how to make your first 50, 000 and then your first 100, 000.

And As it is to make your first million dollars, because I promise you, once you get past making enough money to support your lifestyle comfortably and to reinvest back into what's working in your business, getting to a million dollars in net profit is much easier than starting from zero and trying to figure out how to make your first, say, 100, 000 doing that's actually really hard going from 100 to 200, 000 gets a little bit easier.

Going from 500, 000 to a million dollars in net profit is actually exponentially easier than going from zero to 100, 000. So I want you to have that frame of mind because what we're going to talk about, how you get started is the most meaningful aspect of all of this.



So there are really five key steps in building a business that makes a million dollars in net profit per year, and we're going to go through every single one of them in quite a bit of detail because my goal with this conversation is that when we're done here today you have a much higher level of clarity on exactly what you need to go do right now in order to start that journey.

I don't want this to just be some sort of hypothetical theoretical thing for you. I want to leave you knowing exactly what you're going to do right after this. So let's talk about all five of these steps. Step number one, make sure that you're getting in to the right business. And I know that that sounds kind of cliche and silly, but it's actually the most important thing that you can do on your journey to actually making a million dollars from your business.

Is to make sure that you're in the right business in the first place. 

Being in the right business is crucial because the journey from zero to million in net profit comes with a whole bunch of stuff that you're not always going to be psyched to do every single day You're gonna have to grind it out. You're gonna have to summon That motivation, you're going to have to use your willpower to get up and do things even when you don't feel like doing them, you're gonna have to do the little things right.

You're going to be consistent every single day. And the reason that it's so important to choose the right business is because When you're in the right business, when you're passionate about what you're doing, you need less willpower to go do those things that you otherwise wouldn't do. Those things that other people won't do.

The things that set you apart as an entrepreneur. The things that you need to be consistent about. You need less willpower to go do things that you're passionate about than you do to do things that you're not passionate about. So you need to be in a business that you're actually passionate about building.

And I want to dive a little bit deeper on this because there's a difference between being passionate about what the business does and being passionate about building the business itself. I actually have a few businesses that we've built, my partners and I, That I'm not necessarily passionate about the business itself.

I'm not passionate about the industry or the space necessarily, but I'm passionate about what the business does. And I am passionate about the opportunity to do it better. For example, we have another real estate business that is adjacent to our sales team that is a management business I'm not particularly passionate about the management business in the real estate space What I am passionate about is building Businesses that serve a need and they do it at a much higher level than the industry standard is currently doing it Currently, most management companies in this space are subpar.

They are spinoffs of real estate sales businesses. They have low ceilings of quality. It's not an industry that demands high standards of its operators, and it's an incredibly important function in the industry. We need better management companies. We need a higher standard for the quality of service that these companies provide.

And I'm passionate about bringing that higher level of quality, that higher standard of service. And so that's what we strive for in that management company. I'm not really passionate about the day to day. Activities that go on inside the organization. They're kind of boring. Sometimes for me, I align with really great partners who are a little bit more passionate about and knowledgeable, and intense around them than I am, but I'm incredibly passionate about building a better company by finding better talent, building better systems, finding new and innovative ways to create a higher level of service and a better product.

I'm very passionate about that. And so it doesn't necessarily need to be that you are building a business around something that you would do for free. That's oftentimes what we coach entrepreneurs to do is like find out what you would do for free and then build a business around it.

That's nonsense.  No one's going to pay me to play golf all day. I'm not good enough to be on tour. I'm probably not interesting enough to start a golf YouTube channel.

Even if I was. I just don't think I'm going to make a business out of it. So I don't want to misguide you and say that you have to be passionate about the day to day work that you're doing, but you do need to be passionate about the opportunity that you're chasing. You do need to be passionate about what you're building.

In a lot of our businesses. I'm not actually passionate about the nuts and bolts of what we're building. I'm passionate about the opportunity to build something better than it's currently being built or to build something that is helpful and useful to people that doesn't even exist yet. That's truly meaningful to me.

And I bring a lot of passion in my leadership of those companies because I know that we're doing something that brings good into the world. And I love that.

The fact is on your entrepreneurial journey, there are going to be a lot of days where it just feels like a grind.

Where you don't feel like getting up and doing all those things that are in front of you when your calendar just feels packed When it feels like you're stuck in the mud like you're working all day and getting nowhere They're gonna be days like that. That's just part of the journey And if you don't feel like what you're doing actually does something meaningful It's gonna be way easier for you to give up It's just the truth.

And I really want you to consider this because there are so many different business opportunities being thrown at you all day, every day. Now, if you're in the entrepreneurial space, you look at social media, they're like teaching you how to build a million different businesses, and that's awesome.

We live in a world with more opportunity than at any point in human history. And I think that that's great. It is also true that there are a lot of businesses out there that you can make money off of that don't necessarily contribute to the greater good. They don't really provide a lot of value into society, but they are opportunities and they're still going to be tough.

There's still going to be a grind. It's still going to take a while to build them. And there's still going to be a bunch of stuff that you don't always feel like doing every single day. And when you are in a business that you don't truly feel bring something of value to the table, those days when it's really difficult, you're just not going to do it.

You're way less likely to do it. I should say. That's why so many people go down this rabbit hole of chasing this and chasing this and chasing this because what they're really looking for is the easier way to make money because they haven't found the thing that they feel is actually valuable and they're passionate around building.

And so I want you to deeply consider of all of the businesses that you're either considering Or that you might even be running right now. Are you deeply passionate about what you're building? You don't necessarily need to be deeply passionate about the work you're doing. The day to day activities, those are going to oscillate.

Sometimes you're going to love them. Sometimes you're going to hate them. You're going to have wins. You're going to have grinds. It's going to be a little bit of a roller coaster. Hopefully that's trending upward, but you don't necessarily need to be. Passionate about every little thing that you're doing.

Are you passionate about what you're building is what you're building? Meaningful to the people that you're providing the service for is what you're building meaningful to your target avatar is your product Useful is your service valuable Those are the questions to truly consider and are you passionate about doing it better?

Are you passionate about building a better product? Are you passionate about providing a better service? Is there a need for it? Is there a space for it? Is there a gap in the industry where you feel like if you bring your talent, your focus, your passion and your drive that you can raise the standard, you can fill that void and you can build a better company than your competitors.

If you have that passion, And you feel like the answer is yes to those questions, then you're on the right track. If you feel like you're in business just to make money because you see a good business opportunity. It's going to be a little bit more difficult to maintain your momentum because you're not connecting what you're doing every day to a higher purpose.

I hope that makes sense. And I hope that you take some time if you're struggling in really getting that next level in your business to just consider, is this the right business for you? Are you doing it for the right reasons? And you might not need to abandon the business completely, but how do you retrofit the business to raise the standard, to really speak to a higher purpose?

Once you make that click. I'm telling you right now that changes everything. So that's step number one, identify what business you want to be in, in the first place,

Step two is to build your roadmap. That is to take your business from where you are right now. and create a path to where it is that you want to go. That might be that million dollar net profit number.

It might be well beyond that. It might be a different road map to get to wherever else you want to go, but you need a path. You need a road map, a detailed manual essentially on how you're going to get from here to there. To hear and everything that's going to happen along the way that's going to culminate in you reaching your destination.

This is one of the biggest mistakes that I see new entrepreneurs make is they try to create their roadmap. From zero to fruition, let's just say it's a million dollars in net profit per year without any milestones along the way. I see this really with salespeople all the time. Like salespeople do their business planning every October for the coming year.

And it really doesn't matter what happened in their business that year. They like 10x their goals every single year. But they don't build a road map as to how they're going to 2x them, then 4x them, then 6x them, then 10x them. They just go, here's where I am, and I'm going to 10x it from here. That's not how business works at all.

And anybody that ever told you that, please don't listen to them ever again. Businesses don't go from 0 to 60 in no time flat. Businesses scale. You have to scale a business over time. And in order to do that, you're going to have to learn how to grow a business responsibly, reinvest in that business, protect your margins, and then grow your profitability over time.

And what that means is that the problems that you're going to solve in the beginning aren't going to look anything like the problems that you're going to solve later on. And so if you don't draw up What is going to look like in the short term in the medium term and then culminate in the long term, you're thinking long term when you should be thinking right now, you're trying to get to a million dollars in net profit when you should be doing the work to get to 100, 000 first, that's a whole different set of activities.

That's a whole different set of focuses to get you to that initial point of profitability. So you need a roadmap and that roadmap needs to have all of the checkpoints on the way to get to where you're going.

When we go into any new business, we spend a significant amount of time putting our operating system together. That's our roadmap, that is our vision, our strategy, our ideal client, our target avatar, our mission, vision, values, the roles, the key roles inside of our company, and then our short term, medium term, and long term strategy.

And short term is really the most important part up front because until we hit a certain level of momentum, the longterm doesn't really matter until we hit a tipping point where the company can self propel itself forward, nothing else really matters.

We really can't even focus on the long term unless we know that the company is healthy enough. To continue to fuel itself. So the way that we measure that, by the way, is in any business, you're going to have a cycle. You're going to have essentially the life cycle of your product or service. How long does it take you to go to market with whatever service you have or product that you're providing, right?

How long is the life cycle of a client? How long does it take a client to come in as a prospect and then transition and convert into a sale? And then how many of those do you need every month, every quarter to keep your business moving forward? 

And then you'll know that you've hit that point of forward momentum when you're not in any danger of having to reinvest yourself in the company for the life cycle of that period, if that makes sense. So if my life cycle is three months or so, then I know that my company has forward momentum when I have more than three months of working capital.

So that my company can reinvest in itself. I'm never in any danger of me having to put more of my own money back into the company. If we have a slump or we have some light months or things like that. So until you really hit that threshold, you really shouldn't be thinking about how to make a million dollars in net profit.

You should be thinking about how to build a healthy company that operates as its own living breathing organism. If I know that my life cycle is three months, I probably want to build six months of reserves that way I basically have a very healthy company where I have two life cycles worth of reserves in the bank  and I know that the business is healthy enough to keep moving forward if we lose a little steam or we have seasonality or market volatility or things like that.

So our road map really starts with how do we get to a healthy company? How do we go from zero to healthy? That's going to be our short term goal. And we're going to figure out the amount of sales we need, the revenue we need to bring in. The margin we can expect, but our first order of business is to figure out how to create a self perpetuating, healthy company. That's step number one on your roadmap.

Then once you have that figured out how to build a healthy self perpetuating company, then you can figure out how to scale. Up until then, you haven't really been scaling. You've been building from zero to healthy. You've been building from zero to legitimate company.

Now, once you're a legitimate company, you need to figure out what your financial goals need to be to scale to the next level. Essentially, Once we're healthy, then what do I need to reinvest in? What areas of the business do I need to reinvest in? So that now we are focused on responsible, consistent growth.

We're taking that healthy company and we're starting to pour gasoline on the right parts of the fire so that we're growing and we're eventually going to hit that million dollars in net profit predictably, responsibly. What does scaling look like? Where do I need to invest? 

This is an important aspect to find clarity on because as you scale your company, you're going to need to put more money into it to get to the next level. Your margins are going to compress a little bit. You're going to be spending more per month to run the business and that's okay.

You need to do that in order to continue growing, but you want to make sure that you're investing the money in the right places.

So many entrepreneurs, they get from zero to healthy, just on sheer willpower. Because they're really, really driven and really, really passionate about what they're doing. But then once they're making consistent revenue, once they're making a lot of consistent money coming in, they don't really have a plan for scale.

And then what happens is they start chasing every little shiny object. They start spending a little money here. They start spending a little money there. They hire this person, not really knowing if that's really the role they need to be hiring for. They go and they sign up for all of these different products and services and verticals, or they go chasing different offerings and try to expand their services.

 They don't know how to go from company that is now finally healthy to really responsibly scaling to get to where they want to go.

And now they have the money, enough money to start to waste it and to be dangerous. And that's how they end up like always in this cycle. Of just getting by. There are so many entrepreneurs out there that are running technically healthy companies, but they're really just getting by because the more money they make, the more money they spend, they don't really have a vision to get to the next milestone.

And they're just kind of stuck at this ceiling. So you want to have clarity around it. Once your company is healthy, what is the most meaningful place that you can reinvest in the business? And we're going to talk steps three, four and five here, but I'll give you a little spoiler alert.

Number three involves identifying all the key roles in your business. Doing that up front, identifying everybody who's going to work in your business at fruition and what their role is going to be is going to help you draw your road map as to where to reinvest once you have a healthy operating company.

You're going to want to reinvest in the places that are going to help that continued growth and keep the company stable while you're growing. One of the big challenges for any growing company is maintaining stability, maintaining the same level of service, maintaining the same culture, maintaining the same stability internally in their operations department and things like that.

Essentially, anytime a company is growing really fast, operations start to break down, controlled chaos breaks out, or your level of service starts to become more difficult to provide because there's so much business coming in, it's very difficult, client onboarding, client service, deploying your product or service, it becomes really, really difficult to do at scale.

And so Those are the two places that you really want to think about reinvesting is growth. What brings more business in the door and stability? How do you keep your operations stable while you're growing? That would be my best advice on where you want to look to reinvest. Once your company is really healthy.

And as I mentioned, step number three is to identify every role inside of your business. You want to do this up front while you're creating your roadmap. The reason being is because no matter what size your business is, All of those roles already exist inside your company, whether you're starting at zero or you're already out a million dollars in net profit.

The roles inside the company look the same. The only difference is who's filling those roles. In the beginning, if you're a solopreneur, you're filling all the roles. And then as you bring on your first people or your partner, your small team that you're building, they're going to fill some of those roles.

Pretty much everybody on your team is going to fill multiple roles. The trick is that you want to identify every single role in your business at fruition, what it's going to look like, who you're going to need to bring on to get there.

And then you need to align the people that you currently have your current team with the best seats on the bus for their skillset. That's a challenge to do. Because there are so many distinct roles in a lot of businesses and you're going to need to be a leader here, a real CEO here. This is going to be the toughest part of your leadership journey.

You're going to need to align people with unique skill sets, unique personalities, unique characteristics with multiple roles. 

And so you really need to play some 4D chess here in one of our businesses. We've identified 25 different roles in the company. And that business is still growing. We're a very healthy business. We're a very profitable business. We're reinvesting right now in scaling. We're bringing on our business development team.

We're have an entire strategy around how we're going to get to where we want to go, which I'll talk about in a moment, but we only have a team of about seven people right now. We have about seven people filling 25 rolls right now. And so me as a leader, my challenge, my opportunity is to take those seven people and figure out the map as to how I can align them with those 25 rolls in the most productive and efficient way.

It's challenging work. It's much easier when you have the revenue in the capital to bring on 25 people for 25 roles, but that's not the entrepreneurial journey. And so we need to identify what every single one of those roles is upfront, otherwise, here's what tends to happen.

We tend to define the structure of our business by what the people on our team are currently doing. We let our current setup become the definition of what our business is. And that's a huge mistake that so many entrepreneurs make.

In the beginning of your business, you're going to have team members that are feeling like three or four different roles sometimes. But as you're growing, you need to identify what those roles actually are so that when you have the revenue and when you have the scale, you know which roles to actually hire people for and to move them out of to remove some of those roles.

Maybe they go from four roles to two roles and you bring on somebody else. To fill those other two roles that is specifically focused and is really talented just in those couple of things. 

But you're never going to see that if you think that that person only has one role, this is incredibly crucial. So many small teams, they don't identify all the different roles that their people feel. And this keeps them from scaling. They look at their team and they're like, Oh, yeah, Jessica, she is the admin, the marketing coordinator, customer service coordinator, the transaction manager, like she's all of those things.

And you define it as one role. That's like four different roles right there. And you need to be really cognizant of that because when it comes time to hire your next team member, you need to identify what are the most important roles that they can take away from Jessica because she's doing four different people's jobs.

So in the beginning, when you're creating your roadmap, you need to flesh out what all of the different roles in your business look like, because they're going to start with a small amount of people. Doing a large amount of roles and you need to be responsible enough to identify them so that when you bring in new team members, you plug them into the right seat on the bus.

Once you identify all of those roles, your business is healthy, you're making good revenue, it's time for step four and that is to reinvest in your business. You've got to reinvest in your business so that you can scale. It's really tempting in this chapter of your business to start taking a lot more profits out than you probably should.

This is the point where your business is making good money. You're really still stressed all the time. You're like running around with your hair on fire doing a million different things every day. Your team is like a little family. They're all in the controlled chaos together. But it's technically working.

You're technically making more money than you need to survive. Your company is healthy. You've got money in the bank. It's really difficult at this point, not to start to want to take a higher amount of profits out of the business. The reality is you're still vulnerable in this state. You're still at a place where one market shift or losing a key team member, or just.

Succumbing to burnout because this business is still hard could really knock you down a peg and in order to insulate yourself to create an even healthier business, 

you need to be disciplined here and reinvest into the business. So you can actually transition from being an operator at some point to being an owner of the business. This is where we make that transition. And this is one of the most difficult parts of the business.

But it's the most rewarding if you get it right. There are two key areas that you want to reinvest in your business. It is growth. What brings more business in the door and then it's operations, meaning how do we provide the same level or better level of service as that growth comes in? Now on the operation side, this is going to be very unique in your business.

You're going to need to identify What's going to become a bottleneck in your operational flow as your growth increases as the business comes in the door. 

For example, if there are parts of your operational flow that take more time or more hands on service from your team, those have the potential to become bottlenecks. If you start driving a lot of business. Into your operation, into your workflow.

If client onboarding is something that's a very hands on experience, it's something that's very difficult for you to automate in your business, then you're going to want to invest in making sure that your client onboarding process is stable. Maybe you need to hire new team members. Maybe you need to beef up your automations, whatever it is that stands to be your first bottleneck whenever you invest in growth.

So you invest in a new business development person, they start going out and crushing it. They're driving a whole lot more revenue and a whole lot more clients in the door. You need to be able to onboard those clients as seamlessly and with the same level of service that you were before. So you need to look at your operational flow and go Where can we not handle more right now?

Right where, if we were to double the business today, what would fall apart? First, that's what you need to invest in.

It's a super simple concept. You need to invest in driving more business in the door responsibly, which we'll talk about in a second. And then you need to invest in unclogging your bottlenecks. What parts of your conveyor belt are not going to work if you were to double the business today?

This just takes some planning and this is going to develop over time. What you think is going to be a bottleneck in the beginning might not show itself to be a bottleneck later on in your journey, but you need to review this stuff on a regular basis. What's working, what's not working. And you need to be cognizant before you go and invest in growth.

You need to be cognizant of what is going to break down. If that growth actually succeeds, that's where you need to reinvest. 

This is going to be one of the most difficult challenges for you as an entrepreneur, because this is at a point in the business where you're dealing with an amount of stress. That's a little bit less than it was when you were just getting started because you're making good money. 

But I promise you, if you want to hit your longterm financial goals, you don't want to start taking massive amounts of profits out of the business. Just because you can reinvest, scale the business and then become a true owner of the business rather than forever being an operator.

The last step in this process is one that so many entrepreneurs overlook, but it's crucial. You need to protect your margins. You have to protect the profitability of your business. Now, as your business scales, your margins are likely to decrease, at least by a little bit.

If you're running a totally streamlined organization, skeleton crew, it's like just you. And a laptop, you might have like 95 percent profit margin in the beginning, but that's completely unsustainable because you're filling every single role and you'd never be able to make the money that you want to make without bringing on more expenses, without building your team, without expanding the infrastructure.

So your margins, your profit margin. Is organically going to go down over time, your goal, the focus should be on protecting that profit margin. The way you want to do that is to figure out what your net profit margin needs to be realistically at fruition. And make sure that you're protecting that number, that you're never going below that number, and you're not approaching that number way before you need to be approaching it.

So in our sales business, we wanted to run at about a 25 percent profit margin. I was comfortable with that because generating the amount of revenue that I needed to generate to hit a 25 percent profit margin with the net profit goal that I wanted was entirely feasible. It was a manageable business. We knew every role inside of it.

It was totally doable inside of our industry and we figured that a 25 percent net profit margin was where we needed to be for everybody in the business to have the opportunity that they want to have to hit their financial goals. It was the perfect size for our company and it was how we got to a million dollars in net profit.

Your business might be totally different. The reason that you want to figure out what that profit margin needs to be at fruition is because you're going to track it along the way. And when you get to the point. Where it's time to really reinvest back in the business rather than taking profits out of the business.

That's when you're going to start to invest in driving business through new channels. That's where you're going to start to invest in different strategies that you haven't invested in before. And you need to measure what the return on those strategies is.

For example, if you got to a certain point in your business, mostly through word of mouth, through referrals, through organic marketing, and now in order to get to the next level, you're going to take that money and you're going to reinvest into paid advertising, Google, pay per click, all sorts of social media marketing, all those types of things.

You need to be able to measure what it's costing you to drive that new business and what it's doing to your net profit margin, you could go down in a whole different new marketing Avenue and spend a ton of money generating new business. 

But if the money that's going out, isn't generating enough money coming back in, then you're growing a bigger business. That's going to be way more stressful to run with way more moving parts and a lot of chaos, but you're not making any more money. I know so many entrepreneurs that run big, big, big businesses, but they're really poor at protecting their profit margins.

And so what they do is they end up with a whole lot of awards. They end up with really cool offices with all sorts of plaques and all kinds of stuff and very little in profit to show for it at the end of the day. When the little guy who's responsible, who maintains really strict financial guidelines around his business has a higher profit margin and is making more money at the end of the day.

So as you reinvest in the business, It's incredibly important to get a handle on what your return is on that reinvestment and what it is doing to your profit margin. You need to identify what your goal profit margin is in the first place and make sure as you're approaching that margin that you're getting the return that you want on the money that you're investing in the company.

Are you overspending on advertising? Are you chasing too many shiny objects? Is there a way you can streamline your operational flow and cut down on some of your overhead? Do you have too many people working in your business?

I hope not. I hope that you get to employ hundreds of people in your business and they're all amazing and you get to provide as many jobs as you possibly can, but you've got to look at what is the return on the money that you're spending on your business, because as you scale, protecting your margins needs to be your number one goal.

This is where your business is healthy. It's thriving, it's growing, but it's not always necessarily making more money. So you've got to really look at that profit margin number and make sure it's staying above the threshold that you projected for your business.

All right. That was a lot of information that I threw at you in a relatively short period of time. So let's move on. Recap really fast. Step number one to building a million dollar net profit business is to one, get into the right business in the first place. You don't necessarily have to be passionate about all of the activities in the business, but you need to be passionate about what you're building.

Step two. Is build your roadmap. You need to know how you're going to get from where you are to where you're going to go, but you also need to know what every stop along the way looks like, because that's what you're working towards next. You're not working from zero to a million dollars in net profit.

You're working from zero. To 100 to 300 maybe to 750 to a million and you need to know how to get to each one of those steps because the business is going to look different and the problems you're going to solve are going to look different along the way.

Step three is to identify every role inside the business at fruition. You or your small team are going to fill all of those roles in the beginning, but you need to identify every single role because as your business grows, you're going to bring in new team members to fill some of those roles and you can't just have them do what your old team members were doing.

You have to figure out which seats on the bus actually fit them best.

Number four is to reinvest in the business. You're going to hit a point of profitability where it's really tempting to start taking more money out. It's like that first plateau on the way up the mountain. You're going to be tempted to be like, this is high enough. I'm good here, but then you're always going to be an operator.

You're never going to be an owner. You've got to reinvest in the business so you can eventually scale to the point where the business is running without your day to day involvement.

And then finally protect your margins. Don't be financially irresponsible in your business. I hope you have the same financial scrutiny in your business at a million dollars in net profit as you did when you had 5, 000 in net profit. That's the type of focus that it takes on the finances to really hit that type of profitability.

There are so many entrepreneurs out there that have the potential to build true million dollar businesses, but they just don't manage them very well. They don't manage their P and L well. They don't look at the numbers. Well, they don't protect their margins. They don't look at their return on investment.

They don't calculate any of that stuff. And it's incredibly frustrating to see because they're leaving a lot of money on the table. Don't be like that. Figure out what your ideal profit margin is and protect it at all costs. 

All costs. That is all she wrote for this week. Ladies and gentlemen, I appreciate you hanging out with me. I hope this guidance and insight was helpful. Drop a comment below. Get in touch with me. Let me know how your business journey  📍 is going and consider going over to brianforce. com and signing up for our weekly newsletter, The Mindful Tycoon.

We do all sorts of guidance, insight, tips on how to grow your business and live a purpose driven life. Thanks again for listening and I'll see you next week.