5 secrets to help you make your first million
Daniel Priestley on how to make £1m in your first year of business
Many small business owners dream of hitting the elusive seven-figure turnover. It means you need to average £25,000 a week in sales for 40 weeks of the year. Some businesses take many years to achieve this, however at 21 years old I managed to crack through the £1m barrier in my first 12 months of trade.
When I was 21 years old I started my first limited company. I had worked for an inspirational mentor for two years and had learned the ropes. The first year I worked for my mentor he had me doing intensive sales meetings. Some days I would do 12 sales meetings back to back for an hour each meeting. I would start at 7:30am and be home by 10pm. It was exhausting but it was a fast track for learning how to sell.
The following year I was promoted to running a small marketing division. I did 12 months of non-stop product launches. I wrote advertising copy, I ran events, I collected leads for the salespeople and I made sure I ran my division profitably.
As is often the case with youth, after just two years in the field I felt ready to emulate my mentor and employer so I went out on my own and started my own business.
It took three months to prepare for my business launch. I created ads, brochures and a brand. I did deals, put everything on credit and hoped like crazy it would all work out. I launched my business in September 2002 and by September 2003 I had turned over a million! (It was in Australian Dollars at the time so you might want to deduct points for that – either way, it was a lot for a boy of 23!).
I ran the business from my home, I was profitable and I had buckets of fun. I started my business on my credit cards and I had close to $300,000 in the bank at the end of year one.
Since that launch I have been involved in several start-ups in Australia, Singapore and the UK. In almost every case, the business has done over a million in sales in its first year of trade.
How does this consistently happen? How do we keep breaking through the seven-figure barrier? Here are my secrets:
1. Micro-niche – You need to hone in on a tiny little segment of your marketplace. You must imagine an exact person and sell to them. When I launched my first business I imagined that I was writing all my copy for my dad. Whenever I had to write an email, an ad or a brochure I wrote it as if I was talking to a man, aged mid-40s, who was frustrated with his current service provider. This shaped all of our copy into a sales conversation that hit the mark with a certain type of reader.
2. Product strategy – You need to have three products, not just one. First you need a free product that communicates your value. Second you need a core product that is more than £1,000 to buy. Third you need an upgrade product that is two to three times more expensive than your core product. If you just have a core product, you will end up charging too little or you will end up having too few clients. You must have all three products.
3. Product launches and promotions – I never went out to get one customer at a time. I ran events and promotions that encouraged everyone to come in at once. I wanted people to feel a buzz and see that other people were interested in buying what I had to sell. Sitting with one potential customer at a time will not get you to £1m in sales for the year. You must learn how to get 10-100 people at a time to engage with you.
4. A great salesperson – I was lucky here. My best friend is a masterful sales communicator. He listens at the right time, he talks at the right time, he's passionate and he's driven to hit his targets. If I created leads he would find a way to turn them into sales. This one fact made it possible for me to get my advertising to be profitable. You must get a great salesperson in your business. They need brochures and a script. You need to give them warm leads every week and pay them regularly.
5. Partnering with people better than you – I knew that no one would want to buy something from a boyish 22-year-old so I did a joint venture with one of the most respected “elder statesmen” in my industry. I had him become the face of the business and deliver our presentations. This added a lot of credibility to the business and brought in a lot of new people. There's no rule that says you have to wait 10 years until you partner with top people. My deal involved no upfront cash, it was based on a revenue share so you may not need to spend any money to secure a great deal if it's structured well.
The first 12 months of business doesn't have to be loss-making. It doesn't need to be stressful and draining. You don't have to throw in all your money in year one hoping for a return in year three. There are many businesses that make great money in year one and everyone has fun growing them.
With a sales and promotions driven approach to business, it's not impossible to make your first million in sales within 12 months of launch. Good luck.
Daniel Priestley is a successful entrepreneur, event producer and author of Become a Key Person of Influence. www.keypersonofinfluence.com