Most service businesses make around $50,000 a year.
A lot of them fail to grow beyond this number, and eventually these owners say, "This business isn't worth it."
They're right. If you're going to work 80 hours a week, and your business isn't going to generate more than $50,000, then what's the point?
So, how do you grow your business to the next level?
Outline Your Goal: From $1 to $1,000,000
If you want a business plan that works then you need specific, achievable goals. The most important goal, as far as this post is concerned, is growing at a regular pace.
Let's run some numbers.
You start with nothing and gradually climb your way to about 35 clients in your first year. Each client pays you about $1500 a year.
So, on average, your total revenue is about $50,000. That's a mighty fine start - now keep it going. Your number one job,from here on out is to make sure you increase that number every year.
Revenue Per Client: $1500
Total Revenue: $52,500
Hopefully, you're not doing all of the work by yourself. If you're a Lawn Care company, you've hired some mowers and maybe a guy with a little bit more experience. If you're a Cleaning Company, you have yourself a cleaning crew or two to manage.
Keep your eyes on the goal. Focus on growth. This year, it's your job to get more clients. Marketing is the #1 key to doing this right. In your first few years, it's going to be hard because you haven't marketed before, but you will learn what works, and what doesn't. (Hint: Test everything. Don't spend big bucks on a campaign if you don't know how well it will work!)
Your other goal is to upsell to your existing clients. Aim to sell more services to every single client, until your revenue per client reaches $1600.
Revenue Per Client: $1600
Total Revenue: $120,000
More of the same? Yes! Keep at it! At this point, you should be looking to hire multiple teams of employees, including an office team that's ready to answer phone calls.
With extra employees, the importance of upselling to your clients only becomes more important. You have to offset the rising costs of running your business. Otherwise, your company might generate more revenue, but you will still take home the same paycheck.
Revenue Per Client: $1700
Total Revenue: $255,000
By now, you should be a pro at marketing. Your operations should be running smoothly, and you should be spending your free time educating yourself on how to improve your business.
- Where can you cut costs?
- Where can you find new customers?
- How do you hire better employees?
If, at this point, you are still working alongside your crews on a regular basis, you might need to think about why you should do $100 per hour work.
Revenue Per Client: $1900
Total Revenue: $570,000
This is it! This is your year. You've been busting your ass all this time, expanding your mind and expanding your business. You run a sizable company, something that most of the small guys can't even dream about.
You've been providing the best service, and upselling your clients accordingly. You've been cutting down on wasted time and tracking all of your numbers. You've been building the route density in every neighborhood. Your office staff are great at their jobs, and you probably have a few licensed techs working for you now.
Revenue Per Client: $2100
Total Revenue: $1,050,000
A million dollars. If you've made it this far, you've been working harder AND smarter than most of the other business owners out there. Don't forget to take a hard-earned break once in a while.
It ain't a piece of cake.
Along this million-dollar journey, you're going to face a lot of obstacles. Clients will cancel on you for no reason, employees will mess up, and some of your services won't make you as much money as you'd like.
Depending on your situation, 5 years to get 500 clients might not seem possible.
Don't rush it. It's more important to build a steady business than a fast-growing one. If it takes you 6 or 7 years to build the company you've always dreamed of - so be it. The numbers in this post are a guide, not a rule.
Good luck on building your million-dollar business.