Make Your First Million
Are you working to get your business to hit the coveted $1 million mark in sales? If so, then heed the following advice from people who have either pulled off the feat or are experts in the field.
Take Randy Horn, who toiled for six years before his board game business hit the $1 million mark--a milestone that came and went without much pomp and circumstance.
"I don't remember throwing a party," said Horn, the owner of Los Angeles-based Zobmondo!! Entertainment and creator of the Would You Rather .? board games. "It felt satisfying to have grown to that size, but I quickly moved on to planning for the next year."
Horn, whose firm now generates $6 million in annual sales, worked out of the bedroom in his apartment for eight years, still has just one employee, and has been all about growing slowly and methodically. "It was always a priority for me to maximize my profit, never a priority to get huge quickly," he stressed. "My goal was simply to create a good business, be my own boss and make a good, solid living."
It's exactly that kind of focused, methodical approach that many entrepreneurial experts say you need if you want to achieve the seven-figure mark. "What's especially true in this economic environment is, in order to achieve your sales-figure goals, you have to demonstrate a long-term focus and a commitment to real value creation," said Lori Kiyatkin, assistant professor of corporate strategy and entrepreneurship at Towson University in Maryland.
Kiyatkin said she would ask three key questions if an entrepreneur walked into her office and asked, "How do I make my first million?"
- What is your company mission?
- What is your ability to actually create real value?
- What is it you're doing and why?
"After I got good answers to those questions, I would encourage the entrepreneur to focus on that and identify objectives that match that mission," she advised.
Horn's mission was to sell board games, but he didn't come out of the gate in 1998 targeting big boys like Target or Wal-Mart. He called 5,000 independently run toy stores during his first year of business and sold 11,000 games. "My view was I needed to lock in some success to use that to sell to bigger stores and use that success to sell to even bigger stores," he said.
Five years after placing his first board game in a mom-and-pop shop, he landed a deal with Barnes & Noble, and Target called a year later. The rest is million-dollar history.
His advice to entrepreneurs wanting to bring in the big bucks:
Get ready to get to work. "There's no quick and easy shortcut. I worked hard calling stores and selling one game at a time."
Don't shoot for a million. "Hunker down and figure out how to create a sustainable, profitable business."
Horn also wasn't big on going into debt or turning over a large chunk of his business for an equity stake. "I used my profit every year to grow a little bigger and a little bigger," he said.
But taking on credit isn't all bad, advised Terry Mackin, managing director of mergers and acquisitions for Generational Equity. "Don't be afraid to use credit to leverage your growth," he maintained.
Mackin also had these suggestions for entrepreneurs:
- Research competition to find out what makes you different and use that as the foundation of the message you communicate to your customers.
- Identify a sales target market and dedicate a substantial amount of your financial and professional resources toward building your brand.
- Constantly look for new avenues of technology , distribution and cost savings that will allow you to maximize your bottom line.
Boosting your customer base is also critical, and what better way than e-mail, suggested Nell Merlino, CEO of Count Me In and co-founder of American Express OPEN's Make Mine a Million $ Business program. She advised e-mailing customers with value-added promotions, focusing newsletter content on what the core business is, asking for feedback, and closely tracking e-mail statistics.
Anthony Mongeluzo, the owner of Medford, New Jersey-based Pro Computer Service, which employs 17 people and has $2 million in annual revenue, believes it's all about being generous to your prospective clients.
"I took a lot of time--instead of asking for business--to meet other CEOs and learn about their business model, so I can find them business," he said. "The more business I referred, the more came back to me."