Connect with us

Success Advice

To Take Your Startup From $0 to $1 Million, You Have to Get This Right

your business needs to work at the smallest unit level possible before you even think about scaling

Published

on

how to build a successful business

According to the Bureau of Labor Statistics, small businesses make up 99.9 percent of the businesses in America. That’s impressive. What isn’t impressive, though, is that only 7 percent of them reach $1 million in revenue.

As disheartening as that statistic might be, there’s really only one reason why 93 percent of small businesses never reach the million-dollar mark. In almost every instance, the reason a small business struggles is that the entrepreneur or small business owner fails to get their unit-level economics right. (This term refers to your specific business’s revenues and costs as they relate to an individual unit.) 

What does that mean for you as an entrepreneur and would-be empire builder? If you want to build a billion-dollar business—and ultimately, an empire—first you have to build the perfect million-dollar business. No, scratch that: first you have to build the perfect hundred-thousand-dollar business. In other words, your business needs to work at the smallest unit level possible before you even think about scaling.

Get It Right Small

I can’t tell you how many times I’ve heard entrepreneurs say, “I’ll figure out how to be profitable once I’m bigger.” That’s the mindset that gets small business owners into trouble. Get it right small—or walk away early, before you waste valuable time, money, and effort on a losing proposition.

If you aren’t sure how to do that, don’t worry. We’re going to walk through how to check your unit-level economics right now. For the purposes of example, we’ll use a landscape maintenance company, but the concept holds true for every kind of business in every kind of industry and every geographic market.

The first step to getting your unit-level economics right is to identify what they are. In our mythical landscape maintenance business, the unit-level economics—based on some lightly researched numbers—are the monthly payment, fuel costs, insurance costs, and maintenance reserves for one truck ($1,400), one fully burdened (includes wages and benefits) two-person crew ($8,736), and the operating costs of the equipment necessary to maintain your customers’ lawns: a commercial lawn mower, a blower, a weed whacker, some rakes, shovels, and so on ($400).

Build Your Mathematical Formula for Success

Now that we’ve identified those, we can build a mathematical formula for success. This formula is specifically focused on revenue and direct operating costs; it does not include capital expenditures or Sales and General Administration (SG&A) costs—you’ll factor those in later.

Add these numbers up, and you get your unit-level direct operating expenses: $10,536/month, or $126,432/year. Now, you need to ask yourself a question: Can I bring in enough revenue to cover my direct operating expenses while leaving enough gross profit to cover overhead and generate the minimum acceptable net profit?

Again, let’s use some lightly researched numbers to explore how you can find the answer to that question. For illustrative purposes and simplicity, this example assumes a warm climate where lawns are cut throughout the year. A typical crew can cut 15 lawns per day, at $50 per cut. Assuming an average of about 22 cutting days per month, the average monthly revenue per crew is approximately $16,500, and the average annual revenue per crew is approximately $198,000.

Subtract the annual unit-level direct operating cost ($126,432) from the annual average gross revenue ($198,000) to get the annual gross operating profit per crew. The answer: $71,568, or 36 percent. Now, deduct the SG&A (which includes your costs to manage the business, get customers, pay yourself, and so on). It should never be more than 20 percent, so let’s assume 20 percent, which will leave you with 16 percent in pretax net profit. The minimum pretax net profit percentage a business must achieve to be viable is 10 percent, so in this example, the unit-level economics seem to work.

To build a successful business, you must start small and dream big.” — Aliko Dangote

Factor in the Variables

Of course, there are a lot of variable costs built into this formula. The cost of gasoline, insurance, and labor costs can go up, for example. So can the cost to service and operate your equipment. The revenue you can get per lawn can fluctuate, too, as can the number of lawns your crew can cut each day. You also need to account for bad weather days or times when a worker calls in sick. 

All of these scenarios mean you need to be very diligent about monitoring your variable costs to ensure your unit-level economics remain sound. But ultimately, by getting the variables right and tracking the basic economics of your business at the very smallest level—in this case, the economics of running a business with one crew—you create the foundation from which you can build an empire.

Once you’ve perfected your operating formula, you can determine exactly how to scale to $1 million. Let me show you how to do this using the same numbers we came up with initially. Take your revenue goal ($1 million), and divide it by your annual revenue per crew ($198,000). That calculation returns an answer of 5.05, but since you can’t buy 0.5 of a truck or hire 0.5 of a crew, let’s round up to 6. So, you need 6 trucks and 12 employees to hit your revenue target.

Six trucks and 12 employees will bring in about $1,188,000 in revenue; $427,680 in gross profit; and $190,080 in pretax net profit. To hit your revenue targets, you will need 450 regular weekly customers.

Take Your Business to $1 Million

Again, these numbers are just to illustrate the fundamental concept. The bottom line is that success is tied to your unit-level economics. 

Get your formula right at the smallest level, and you will be well on your way to ensuring your small business is one of the 7 percent that reach the million-dollar milestone. Get it wrong, though—or fail to consider it at all because you assume profitability is tied to how big your business is—and chances are high that your business will fail to reach the million-dollar mark…and may even fail altogether.

For more advice on how to take your business from $0 to $1 million and beyond, you can find Empire Builder on Amazon.

Empire builder, CEO coach, in-demand speaker, and three-time #1 bestselling author Adam Coffey builds high-performance cultures that drive transformative exponential growth. A CEO for more than two decades, he led three national private equity-backed service companies for nine PE sponsors, completing 58 acquisitions and realizing billions of dollars in successful exits. Coffey is a founding partner of CEO Advisory Guru, serving as management consultant and independent director to PE portfolio companies, family offices, and elite executives. His specialties include growth strategy, mergers and acquisitions, new business development, and exits. A proud US Army veteran, Coffey lives in Texas with his family.

Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Success Advice

Why Efficiency is Overrated (And How to Actually Get Things Done)

Published

on

Image Credit: Addicted2success

If you look at someone like Tim Ferriss, you might assume he is a hyper-productive, super-optimized efficiency machine. After all, he authored The 4-Hour Workweek and built a massive empire around deconstructing world-class performance.

But according to Ferriss, if you were to act as a fly on the wall in his house, he would often look like he is “doing a whole lot of nothing” or flailing like a “drowning monkey.”

The truth is, Ferriss isn’t obsessed with efficiency. He is obsessed with effectiveness. And there is a massive difference between the two.

In a recent deep-dive interview, Ferriss broke down how he structures his life, why he relies on “mini-retirements” to prevent burnout, and the exact protocols he uses to pull himself out of a low mood.

Efficiency vs. Effectiveness: The Ultimate Trap

Most people are trapped in the default mode of the universe: productivity theater. They do things that pass as productive to themselves and others (“Look at how busy I am!”), but they aren’t actually moving the needle.

  • Effectiveness is what you do.
  • Efficiency is how you do it.

As Ferriss explains, doing something well does not make it important. If you choose the wrong task and execute it flawlessly, you have wasted your time. It is far better to choose the absolute highest-leverage task (the “lead domino” that knocks over everything else) and execute it at a B-minus level than to efficiently accomplish tasks that don’t matter.

“If you’re running a marathon, you’re not going to take a taxi from point A to point B. Sure, that’ll be efficient, but that sort of defeats the purpose of the whole exercise,” Ferriss says.

How to Choose the Right Projects (The “Successful Failure” Method)

If what you work on is more important than how you work on it, how do you choose what to tackle? Ferriss uses a very specific filter for evaluating 3-to-6-month projects: “Can I succeed even if I fail?”

When evaluating opportunities, he chooses the projects that will allow him to develop rare skills or deepen valuable relationships, regardless of the external outcome.

When he launched his podcast in 2014, people told him it was too late. But he didn’t care about immediate external success; he used the podcast as a tool to reduce his verbal ticks, improve his interviewing skills for future books, and build deeper relationships with friends. Even if the podcast had “failed” commercially, he would have succeeded in leveling up his personal operating system.

The Architecture of a High-Leverage Day

Ferriss doesn’t rigidly structure every minute of his day. Instead, he focuses on a weekly architecture. By setting rigid days for specific tasks (e.g., all team calls on Tuesdays, all recordings on Mondays and Fridays), he creates a scaffolding that absorbs the chaos of daily life.

When it comes to his daily routine, he follows two main rules:

  1. Do Not Rush the First Hour: If he feels rushed in the morning, he will feel rushed all day.
  2. State, Story, Strategy: To change his mindset, he starts with his physical state. He uses a 3-to-5-minute cold plunge immediately upon waking to release norepinephrine, followed by a hot tub for hyper-dilation. This state change creates a more enabling internal “story,” which allows him to formulate a better “strategy” for the day.

“If you can single-task for two to three hours a day… you’re going to be ahead of 90% of the population,” Ferriss advises.

Managing Low Mood and Hypervigilance

Even top performers battle anxiety, rumination, and low mood. Ferriss refers to his mind as a “border collie”—if you leave it inside too long, it will chew the couch.

To prevent depressive spirals, Ferriss relies on a few non-negotiable protocols:

  • Prophylactic Scheduling: An ounce of prevention is worth a pound of cure. Ferriss schedules regular group dinners with friends and multiple week-long group trips a year to ensure he always has something to look forward to.
  • Identity Diversification: If your podcast, startup, or job is the sole barometer of your self-worth, you are incredibly vulnerable. Ferriss diversifies his identity through rock climbing, archery, writing, and investing. If his business has a terrible week but he hits a PR in the gym, his overall week is still a win.
  • Protecting Sleep: Ferriss notes that his low moods are almost always preceded by compromised sleep and excessive caffeine intake.

Beware the “High Achiever Complex”

When operating in a permissionless environment (where you can work whenever and wherever you want), the biggest risk is that you will end up working all the time.

Ferriss combats this by taking mini-retirements—scheduling 3 to 4 weeks where he is entirely offline.

“If you do that, you have to set up systems and policies that will persist after you return,” Ferriss explains. If your business requires your constant input, it is broken. Stepping away forces you to build systems that scale, ultimately saving you from your own desire to constantly be in control.

In the end, you are going to die with items left on your to-do list. Stop trying to efficiently clear the deck, and start focusing on the few critical actions that actually make you feel alive.

I had the pleasure of interviewing Tim Ferriss 11 years ago:

Continue Reading

Success Advice

How to Achieve Massive Success Without Crushing Your Soul

Published

on

Image Credit: Addicted2success

Most highly ambitious people suffer from a dangerous illusion: the belief that if they can just achieve one more milestone—a funding round, a promotion, an exit—they will finally feel like they are enough.

Entrepreneurs and leaders will sacrifice their sleep, relationships, and sanity to reach that distant horizon. But when the big payday or the massive accolade finally arrives, a terrifying reality sets in: nothing changes. The external world shifted, but the internal emptiness remained. Trying to find internal validation through external achievement is like drinking saltwater to quench your thirst; it seems like it will work, but it only leaves you thirstier.

High achievers are always playing two games in parallel:

  1. The External Game: Your career, your income, your accolades, and your status.
  2. The Internal Game: Your relationship with yourself, your peace, and your self-worth.

You can have white-hot ambition, make incredible money, and build a meaningful legacy without burning out. But to win without crushing your soul, you must master metacognition—the ability to reflect on and control your own thinking.

Here are three profound internal shifts you must make to beat high achiever burnout and build a life you actually enjoy.

1. Fire Your Internal Coach

Most ambitious people are driven by a ruthless inner monologue. This internal “coach” constantly whispers that your value is strictly tied to your performance. If you fail, you are worthless.

Many high achievers justify this abusive inner voice. They believe it gives them their edge and keeps them motivated. But if you step back and truly observe that voice, you will notice something profound: your inner critic rarely offers actionable solutions or brilliant ideas. It only offers fear.

That toxic internal coach is simply your own fear incarnated—fear of failure, fear of rejection, and fear of not being enough. Worse, this doesn’t just hurt you. When you operate from a place of self-loathing and fear, you project that negativity onto your team, your business partners, and your family.

You cannot cultivate healthy relationships with others if your relationship with yourself is toxic. To reach the next level of leadership, you must fire that coach. Give yourself permission to stop beating yourself up, and consciously shift from being your own harshest critic to being your strongest ally.

2. Pull the Nails Out of Your Head

Imagine a person complaining about a blinding, chronic headache while completely ignoring the obvious iron nail sticking out of their forehead.

In business and in life, we all accumulate metaphorical nails. Your nail is the obvious problem you are actively avoiding. It might be a co-founder relationship that has turned toxic. It might be a failing product line you are too stubborn to cut. It might be a destructive personal habit, or a deep-seated trauma you have refused to address.

We leave these nails in our heads for one simple reason: pulling them out hurts.

To reach the next peak of success, you have to realize that growth is not a straight upward line. To get off a stagnant plateau, you must first traverse a valley. If you fire a toxic client, you will face temporary financial stress. If you quit a bad habit, you will face temporary discomfort.

Something has to get worse before it gets better. But everything you truly want is on the other side of that temporary valley. Facing your fears and pulling out the nails is a superpower. Endure the short-term pain, and watch how fast you elevate once you are finally free of the friction.

3. Trust Your Second Voice

The voice of fear and criticism is not the only voice in your head. You have a second voice—your intuition.

Unlike your inner critic, your intuition does not speak through panic or fear; it speaks through energy. Energy is the language of your true ambition.

When you think about a project you feel obligated to do out of societal pressure, your energy lags. You feel a heavy sense of dread. But when you think about an idea you are secretly terrified of but deeply passionate about, your energy spikes. You feel electricity.

In almost every major business or life decision, you already know the answer. Your intuition has already told you what to do; your hesitation is simply a negotiation with your fear.

How do you conquer that fear? Write it down. Fears are incredibly dangerous when they lurk as nebulous clouds in your subconscious. When you put them on paper, they lose their paralyzing power. They cease to be monsters and simply become standard problems to be solved. And as an entrepreneur, you are an expert at solving problems.

Stop Waiting for the Destination

It is easy to look at the grind of building a business and think, “I’ll be happy when I finally sell this company,” or “I’ll relax when we hit $10 million in ARR.”

But the point of the journey is not the destination. The point of the flight is not simply to land; it is to experience the magic of being in the air.

Stop postponing your happiness for a future that is not guaranteed. Fire your toxic internal coach, do the hard work of pulling out your nails, and follow the energy of your intuition. You have already arrived. You are living in the “good old days” right now—make sure you are actually present enough to enjoy them.

Here is a great speech by Graham Weaver about How to Win Without Crushing Your Soul

Continue Reading

Success Advice

Why Your Morning Routine Needs a Document System, Not Just a To-Do List

Published

on

Image Credit: Addicted2success

Most morning routines are built around a mindset. A journal entry, a cold shower, ten minutes of stretching, or a fixed order for coffee and email, each one designed to start the day with focus. What almost never makes that list is the paperwork already sitting in your inbox from yesterday: the contract still needing a signature, the invoice a client asked you to resend, the intake form HR needs before nine o’clock.

A checklist can remind you these tasks exist, but it cannot tell you where the file lives, what format it needs to be in, or how many versions sit on your desktop already. That gap is why a document system matters more than one more app for tracking tasks.

The Piece Most Routines Skip

A to-do list can capture a single line such as send the signed lease, but the real work behind that line is gathering three or four separate files into one place first. A simple habit handles this well: before opening email, pull yesterday’s scans, forwarded attachments, and signed pages together into one working file. Open a PDF combiner to merge those pieces into a single document, and the visible task, actually sending the file, only takes as long as it should.

This is not just about signatures or contracts. Recurring items such as monthly reports, vendor invoices, and reference documents pile up the same way, and a five-minute pass each morning keeps them from becoming a bigger cleanup later in the week.

This is not a small pocket of wasted time either. The most recent Bureau of Labor Statistics time use data groups tasks like filling out paperwork together with other household management activities such as cooking and yard work, and finds that adults spend close to two hours a day on that broader category. A five-minute document habit each morning is a modest trade against that total, and it moves the drag to the start of the day instead of letting it bleed into everything after.

A Three-Layer System That Fits in Fifteen Minutes

A working system for morning paperwork does not need folders inside folders. Three layers cover almost everything:

  • Needs action today: Anything someone is waiting on, like a contract to sign or a form due before noon, gets handled first.
  • Reference only: Files you might need to check but do not have to touch, such as a signed agreement from last month, stay in a folder you can search instead of one you have to scroll through.
  • Archive: Anything finished and no longer active moves out of daily view completely, so it stops competing for attention with today’s work.

These three buckets take less time to sort into than most people spend deciding what to have for breakfast.

Three Small Habits That Make It Stick

None of this needs new software training or a rebuilt inbox. A few small habits carry most of the weight.

  • Keep one working file: Combine incoming pages into a single document each morning instead of juggling several attachments across separate emails.
  • Check who needs access, not just who has the file: Confirm the person waiting on a document (a client, a coworker, a new hire) can open it under their own account, since being able to share a PDF on any device matters more than which laptop or phone you used to finish it.
  • Close the loop by noon: Move anything finished into reference or archive so tomorrow’s list starts smaller instead of longer.

Each habit takes under a minute on its own, and together they keep paperwork from stacking up into a Friday-afternoon problem.

Different Roles, Same Morning Problem

The specifics change by job, but the underlying gap stays the same across roles.

Freelancers often start the day with three or four client threads open at once, each with its own estimate, contract, or invoice version, and a quick merge each morning keeps those from scattering across a downloads folder.

HR staff run into a version of the same problem multiplied across every new hire moving through onboarding at the same time, since offer letters, tax forms, and identification copies all need to land in one file before anything gets filed.

Designers hit it from another angle: client feedback often arrives as a photo of a printed mockup or a screenshot of a marked-up page, and turning those images into one proper document is the real first step before revisions can begin.

None of this calls for a full overhaul of how you work. It just means treating documents as part of the routine instead of an afterthought that shows up once the coffee is gone. Fifteen minutes spent sorting real files into a real structure each morning saves more time by lunch than another motivational routine ever will, and it is the difference between reacting to paperwork all day and starting ahead of it for once.

Continue Reading

Success Advice

The Psychology of Power: How to Win the Mind Games of Business

Published

on

Image Credit: Addicted2success

You might think that your business is driven by data, analytics, and perfectly optimized algorithms. But beneath the spreadsheets and KPIs, the business world is driven by something far more primitive: human psychology.

Robert Greene, the mastermind behind The 48 Laws of Power, has spent decades studying how top executives, historical figures, and entrepreneurs navigate strategy. His conclusion? Human behavior is compulsive, obsessive, and entirely predictable if you know what to look for.

Whether you are scaling a startup, navigating corporate politics, or trying to understand why a competitor is outmaneuvering you, success rarely comes down to who works the hardest. It comes down to who understands the social game. Here is a breakdown of Greene’s most potent strategies for mastering the psychology of business.

1. The Art of Concealing Intentions

Is honesty really the best policy in business? According to Greene, the answer is a resounding no—at least, not with everyone.

When dealing with your internal team, transparency is essential. A leader must have a clear vision and communicate it directly so the organization can execute without chaos. However, when it comes to your competitors, complete transparency is a fatal flaw.

If your rivals know exactly where you are headed, what your next product launch looks like, or what your strategy will be in six months, they will mirror you and counter your moves. The game of power is subtle. To win, you must keep your competitors—and sometimes even your clients—on their heels. By concealing your true intentions, you force your rivals into a defensive posture, leaving you in control of the offensive.

2. Why Silence is Your Greatest Leverage

In the corporate world, there is a misconception that the loudest person in the room is the most powerful. Greene argues the exact opposite: talking less creates an aura of power.

When writing The 50th Law with 50 Cent, Greene observed the rapper in high-stakes business meetings. 50 Cent would sit in absolute silence while others talked, causing everyone else in the room to over-explain, backtrack, and ultimately reveal their insecurities.

  • The psychology behind it: When you talk constantly, you signal insecurity and a lack of self-control.

  • The power of silence: When you remain quiet, people project their own anxieties onto you. They wonder what you are thinking. It makes you appear larger, more mysterious, and more authoritative than you actually are.

Every word you say should be strategic. If you cannot control your own mouth, you cannot control your environment.

3. Formlessness: Adapt or Die

Many leaders rise to the top based on a specific strength—maybe it is ruthless aggression, brilliant public speaking, or a populist touch. But holding onto the trait that made you successful is the fastest way to become obsolete.

Borrowing from Machiavelli and Sun Tzu, Greene emphasizes the law of formlessness. The business landscape is shifting constantly; what worked three years ago is likely irrelevant today. If you are rigid in your brand, your personality, or your strategy, the world will pass you by.

Consider a brand like American Apparel, which thrived in the early 2000s on a very specific, nostalgic, 1980s aesthetic. When consumer tastes shifted in 2009, leadership refused to adapt. They clung to the form that brought them initial success, and it ultimately led to their downfall. True power belongs to the leader who can reinvent themselves and change shape to fit the times.

4. Never Outshine the Master (Navigating Ego)

This is arguably the most critical workplace law to engrave into your brain: everyone has an ego, and everyone has insecurities.

If you are an employee working under a boss, your natural instinct is to work incredibly hard, do a brilliant job, and take all the credit to prove your worth. But if you try too eagerly to impress and you end up soaking up all the attention, you will trigger your boss’s insecurities. Unconsciously, they will start viewing you as a threat.

To survive and advance, you must master the nuanced art of letting the person above you take some of the glory.

  • Do the heavy lifting.

  • Present the wins.

  • Let your superior feel as though it was their visionary leadership that made it possible.

It might feel unfair, but reacting emotionally to this dynamic drains your energy. Accept that taking a strategic backseat is simply part of the power game. By stroking the ego of the person above you, you secure your position and quietly build your own leverage.

5. Despise the Free Lunch (and Appeal to Self-Interest)

In business, free is the most expensive mistake you can make. When someone offers you something for free, they almost always want something far more valuable in return. On the flip side, being cheap with your money—refusing to pay your employees well or constantly seeking a bargain—signals weakness and a lack of abundance.

When you need something from a powerful person, do not appeal to their mercy. Do not remind them of a past favor or ask for help out of the goodness of their heart. Instead, appeal strictly to their self-interest.

Powerful people lack two things: time and attention. If your proposal can save them time, organize their chaos, or solve a specific insecurity they have, they will be eating out of the palm of your hand.

The Ultimate Shift: Outward Focus

The single most important skill you can master in business is shifting your focus outward. Stop obsessing over your own needs, your own emotions, and whether people like you. Instead, become a master observer of the social game. Watch the trends, study your competitors, and fiercely analyze the unspoken needs of your clients. When you stop acting out of emotion and start acting out of strategy, the entire game changes.

Here is a powerful breakdown with Mark Brazil and Robert Greene

 

Continue Reading

Trending