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For more than 25 years, I've been building businesses from scratch.
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I've had seven startups that went from zero to a million in revenue in under 12 months.
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On top of that, in the last 15 years, I've worked with 5,000 companies
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that are somewhere between the ideas phase to exiting for a life-changing amount of money
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and everywhere in between.
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And what I've discovered is that there are seven levels.
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And the more you understand the seven levels that you're going to go through in your business,
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the more you can plan, prepare, learn the skills that you need and start advancing more quickly.
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It's a little bit like professional sport.
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We all start out at the beginner levels and then we go and graduate and graduate and graduate.
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And then we find ourselves playing at a more professional level.
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Entrepreneurship's just the same.
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And I want to share with you some experiences from each of these levels.
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So level one, revenue wise, is typically zero to $10,000.
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Now, this is what I would call the side hustle level.
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For me, my side hustles were nightclub parties.
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When I was 18, 19 years old, I started running these nightclub parties at the local nightclub.
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I got them sponsored by McDonald's and the local council and the local radio station.
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And each night that I ran one of these, I made a few thousand dollars.
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It was an incredible way to get an experience as an entrepreneur and to feel what it feels
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like to bring an idea into reality.
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One of my other side hustles when I was 18 years old, I bought a hundred roses for $40
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and then I wrapped them individually in tissue paper and I took them door to door dressed
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in a tuxedo and I sold them for $400.
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So in one day I turned $40 into $400.
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It happened to be Valentine's day, but it was a great fun way to make a few hundred dollars
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just by going around the local neighborhood.
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Side hustles are not about money or big scale success.
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Side hustles are about stories and confidence.
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You're getting the confidence to say that you are a doer,
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not just a thinker or a dreamer.
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You're getting the experience that you need to go to the next level.
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What I want you to do is spot a problem, any problem,
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think about how you would solve it
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and see if you can approach someone and get paid to solve it.
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It's that simple.
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It could be that you spot a dirty car on the driveway that needs washing,
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make some money doing it.
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It could be that you spot a friend who wants to sell some stuff but doesn't have time to
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mess around on Facebook Marketplace.
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Take it over for them.
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Side hustles are not about like what you're going to do in the future.
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Side hustles are just spot a problem, come up with a solution and get paid for it.
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That's all you need to do.
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The next level up is a trap.
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It's the $10,000 to $100,000 mark.
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This is the zone of the self-employed solo operator.
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Now, me personally, I've not spent much time in this zone at all because ultimately, the
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more time you spend here, the more you're going to get stuck. Essentially, what you're doing is
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selling time for money. You've got a skill set and people are paying you for it. It's a bit like
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having a job, but rather than having one boss and one employer, you've probably got three to six
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bosses or employers. If someone was to observe you, it's almost indistinguishable from being
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an employee. And it's such a trap. As fast as possible, we need to get into this next zone,
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which is the 100 to 500,000. Now, a lot of you will think, well, what's the skill here, right?
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Signing up retainers, getting people to do this. I don't want you to have those skills because the
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more you have those skills, the more you'll get caught in that trap. Had I finished university,
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had I got some really great skills, I would have got stuck in the 10 to 100 grand for
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several years as well. It's actually because I don't have any technical skills that my businesses
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have grown so fast. Because when I want to get anything done, I have to delegate it. I have to
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get somebody else to do it. Now, once you go to the next level up, 100,000 to 500,000, now you're
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in the space of being able to delegate. And there's one thing in particular that you're going to get
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good at delegating, and that's called the supply side of what you do. See, here's the thing. Every
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business has what's called a demand side and a supply side. The demand side is how you win
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customers. It's how you generate leads and make sales. The demand side is how you get people
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excited to work with you, how you differentiate yourself, how you position yourself in the
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marketplace. That's all about winning business. The supply side is how you delight customers.
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It's how you deliver upon your promises. It's how you do what you said you were going to do.
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Now, the entrepreneurs who succeed the most are the ones who are very focused on the demand side
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of the business and rarely the ones who are very focused on the supply side, with some notable
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exceptions. I want you to write this sentence down. And the sentence is, my business exists
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not because I have something to sell. My business exists because I have somebody who wants to buy.
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Your job as an entrepreneur is to position you and your business as the gateway to a high value
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outcome. The more you can be selling that outcome and delegating how that outcome happens, the better.
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So once you're in the business of relationship management and sales management, now you're
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probably going to be in the $100,000 to $500,000 role. This is where you are essentially a sales
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and marketing expert with a team of people who can help with the delivery. You are focused very
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heavily on lead generation and sales, and you've got some people and systems that you can delegate
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to But the problem that you going to have at 100 to 500 is that you just not seen as special At 100 to 500 you going to be seen as commoditized You going to be competing on price and people are going to be buying from you because you cheaper than others You going to be flying under the radar as a small business
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and you're going to be saying, hey, we can deliver that at a fraction of the price. And that is great
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for winning initial business, but it's not great long term if you want to scale up beyond this phase.
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So the biggest trap at this particular point is the trap of being too focused on the product and
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service and the physical place of doing business. So when you get stuck as we do these services in
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these locations, that means you'll get stuck very quickly. You'll tap out the maximum size of your
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market pretty quickly. It also means that you're in a red ocean. You're going to be competing with
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all sorts of people who sell the same sorts of things in the same locations. And you'll also be
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competing with those Silicon Valley entrepreneurs who have a global business model who they can sell
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to your customers, but you can't sell into their markets. At the next level up, we redefine the
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business. We're no longer products and services in a particular place. We redefine as intellectual
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property for an ideal customer persona. It's the IP meets the ICP that really changes the business.
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Now, the IP is your methods, your case studies, your stories, your insights into your market,
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your data. It's all of the things that is unique understandings that your business or you have.
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And your ICP is your ideal customer persona. It's the person who sees value in what you do.
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So imagine this. Imagine you had a business coach who said, I offer business coaching,
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and they define themselves as operating in New York City
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and they say, I'm a business coach in New York.
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Imagine how much money extra they would make
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if they said, I'm an expert in scaling a software business
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from five to 50 million
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and I can work with any software business in the world
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provided they've already achieved 5 million
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but they're not yet at 50 million.
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Now that is gonna open them up to a huge number
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of customers anywhere in the world
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who want access to that intellectual property.
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They wanna know how to do it.
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They wanna have someone who comes in and supports them.
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By redefining their business,
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not by what they do and where they do it, but what they know and who they do that for and who
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sees value for that. They've already made that first shift. Now, the third thing that really,
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really moves at the needle, a key person of influence. See, at 100,000 to 500,000,
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you're essentially a sales and marketing person. You are one of the boots on the ground. But when
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you get to 500,000 to a million, this is where you can really establish your personal brand. Or
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you can have what's called an associate key person of influence, where you bring someone in
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to play the role of being the key person of influence. It could be a partner, it could be
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a speaker, it could be a mentor, a board member or a board advisor. And this person has a lot more
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credibility that really embodies this intellectual property for this ideal customer persona. At this
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level, this is where you're starting to show up more on social media. This is where you might have
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a great website and you may even release a book that demonstrates that you've got this intellectual
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property for this type of person. Laying those foundations is going to get you past that first
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seven figures worth of revenue. Now, for me personally, this is where I used to jump straight
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in in my 20s and my 30s. I would hire a big name person to become the figurehead of the business.
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They would always have written a book. They'd be great on stage as a public speaker. They had
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intellectual property and they had an ideal customer persona who loved what they were doing.
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And what my business was doing is partnering with that person to commercialize them in new markets.
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And it was so easy to make a million of revenue very, very rapidly because of their brand,
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their IP and their connection with the market. We could just launch them into new markets
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and make lots and lots of money.
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I was working with proven people who had proven ideas
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and just taking them into new markets
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and very easily making seven figures worth of revenue.
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And it also helped me to build my brand.
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Now, here's where everything went bad for me.
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In the global financial crisis,
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the two biggest names that I was working with,
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they pulled out from working with me
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because they wanted to focus on their home markets.
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I had one guy who was based in Texas
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and one guy who was based in Singapore
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and I was launching them in the UK.
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Now, both of them in the global financial crisis
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said they wanted to focus on their own business in their own location, and they didn't want to
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do the partnership with me anymore. And what I discovered at that point is that I had to start
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from scratch because none of the assets that I had were my own. So in the one to five million range,
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this is where your business starts to own its own assets. I would call this process
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formalizing assets. This is where you're going to formalize your brand. You're going to formalize
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your intellectual property. You're going to formalize your own channels to market. You're
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going to create your own products and services, and you're going to package them all up. This is
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where you'll have your team and culture formalized. You'll probably create an employee handbook that
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explains what it's like to work in your organization. What are the standards? You're going to create
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systems and processes, and that is going to be a type of asset for your business as well. An asset
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is anything that adds value to your business without you having to physically be in the room.
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Think videos think documents think systems think code think intellectual property This is where you really formalizing unique assets that your business owns The next thing that you going to do here is that you are going to have a dedicated head of marketing whose only focus is maintaining a flow of new business
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That person's going to be even better than you are at opening up new channels to market.
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They're going to be excellent at social media.
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They're going to be good with advertising.
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They're going to be great at creating marketing journeys.
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And they're going to work with your head of sales.
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So in the early days, all the marketing and sales fell on your shoulders.
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But today you've got two world-class people who are heading up marketing and sales and there's just this steady pipeline.
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There is something phenomenal that happens when you get a few great salespeople on a team who have ready access to warm leads.
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When you've got lots of warm leads that go to the right people, the money just starts to flow.
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Your role is going to be more of a figurehead.
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You're going to be seen as a key person of influence in your industry.
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You're going to elevate your position and you're going to do that so that you can hire amazing talented people and that you can do joint ventures and partnerships with others in your industry.
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For me personally, as soon as I'd formalized my assets, built myself as a key person of influence, brought on amazing talented people in marketing and sales, all of a sudden things started to rapidly ramp up.
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In the early days, it feels so hard to go from $100,000 to $500,000.
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Once we're up here, we can go from $1 million to $5 million in about the same period of time.
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Now, what it feels like to have a $1 to $5 million business is what you will later call the good old days.
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This will be one of the most fun times in business.
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The money's flowing and you typically have a team of around 6 to 12 people.
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You typically solve problems by going out to lunch, having a pizza together, drawing on whiteboards, just having chats.
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In this phase of business, you're surrounded by people who are true believers.
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They love the business as if it's their own.
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There's a lot of fun, vibrancy.
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It's a very flat structure, but you also have budgets.
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You can throw some money at ads.
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You can throw some money at a new website.
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The money's flowing and the team is small.
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And this will be one of the best times when you look back at your entrepreneurial journey.
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This will be one of the times that puts a smile on your face.
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Okay, now we're at 5 to 10 million.
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There could be a trap around this point.
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And the trap is where you're too big to be small and too small to be big.
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And this is one of the reasons that a lot of businesses get close to 5 million and then
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go back down to a million, back up to 5 million, back down to a million.
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This is a regular trap.
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The business just cannot afford to invest in the things that it needs in order to be
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a big business.
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So I call this crossing the desert.
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It's a very difficult time. You really have to grow up as a business. You've got to be analyzing
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data. You may have to get your hands on some debt or some investors. You may have to let some people
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go that you were incredibly loyal to because they were so great at the start. In the early days of
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your business, you're going to be working with a lot of generalists who can do multiple different
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things. They're Swiss army knives. As you become a bigger business, you work with phenomenal
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specialists. So one of your great generalists doesn't fit within the organization anymore
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because they're not a specialist in anything in particular.
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Crossing the desert is an incredibly difficult time in your business
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and you need to make a decision.
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Do you want to deliberately keep your business small,
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8 to 12 people?
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Or do you want to cross the desert and hit 30 people?
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Because at 30 people, you're a much more grown-up business.
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Now you've got a five-person executive team.
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You've got a CEO, a CTO, a CFO, a COO, a CMO.
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You've got all of these people who run the different parts of your business.
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You've probably also got a board.
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You may have an executive assistant.
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You may even have a head of people.
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That executive team is a group of leaders who run the business, but they're not hands-on
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typically themselves, which means they each need a team of people to get things done as well.
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So now you're going to have a growth team that does marketing and sales.
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You're going to have a product development team, a customer success team.
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You're probably going to have a data team.
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You'll have a finance team.
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And all of those teams of teams report into your executive team.
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At the smallest scale, this probably requires having about 30 people all up.
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Now, once you've got those 30 people and they're aligned and they're having really great meetings and they've got really great dashboards and they've got resources and they're measuring the right things and executing on the right things, it's very easy for you to make the jump from five to 10 million.
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That can actually happen in a matter of months.
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The experience is that you've been hitting a brick wall and hitting a brick wall and hitting a brick wall for maybe as long as years.
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And then suddenly everything clicks into gear and all of a sudden it's whoosh.
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You're now a bigger business.
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You're a more professional business.
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You can't believe how grown up it feels to be running this bigger business now.
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This is a business that has formalized assets.
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It has a great team.
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Everyone knows what they're doing.
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And we're hitting that magical number of 834,000 a month where we're on track to hit 10 million for the year.
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Now we've crossed the threshold.
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We're a $10 million plus company.
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What does life feel like?
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Well you are now a figurehead and a founder of the business but you surrounded by overlinks You surrounded by people who respect and admire you even though they better than you You now managing bigger budgets Numbers that used to make your head spin are just part of the normal day
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The amount of cash that's sitting in the bank
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is more than the revenue that you used to fantasize about.
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In any given month, your business might win an award,
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hire an amazing person,
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you might be engaged in one or two legal disputes
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at any given time, and that's no longer a big deal.
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You've seen it before, you know how to handle this stuff.
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Your business might have debt, and it's totally fine.
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you know how to service it, it's not a big deal. Your business might have investors,
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and that's fine too. You have regular shareholder meetings, you update your shareholders. It's not
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difficult because all the data is ready to hand. At this level, you're starting to think like a
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business owner. You're not really in the business as much as you're on the business. There's a few
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things that you're going to start talking about. You'll start talking about something called
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quality of earnings. Quality of earnings is where you make a distinction between really high quality
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customers that are profitable and recurring and have predictability versus low quality customers
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that provide revenue, but it's not exactly the right type of revenue you want to develop upon.
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You might make decisions to get rid of whole sections of your business because the quality
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of earnings are just not there. Unfortunately, the business will no longer feel like a happy
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little family. It will be a high-performance team at this point. It will be very unlikely that people
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order a pizza and hang out on Friday afternoon. People turn up at work, they do a great job,
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and then they go about their lives. When you hire someone, you'll go through a proper hiring process
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at this point. There'll be dozens of great candidates to choose from. In the early days,
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you hired anyone who could breathe, anyone who had a pulse, anyone who shared your passion.
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Now you hire people with amazing skills, talent, expertise, and a background to prove it.
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One thing that may start to creep into your mind at this point is, what's my business worth? You
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might think about the valuation of the business. You might think about who might buy the business.
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Would it be valuable to a strategic acquirer? Would a private equity firm buy the business?
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Would someone want this business as a trophy asset? Would your executive team want to do
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a management buyer? All of those questions might come up. And some of the decisions that you make
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will be about valuation maximization. At this point, you'll probably be doing some acquisitions.
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You may even sell the whole business, which gives you an exit. It could be a life-changing
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amount of money, or it could just free you up to go back to the fun thing that you love,
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which is starting from scratch and starting a brand new thing. So now we've hit 10 million,
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you've got a great valuation, you might've sold the company, but a lot of people want to know,
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Is it really, really worth it? And the answer is absolutely yes, but only if you really love doing
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business. See, here's the thing. There's a lifestyle business and a performance business.
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A lifestyle business typically exists high six, early seven figure revenue with a team of six
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to 12 people. It's self-managing. It's fun, freedom and flexibility. You can run it from
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anywhere and you can say no to things that you don't want to do. You can really focus on a high
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value niche and you can keep your costs low and maintain that flexibility that anyone could say.
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yes. There is no question in my mind that a lifestyle business, almost anyone could achieve
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it and almost everyone would enjoy it. Going beyond that and ending up with a $10 million
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business, you kind of have to be a business geek. You're only going to enjoy that and it's only
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going to feel worth it if you actually enjoy geeking out on business. If you enjoy board
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meetings and if you enjoy looking at data and if you can do the hiring and acquisitions and
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lawsuits and all of that stuff, if you can enjoy all of that part of the journey, then yes, it's
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going to be worth it. If that's not you, you'll probably find that the juice was just not worth
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the squeeze. If you love what you do and you love business, go all the way, build a performance
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business, get to eight figures, build out your team, sell it for a life-changing amount of money
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and do it multiple times over. There's actually not many sacrifices that you make when you've got
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a lifestyle business. You're going to have a nice home. You're going to take nice holidays. You're
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going to drive a nice car. Everything's going to be really nice. You're going to get the eight out
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of 10 for almost everything you touch. You're operating at a point where the juice is definitely
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worth the squeeze. Now, does it all go up a level when you've got a million a month coming in? Of
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course it does, right? You get invited to fancy places and you go to really fancy hotels sometimes
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and you drive really fancy car if you really want one. And you can kind of say yes to some of the big,
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exciting status orientated things if that's your jam. What you'll probably discover is that you feel
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different about those trophy assets than you originally did. See, one of the things about
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something like a Ferrari is that it's way up on a pedestal and it's like so far out of reach.
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And then for the people who end up buying one, it's not that big a deal, right? So it can actually
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lose its appeal. If you've enjoyed this video, learning about the levels of business and how
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to accelerate through them, there's one thing that is the biggest cheat code and that's called
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founder-led growth, positioning yourself as a key person of influence. And I recorded this video here
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about achieving micro fame in your industry. That's the one to watch next. I hope you're
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doing really well. I hope that your business is succeeding. See you soon.