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Top 10 Lessons for Launching a Million-Dollar Business

July 31, 2018

By Brett Farmiloe

Two years ago I was a digital marketing freelancer who had just gotten my website to rank on the first page of Google for the term, “digital marketing company.” 

Since then, I’ve helped lead our company past the seven figure mark in revenue and now work with 15 employees and clients in four continents. 

There’s been a lot of learning lessons in the last two years. The experience of creating a company that was named one of the best places to work in Arizona has been one of the most challenging, yet beautiful things I’ve done in my career. 

With that said, I’d like to share 10 of the top lessons I’ve learned while launching a $1 million business. I hope that some of these lessons help you prioritize and focus on the things that really matter – amongst all the chaos that happens within the confines of a startup.     

Lesson 1: Prioritize Profit & Cash Flow

Profit is the first priority. And for far too long, I made more money as a freelancer than I did a CEO and owner of a 10-person company.

Lots of hours analyzing spreadsheets and making tough decisions from those spreadsheets are necessary on the way to achieving seven figures. A business just can’t operate without positive cash flow and healthy profit margins.

Sounds like a lesson straight out of Thunderbird, but for good reason. Make the dollars and sense the first priority.

Lesson #2: Seek Stabilization

Small businesses go through chaotic periods. There’s continual cash flow challenges. Employee turnover. Inadequate profits. A single day, misinterpreted speech, or poor-timed moment can send a company into a tailspin. It’s crazy.

To grow, you need a solid foundation. Solve the cash flow challenge. Identify why employees are leaving the company and fix the issues. Generate adequate profits. That way, when chaos threatens to shake things up, your foundation is built to withstand the storm. 

Stabilization is a basic human need. Satisfy the safety factors first so people can do their best work.

Lesson #3: Eliminate Laggards to Get to Market Faster

Some services suck the profit out of your bottom line. Other services can suck the life out of your employees. And sometimes, employees can suck the life from your organization. 

Define what adds to the bottom line and the employee experience. That’s usually the stuff that’s working best within your organization. Then, cut out the stuff that isn’t fun for anyone so you can do more of the stuff that works. And do that quickly so you can get to market faster than the competition. 

Lesson #4: Employees Need to See How They’ll Grow

Our business has grown quickly. People need to see their careers grow just as quickly – if not quicker.

We created a standardized career Level System that clearly defines how employees are promoted within our company. The system defines promotion criteria and learning milestones that come with associated advancements. 

This system gives people a path. People need a path, and as leader, it’s up to you to pave the trail. 

Lesson #5: Find the Right Landlord

Shout out to our landlord.

Yep, our landlord. Our relationship has been one of the luckiest things to happen to me as an entrepreneur.

Why? 

We’ve moved offices four times in 18 months to keep up with our headcount. Our landlord has allowed us to break our lease every time and welcomed us into his next building. 

Companies can be crippled with the wrong office lease. Finding the right landlord with the right inventory and the right terms gives a company the freedom to grow while maintaining the positive office vibes. 

Lesson #6: Improve Your Organization through Referrals

Not only has our landlord hooked us up with office space, but he’s introduced us to some of our best clients as well. 

Referrals are typically associated with improving sales, but they aren’t reserved just for new clients. The right referrals can extend to the right lawyer, insurance broker, employee benefits broker, accountant, financial advisor, and many more valuable professionals you need on your team. 

You can only go so far alone. Your network, and the valuable people within it, enable you to move faster through the speed of trust. 

Lesson #7: Clearly Define Job Descriptions

Job descriptions provide clarity for everyone. Hiring managers know what they are looking for in candidates. Employees know where their job ends, and another job responsibility begins.

Having transparent job descriptions within an organization communicates expectations and defines boundaries. That stuff is needed. Definitions eliminate making the wrong hires, creating roles that eat into profit margins, and reducing productivity.

Take the time to write and communicate job responsibilities at all levels within an organization. 

Lesson #8: Get Professional Liability Insurance

Cover yourself. Mistakes happen. You don’t want to pay for that mistake more than you have to. 

Lesson #9: Centralize Knowledge

Dealing with the cost of lost expertise and knowledge when employees leave is rough. When you’re a small team, an individual is responsible for a lot of things. When that person leaves, you lose it all the moment they walk out the door.

That can’t happen. Knowledge needs to be centralized and improved with time. There needs to be multiple team members who can step in to make sure the business and the customer don’t experience an interruption in service. 

Lesson #10: Evolve Your Org Structure

We’ve switched our org model three times in two years. The first shift needed to take place when we needed two cars to go to lunch as a team. The second when we hit double digit employees. The latest iteration happened when we needed to improve our profit margins. 

Models evolve quickly with the growth stages of a company. It needs to be managed as much as the people within the model. 

Those are 10 of the high-level lessons I’ve learned in two years as a CEO. And you know what’s funny? Despite the premise of this article – getting to seven figures – only one of these lessons really relate to money. 

I guess the ultimate lesson here is that if you focus on doing the right things as a leader, and get disciplined on building a great organization, the money takes care of itself.

Thunderbird alum, Brett Farmiloe

 

Brett Farmiloe is the Founder & CEO of a digital marketing company and an advisor to Organizational Leadership Degrees. Some career highlights include helping the actor Hugh Jackman launch a charitable coffee company (acquired by Keurig), and delivering over 100 speeches from Alaska to Miami Beach around leadership and careers.

 

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