International best-selling author and business coach William R. Patterson provides insights to help build your million-dollar business in part four of an in-depth interview for The Urban Wall Street Project with Earl Christian III.
To reach any significant level of success, every small business owner should have a business coach to help them avoid many of the hurdles and pitfalls that exist and rapidly build their business with integrated turnkey solutions.
If you have the goal of building a "million-dollar business," it is important to clarify whether you are talking about a million dollars in revenue, earnings, or owners' equity. They mean different things and can be achieved with different strategies.
Here are key points to keep in mind:
From a planning standpoint, your business model and exit strategy are important factors that will determine the speed at which you can build your business.
There are many entrepreneurs who are not looking to create sustainable businesses, only companies that they can eventually sell to larger players in the competitive space. This requires a different level of skill and planning than a sustainable business.
It is also important to clearly define your exit strategy when you start your business, and whether you will "cash out" of that business by automating it, creating franchises, an acquisition, Direct Public Offering (DPO), Initial Public Offering (IPO), etc.
One option for quickly creating a million-dollar business is to take your idea and develop it into a proven business model, then sell stock to accredited investors. This gets you to a million dollars in capitalization without necessarily having the revenue or earnings to support it. As you saw during the dotcom era, there were lots of businesses with billions of dollars in capitalization and little-to-no earnings. This is great for the founders and investment bankers, but does not mean much for new shareholders.
It also becomes a lot quicker to get to a million dollars in capitalization, revenue, or earnings if you are doing large deals and selling high price, high margin products and services.
From an operational standpoint, your management team, advisors, and strategic partners will be key.
It is important to note that one's ability to build a million-dollar business is completely different from one's ability to sustain it, particularly in the face of competition. It also takes a different level of skill to run a million-dollar business, versus a ten million-dollar business. Most entrepreneurs are not prepared or equipped to grow the business beyond a certain point.
For this reason, when private equity or venture capital firms acquire a small business, it is often necessary to replace the entire management team because the business has grown beyond their ability to manage and/or to make attractive to a large pool of investors.
For the small entrepreneur, everything becomes a lot faster, easier, and more stable with the right mentors, advisors, and strategic partners. Most entrepreneurs are trying to do too much with too little knowledge. They also do not have a well thought-out business model or the right strategic partnerships in place.
Ultimately, business success revolves around four things:
Developing a proven business model
Recruiting experienced management
Forming strategic partnerships
In THE BARON SOLUTION, we teach the BARON 25 keys to building a successful business covering the following areas:
Business concept development
Forming entities and financing your business
Branding, marketing and selling effectively
Tapping into additional sources of revenue
Developing the proper exit strategy for you and your investors to "cash out" of the business
THE BARON SOLUTION integrates over 200 business and financial accelerators to help dramatically improve the profits of your small business. Operating without this knowledge, puts an entrepreneur at an extreme disadvantage and in a position where the probability of failure is very high. Whether you are building a million-dollar business or a billion-dollar business, always leverage your time and money by using the knowledge of experts and proven business models.
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