Top 4 Ways to Build a Business to $1 Million in Revenue
Content provided by the Women Presidents' Organization
By Marsha Firestone, Ph.D., President and Founder of Women Presidents' Organization (WPO)
Question: What are some of the successful strategies to build a million-dollar business?
Achieving the million-dollar revenue plateau is a business milestone to celebrate. Research shows that only 3% of all women-owned businesses generate $1 million plus in annual revenues. The good news is that the million-plus firms are growing faster than the smaller firms.
Businesses of the Women Presidents' Organization (WPO), a group of women business owners whose businesses generate $2 million or more if product-based or $1 million if service-based, have certain characteristics. A recent study conducted by the Center for Women's Business Research explores the business practices and characteristics of million-dollar women-owned businesses. Among other tactics, women owners of million-dollar businesses are more likely to:
- Use lawyers, accountants, consultants, advisory boards and boards of directors
- Secure contracts with large corporations and government as primary clients
- Apply sophisticated management practices on a regular basis, especially the use of financial reports to manage cash flow and expenses
- Take advantage of multiple funding sources, including vendor credit, credit card loans, venture capital and angel investing, bank loans and other financial strategies
- Have a professional, regularly updated Web site
- Engage in e-commerce and electronic marketing
- Become certified as a woman owned business
- Own businesses in the industries of: wholesale trade, construction, manufacturing, transportation, communications or public utilities
As the president and founder of the Women Presidents' Organization, which serves entrepreneurial women who have already achieved a certain level of success, I have encountered a number of strategies that I believe are essential for growing a $1M plus company.
1. Know Where You Want to Go
As the leader to whom others look for vision and inspiration, you must move away from the day-to-day business operations and gain perspective. Examine your company with the eyes of an outsider. Work on your business instead of in it. Begin with a written plan that will become a road map to help you move forward and grow your business.
Once you establish the vision, decide on specific business strategies to make that vision reality. Will you expand into new markets and gain new customers? Increase your repeat business? Franchise your business? Open a new location? License your product? Do not neglect to set up a measurement system to gauge monthly, quarterly, and annual results. Then make certain that the day-to-day tactics employed by your staff are connected with the long-term vision.
2. Clarify Your Uniqueness
A new product or service sells better when you can articulate exactly what makes it a desirable purchase as well as what differentiates it from other similar products and services. Customers will not change what they are already purchasing unless there is a really special attraction. You must be able to communicate exactly why your business is unique.
Clarifying your uniqueness can be key to growth. Sepi Asefnia, President of SEPI Engineering Group, says that when she founded her engineering firm in 2001, she had to compete with older, more established firms by finding out where she fit in and what she could offer that was unique. Sepi strived toward making her firm's proposals "flexible in price and remarkable in quality." She invested in technology. Her firm became known for its personal touch, superior results and distinctive, innovative designs. Today, Sepi counts among her loyal clients several of those she first started with. The million-dollar milestone? Yes, her firm achieved it.
3. Use Professional Advisors
In beginning a new business or in running a growing one, the tendency is to try to save money by not hiring legal and financial advice. Ultimately, this could be the most costly mistake a business owner can make. Starting out with the proper guidance can save thousands, perhaps millions, in the future, as well as ensure that you lay the proper foundation for your business.
Million-dollar business owners take advantage of professional advisors. Be open to learning and reaching out to others for information. Peer advisory groups are the best way for those who are growing their businesses to learn. A peer advisory group is not identical to a formal board of directors. The difference is that a board of directors has legal fiduciary obligations; an advisory board makes recommendations and gives guidance.
Amy Birnbaum, CEO of Royal Coachman Worldwide, credits her WPO peer advisory group with promoting her personal growth as well as strategies for growing her business. "I have met and befriended some incredible women with amazing expertise who have advised me on business strategies and issues," Birnbaum says. "I also find it very gratifying and exciting when I can be of help to others."
4. Focus, Focus, Focus
As you grow your business, retain a focus on where you want to go. Although you may have wonderful ideas for expansion, for new products and for new markets, you may not be financially able to take those strategic steps until later in the life cycle of the business. My recommendation is to grow the business in stages, making sure that you do not take on too many simultaneous goals. As you succeed with each stage, there will be other opportunities to broaden your horizons.
As the president of a business poised for growth, you must decide what matters most and how that insight can contribute to expansion. Next you must create and tell this "story" of your company to your employees in a meaningful, motivating way. Your people must see your goals as clearly as you see them. Finally, you must continually sharpen the vision and strategy of your company so that planned growth over time becomes an achievable goal. Look at your roadmap and business plan and revise them regularly.
About Marsha Firestone, Ph.D.
Dr. Marsha Firestone is the founder and president of the Women Presidents' Organization for women whose businesses annually gross over two million dollars. Dr. Firestone was previously Vice President of Women Incorporated and of Training and Counseling at the American Woman's Economic Development Corporate (AWED). Her career also includes positions as National Executive Director of the Women's American ORT, a volunteer organization with a membership of over 150,000; a full-time faculty member of the American Management Association Competency-Based Management Development Program; and a faculty member at the City University of New York and Adelphi University. In March 2000, Dr. Firestone was appointed to the National Women's Business Council, which reports to the President and Congress on issues of importance to women in business and was part of the official delegation to the Overseas Economic Development Council in Istanbul, Turkey. Dr. Firestone was Executive Director of The Women's Economic Summit whose work resulted in a master plan for accelerating the growth of women's business and was presented to Congress and the public in March 1999. Dr. Firestone earned a Master's degree in Communication from Teacher's College of New York, as well as a Ph.D. in Communication from Columbia University.
The Women Presidents' Organization (WPO) is a membership organization whose members are a diverse group of entrepreneurial women presidents who have guided their businesses to generate at least $2 million in gross annual sales or $1 million for a service-based business. Each WPO chapter of this nonprofit organization serves as a peer advisory group and empowers members to achieve increased business and financial success, as well as individual growth. Local chapters are coordinated by a professional facilitator who organizes meetings of the peer advisory group to focus on important business issues and cutting-edge business trends. The Women Presidents' Organization is unique in that it connects top women entrepreneurs locally -and internationally - with greater personal and professional success. WPO member businesses have an average of $12 million in annual revenues, 113 employees and 18 years in business. For more information, call 212-688-4114 or visit the website.
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