The 12 Secrets to Reaching the Magic $1M Mark
by Julie Lenzer Kirk

Less than 5% of businesses owned by women ever realize annual revenues over a million dollars. Why is it so hard and how can you build a business that surpasses the million dollar mark?

Taken from my upcoming book The ParentPreneur Edge, which includes my own personal experiences and those of other companies who have surpassed the Magic $1M Mark, I have identified 12 secrets successful million-dollar-plus companies have in common that seem to be missing in those that can't quite hit the mark.

1. Know your market. What are the dynamics of the market you are selling into and is it growing or shrinking? Is pricing based on value-add or are your products/services becoming a commodity? What are the typical profit margins? Who are your competitors and what do they offer? Make sure it is growing, the profit margins are good, and you are positioned accordingly.
   
   
2. Know your customer. If your business targets are all women or any business, you do not know your customer. Not all women have the same needs, wants, and desires. All businesses don't operate the same way or value the same things. In order to catapult your business, you need to know intimately what your customer wants. The best way to determine this is through in-depth primary research and you have to talk to them. Get inside the head of your customer and when you know how they spend their day, you'll be well on your way to locking them in on a sale.
   
   
3. Know what need is being met. Most successful companies are meeting a need or solving a problem that their customer acknowledges as being an issue. Not only do you have to meet a need, but it has to be a need that the customer is willing to pay to have met. Interestingly, you could be meeting different needs for different customers so make sure you talk to a wide variety of clients.
   
   
4. Know why your customers buy your product. You might be surprised when you ask your customers why they buy from you over other alternatives. Asking them can reveal differentiators you didn't know you had. You will be better able to position your products or services in the minds of future customers when you know where you sit with current customers. Also, when you describe the features of your product or service you can match that with the benefit the customer receives from each.
   
   
5. Know why potential customers don't buy your product. Equally as important as knowing why people buy from you, find out why they don't. The information you uncover could highlight a customer need or a competitor offering you didn't know about. Whatever the outcome, you will gain valuable insight into your customers buying habits that can help with future prospects.
   
   
6. Proactively manage your cash flow. Once you have revenues coming in, it is crucial that you continue to maximize your use of your cash. Don't believe paying your bills early makes your credit look good, you are only sabotaging your own money-making ability. Keep your money as long as you can and get money from those that owe it to you as soon as possible. This means negotiating good (quick) payment terms from customers, good (long) payment terms with vendors, and never paying a bill before it is due.
   
   
7. Hire the best people, even if you have to pay them more than you are making. Research shows that the success of a company is largely centered on the execution. The execution of your business idea centers not only on the plan but also on the people you bring on board to execute it. Hire people that are smarter than you are, and don't hesitate to pay them more. Your interests, as the business owner, are long-term and if you do it right, will pay off in the end.
   
   
8. Exceed your customers expectations. The first step in incredible customer support is to set and communicate expectations. Many a relationship (and customers) has been lost over this one issue alone. Once expectations are set and understood by all parties, you must over-deliver. Exceed the customers expectations and you'll have them coming back again and again.
   
   
9. Know how you are different and be able to convey that effectively to the customer. Customers need to have a reason to buy from you. If they don't comprehend or value what you have to offer that is different, what you perceive as your differentiation really isn't. The customer must acknowledge that differentiation as something worth buying.
   
   
10. Build on your success. The least expensive customer to sell to is one that you have already sold to. You must build within your customer base repeatable success. Once you have a loyal customer base, turn them into your best marketing weapon. Ask them directly for referrals and get them to talk about their success with your firm to others. One company I interviewed in my book takes this a step further by delivering "remarkable" customer service, it is so good the customer remarks on it to others without prompting. There is no more effective marketing tool than a customer that is a raving fan.
    
    
11. Practice "Focused Flexibility". Although it sounds like a contradiction, Focused Flexibility is really about keeping your peripheral vision intact. It focuses ahead on your goals while not ignoring what is happening on the sides. Know where you are going, but don't discount the changes in your markets, the economy, or your competition or you risk being blindsided.
    
    
12. Use outside advisors. Hands down, one of the practices of successful, growing businesses is to engage with a board of outside advisors. It is not hard to find people that are willing to help you grow your business, without payment initially, by just asking. Make sure you recruit people to your board who are willing to tell you what you need to hear, not what you want to hear, and have the expertise and experience that you do not.

Note that no where in the above list did I say that you had to have the best product or service in the market. While having a good product or service is necessary, it is not sufficient. If the customer does not perceive your goods to be of value, or if they have never heard of you, it doesn't matter how incredible what you do is. If not enough people are buying or you don't have enough cash to pay bills, your company will never be able to reach that Magic Mark.

Julie Lenzer Kirk, an award-winning entrepreneur and mother of two, grew her business to multi-millions in revenues while raising her family. She cashed out of her company, Applied Creative Technologies, Inc., and now teaches entrepreneurship at the University of Maryland. She is the author of The ParentPreneur Edge: What Parenting Teaches About Building a Successful Business (Wiley, June 2007).
 
To contact Julie, call her at 301.916.5126.

 

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