According to Entrepreneurs Circle, fewer than 1% of people who start a business become millionaires, and fewer than 4% of businesses ever reach £1m in turnover, which is usually what it takes. In my experience there are two reasons. Some owners simply don't want to, and that's fine. The rest trip up, usually because they're thinking the wrong way about the business, money, failure or their website.
Not everyone wants a million, and that's fine
I've worked with clients who simply want their business to bring in a reliable few thousand pounds a month. That's their version of success, and they're happy with it. No private yachts needed.
Where the rest go wrong
Plenty of owners start out with big ambitions to reach seven figures and beyond. Somewhere along the way, it doesn't happen. Usually it comes down to one of four things.
1. Thinking about the business the wrong way
Can the business actually make spare cash for the owner?
- Are your products or services priced and positioned correctly?
- Is the business built to grow, or does everything depend on you?
- Do you have the right team in place to make growth possible?
2. Thinking about money the wrong way
Do you know your numbers?
- What does it cost to win a customer?
- How much can you afford to spend to win one?
- Is your marketing budget enough to bring in the sales you need, or too little?
See what it would take to double your profit.
3. Thinking about failure the wrong way
When something doesn't work, it doesn't always mean the idea is wrong. Often it's how it's being done.
- Are you measuring the right things?
- Are you adjusting and improving, or giving up too soon?
See why service businesses stall.
4. Thinking about your website the wrong way
A common mistake for service businesses is trying to sell the service on the website. If people need a meeting before they buy, stop trying to sell the service. Sell the appointment instead. It's a small shift that can make a big difference. See would your website pass the logo-swap test?
There's no single reason
The list of possible pitfalls is long. If you don't want to reach £1m, that's absolutely fine. Many owners don't. But if you do want to get there and you're not there yet, start with the four areas above.
Frequently asked questions
Do you need a £1m business to become a millionaire? Usually, yes. If a business isn't turning over around £1m, it's very hard for the owner to build that kind of wealth from it.
Why do most businesses never reach £1m turnover? Some owners don't want to, and are happy with a business that pays them well. For the rest, it's usually pricing, not knowing their numbers, giving up too soon, or marketing that tries to sell the wrong thing.
Want help reaching the next level?
Whatever the next level means for you, book a free strategy call and we'll work out what's holding you back and what to do first.