Interested in learning from small businesses that make $100k or more a year?
The true definition of success for business owners varies, but one common marker that many strive to achieve is to have a small business that earns more than $100,000 profit annually. While there are some businesses that launched and skyrocketed, there are far more examples of companies that simmered a lot longer to reach that amount and beyond.
So how does one hit that goal and how long does it take to get there? The answers aren’t tried and true for all entrepreneurs, however several Hello Alice small business owners shared their real-life experiences, wisdom and advice.
Many Hello Alice founders share that being profitable involves more than just hard work, but also being clear and focused on goals and mission, respecting your time, paying yourself (and taxes), and making smart choices.
While it may seem obvious that if you want to make more than $100,000 profit, you should outline a clear path to get there. It bears repeating that it is key to outline your revenue structure. You need to really drill down into where your money is coming from, what you’re changing, and your biggest opportunities for growth. Also, in addition to the who is paying you what, when, how, and why, what is your long-term ability to sustain it and to also grow it?
Last Minute Gear
James Dong, owner of Last Minute Gear, a rent, borrow or own outdoor gear supply company, advises that finding a product or service that your customers are looking for is key. “Trying to do something completely new is more challenging because there is a consumer education component,” he said.
Don’t Be Afraid to Pivot
His company’s $100K+ success struck in his third year, but it involved a year where he had to pivot on the company’s original mission.
“I pivoted after the first year, but it wasn’t a true pivot because the first model wasn’t designed to make money. I was more trying to figure out whether it could be a community solution/nonprofit, but there wasn’t enough traction to even sustain that, so I pivoted to a B2C business model,” Dong said.
Before the pandemic, but even especially because of it – many companies are having to revise their model and that can be a difficult, but necessary step if you want to be profitable. “It’s hard to accept. Pivoting can feel like giving up on your baby!” Dong said. “My advice is to set hard deadlines for yourself when you need to pivot.”
Focus Your Efforts
Many small businesses that make $100K or more echo the sentiments that you also don’t want to “spread yourself too thin” and that it is important to “trim the fat.” It’s common for owners to take time to access which revenue streams serve their businesses and which don’t – especially if it requires a lot of time with a low return on your investment.
Award-winning chef Russell Jackson is a renowned restauranteur and activist who is currently operating his 7th food and beverage institution, the acclaimed fine-dining restaurant, Reverence, in Harlem. About two years into its opening, the $150K+ profit is a casualty of the pandemic and falls short of his business plans. In some ways, the business model that was “designed as a $2 million-plus operation” has been more like $150K and that came down to “grinding away on a day to day basis and making life choices and sacrifices” for the good of the business, the community and his team, Jackson said. “In my 38-year career…you make all kinds of plans and contingencies and nothing prepares you for this.”
Be Receptive to Guidance and Support
He says one keyword of advice for business owners is to stick to your mission, your truth and your convictions, however, you must “be willing to ask for help and be willing to listen.” He created a “Board of Advisors” to “have them talk me out of the bushes and out of patterns and old ways. I had to be willing to listen to people whose opinions I respect…I didn’t want “yes” [people], I wanted brutally honest people.”
His board of advisors reads like a star-studded who’s who – from renowned Michelin Star chefs, a Nobel Peace Prize Judge, a Supreme Court arguing attorney, restauranteurs, top marketing director – who are close friends, mentors and bring a diverse blend of business, operations, creativity and more to the table.
While your dream team may not resemble Jackson’s, he advises that you fill it with people you respect, who can provide difficult feedback when needed, help you think out-of-the-box, while still allowing you the space to always stay true to who you are and to stick to your convictions.
Stay Connected to Your Why
“Make smart decisions, not dumb ones,” Jackson states. “You have to think about why am I building it, What is the purpose? Is it my passion? Am I willing to do whatever it takes to be successful and willing to sacrifice? And, during that process, how do I protect my family, the investment” and look at building long-term generational wealth?”
Passion must be the key driver most small businesses that make $100K or more. To put in the work, time and stress that comes with developing a consistently growing revenue- especially with the challenges of COVID, a pandemic and dried-up capital streams.
“I’m passionate about the mission…I honestly don’t know what else I’d work on! Everything in my life comes back to issues of waste reduction and outdoor access,” James said.
He continued: “I heard this advice many years ago and it consistently stood out to me, “‘Think of your life like days of the week, so if you live an average 70 years, that’s a decade for each day of the week. Ask yourself: Where do you want to be Saturday night?’”