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NOTABLE! The MAIN difference between someone who makes 100k /year and someone who makes 1m?

Discussion in 'General Entrepreneur Discussion' started by Fox, May 10, 2019.

  1. Fox
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    Fox Moderator Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Question for the forum...

    What is the MAIN difference you see between someone who makes 100k /year and someone who makes 1 million plus?

    It is a bit of a simplistic question but I am curious how people on here would answer this...

    - Habits, discipline, mindset?

    - Systems and scaling?

    - Value in the marketplace and demand?

    - All of the above and more?

    This question isn't meant to be a "what is the one thing that will make me a millionaire" but rather when you look at REAL examples of people making a million plus a year what trends or common characteristics of them or their businesses do you see? (if any)
     
  2. Fox
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    Fox Moderator Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    To have a crack at this myself I would say - scale.

    The three friends closest who are multi-millionaires all made/make their money through massive scale.

    - One made 100,000s of sales of a product
    - The other has 10,000s of monthly users
    - The last works with massive businesses to help protect 10,000s of assets.

    They all have massive maths on their side that makes their income easily reach 7 figures annually.
     
  3. Longinus
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    Longinus Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    First thing that came to mind was also: scale/leverage.

    I work about 5h / week on my main business and make more money than many small business owners that grind +50h per week.

    In the meantime I can put my time in finding other streams of income.
     
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  4. srodrigo
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    I'd say scale. For what I understood by reading your threads, you have a lifestyle business selling/building websites, which is quite hard to scale unless the focus is products that scale and are detached from your time. Unless you can sell 100k websites every month, it sounds hard to me to reach 1m/year.
     
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  5. Andy Black
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    I think the main difference could be as simple as picking the right business model. E.g. Subscription vs one-off sale. Easy to scale vs not easy to scale.



    For knowledge workers like myself, another consideration is encapsulating our knowledge and removing ourselves from the coal-face.

    Hitting the $100k/year mark as a consultant/freelancer is common enough. Hitting 10x that is rarer.

    I’m not going to hit $1m/year doing what I’m doing the way I’m doing it. I’m too much a consultant bound by my time. I could charge more, but that’s still not breaking out of the time-for-money model.

    I figure I can scale using one or more of:
    • People
    • Processes
    • Technology
    I’ve no desire to build a big headcount, so I’m focused on finding models that allow me to encapsulate my knowledge and scale via Processes and Technology.


    EDIT: I’m wrong. The MAIN difference between a business doing $100k/year and one doing $1m/year is the jockey (because they’ll know which horse to ride and when).
     
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  6. Fox
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    Fox Moderator Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Correct, it's not a hard business to make 6 figures in but very hard to make seven figures.

    My main options are
    - scaling my web and sales school
    - or using my web skills in another area to grow and scale my own product or service.
     
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  7. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Scale and the mathematics inherent in the business.

    The $1M dude is probably also a slightly better marketer.

    However my bet is that BOTH ENTREPRENEURS work EQUALLY as hard.
     
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  8. MTEE1985
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    Leadership.

    The 7 figure earners are exceptional at 1 or 2 things. They work those skills like crazy and delegate the rest.

    The 100k person tries to be well rounded and do it all. Very hard to scale that way.
     
  9. B. Cole
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    Agreed with those above on scale, but add the mindset to desire, build and maintain that scale. I think the 100k guys settle in on what they built, don’t dream big enough or perhaps are too comfortable because 100k is nice. In a sense, they’re high level wantrepreneurs, they went 90% of the way and set the cruise control.

    When what I’m doing caps after optimizing and exhausting every possible effort, bet your a$$ I’m building second, third and fourth income streams. In fact, I’m counting on it, learned too much in the past 2 years of process to settle in at 100k and not build more systems with the knowledge.

    100k is job money. I want FU money. That’s the mindset difference.
     
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  10. Dianne Cohen
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    What is it that you do?
     
  11. biggeemac
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    You didn't specify net or gross 1m a year plus, which would be a huge difference.

    Scale + team building. Our business is sitting right at around 600k a year gross. I could scale (double) it, but it would mean hiring another small team of folks that are as good as the team I have now.....and quite frankly, finding the good people to do what I need them to is the challenge in my business line.
     
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  12. JordanK
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    In my opinion the most successful people I have seen have an active income from their business pursuits and a secondary income from another industry.

    The most common one is somebody owning a business and then funneling the profit they make into Real Estate. That's where you get the saying that Real Estate makes the most millionaires.

    You focus on growing your business during the day and then in the evenings/weekends seek out property deals, financing to leverage debt etc...
     
  13. Vigilante
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  14. The-J
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    Business model + belief, which begets one another.

    The multimillionaires I know personally started their businesses with scale in mind, because they believed the business model allowed for great scale.

    It also seems that the size of the success is proportional to the size of risks taken (nominally, not relative to the effect of the downside on the person taking the risk). Not just the initial outlay: you could start a business with $100 and make it into a multi million dollar business, but not before taking bigger and bigger risks (risking $10,000, $100,000, $1m, etc as the business grows).
     
  15. Envision
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    Timing, Business Model, Scale

    The guys that I know that make 1M+ have a different view of business. They also own infinitely scalable companies.

    A guy who owns a storage facility may very well earn over 100k/year and be a millionaire but he's limited to his one facility and local area.

    The guy who owns a storage facility holdings company and builds a operating company to infinitely buy storage facilities and plug them into his systems and optimize them for profitability and operating efficiency is only limited by how many storage facilities he can find.

    Thats the same for apartments, franchises, ecommerce businesses etc.

    Own the infrastructure and build a system that can scale infinitely.
     
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    I will just speak about this in regards to E-Commerce businesses as that is where I have the most experience.

    I think one of the most important differences between those who $100k and $1M is execution.

    The people making $1M have the vision for the end goal but also the ability to put a plan into action that will take them to that ending.

    Of those in the $100k group I think some people have the vision but can’t (or haven’t) put the pieces together to execute a plan and others are too stuck in the day to day work and they don’t have the vision for how to get to $1M
     
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  17. rjrobbins2
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    As MJ said, it is scale and mathematics of the business. But, I would also add desire. I know plenty of people who had successful businesses who could have scaled into a 7 figure business but they didnt want to add to their plate. Their six-figure incomes were more than enough for them and they had no appetite for more.
     
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    Good point on the delegation and the "jack of all trades". Amazon wouldn't be Amazon unless Bezos hired.
     
  19. million$$$smile
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    I don't agree that the main difference is Scale.

    I think there are plenty of examples where businesses have scaled first in preparation of sales and they never materialized, for one reason or another.

    I believe the difference for the most part is MARKETING.

    It doesn't even necessarily have to be from you marketing the product , but just some form of medium that has the ability to market the product/commodity or concept. Viral marketing has proven that.

    Even many bestsellers without some medium for getting it exposed to the masses, would doubtfully become a bestseller. Amazon has the market. Scaling up and having 1000 books without some form of marketing won't move them out the door. Amazon will.

    You can make millions even with a lousy product if it has the right exposure or marketing.

    And if you create or find the right marketing, it will force you to scale --
    or open doors for competition.

    Just take a look at Shark Tank. Anyone that has even a half decent presentation and walks out without
    getting a shark will still see an immediate increase in sales.

    Getting in front of more eyeballs no matter how, will force you to scale and not the other way around.

    I'll take mass marketing first over scaling any day of the week if I had the choice. The market will force me to scale, and if you're prepared, you'll be ready for it.
     
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  20. Andy Black
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    Good point.

    What I personally meant by saying scaling is having a business model that can scale.

    I can’t scale because I do the coal-face work every time I take on a client, and am even turning down clients. I need to switch to a model that can allow me to scale.

    I don’t do any paid advertising for my service. I couldn’t cope with the additional work.
     
  21. rpeck90
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    My sentiments exactly, except instead of marketing, I'd say "demand".

    If you can generate demand for a product/service, you have the ability to scale. Whilst demand can be generated through marketing, mass-promotion alone won't guarantee success (just look at Fyre Festival).

    If you want to win long term, you need a blend of both good product (doesn't even have to be "great"), with the ability to trigger demand for it. I'm obviously biased towards my own ideals, but it's how I see things.

    Demand.

    The best companies don't work to facilitate products, but to create demand. They don't even worry about the scaling aspects, as that's generally an afterthought. Without people wanting your product, you have nothing.

    Selling websites? As a one-man band, you can do that and make a good living. But to scale, you need $50k+ projects. Most companies will never consider spending $50k on a website. If you're able to generate demand for them, that's how you make the big bucks. What's ironic is that most one-man bands will often produce better work than the larger incumbents, but make nowhere near the money - mainly because they're forever doing $500 projects.

    If you want to know how to generate demand, the answer is you don't. You have to basically go completely against the grain and do something so bold + ambitious that you're the only company in a market space that even has the balls to do what you do. Franchises, licensing, building out a quality team, handling transactions all come as a means to facilitate that core offering.
     
  22. AgainstAllOdds
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    Headcount.

    Leveraging your employees' time is the easiest way to multiply your efforts. Even though we like to pretend that we can do everything ourselves, and search for examples of entrepreneurs that did it all by themselves, it's a lot more common to make 7 figures while managing others.
     
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    Boldness.

    Since the timing of this thread coincides with the bump to @Kak 's ecommerce thread, I couldn't help but notice the boldness of his move.

    Side note: Realizing that there was a time when @Kak made $30k/year was an eye opening epiphany. I felt kind of the same way a little kid feels when they first realize that their mom was once a kid haha...

    The reason Kak made big strides forward was this:

    Others have made similar comments ...

    So I think it's a combination. Yes, you have to have a business model that can scale.

    But there are a lot of people who find a scalable business model and then hesitate. They fail to act.

    The difference between the $100k players and the $1M players is that the bigger players faced all that scary stuff and DID it - and they executed fast.
     
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  24. Andy Black
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    ^^^ This as well. Iterate fast and you’ll find what works. Iterate slow and you may well give up before you find what works.
     
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    Interesting question.

    Besides for all the business differences like scale or the right business model, I'd say that it all starts with something deeply personal: your standards and beliefs.

    I don't mean it in impractical, wishy-washy self-help terms, but more about how you view the world and yourself. The difference between those who make 100k/year (from business) vs those who make 1mm+ IMO comes down to these three aspects of one's life philosophy and perspective:

    1. Whether you even need it
    - most people from this forum are from the US, and many of them are from expensive cities where 100k/year isn't enough to live comfortably. Even if they make 500k, in some cities this is only slightly above middle class, which is probably not in line with what people have in mind when they think of hitting the Fastlane.

    This is related to the beliefs you have surrounding financial success. If it means being among the richest of the richest, then obviously you'll have to earn a LOT more in those places just to keep up. If you care only about how you feel subjectively (not in relation to others), then your location is less of a factor.

    Still, you need much less money to live very well in plenty of countries and cities around the world. For many people it's just not that important of a goal to make over a million if you can have a 2x, 3x, 4x, 5x, or even better lifestyle for the same or lower price than people in the most expensive cities and countries.

    If you don't have expensive materialistic goals, then once you hit a satisfying income level (and this happens sooner in a cheaper location), why would you invest more of your time and energy into something that wouldn't provide a noticeable improvement in your life? This ties in with the second thing...

    2. What is money to you? - for some, it's just a tool for freedom. Once they reach it, they're done. According to their worldview, what's the point of working more if you've already made enough (or secured sufficient secure passive income streams) for a comfortable lifestyle with a margin?

    Then there are people who think of money more in terms of personal fulfillment. In a way, the numbers reflect their growth and whether they realize their full potential. They can't be satisfied with "enough" because they need to make more and more. There's no end goal.

    A related concept here is the fixed and growth mindset. A person with a growth mindset will probably want to continuously increase their income (and be willing to risk more) just for the sake of growth, even if they don't need more money - unless they find a different endeavor to focus on where they can achieve more growth.

    One more factor I'd add here is your motivation. Unless you're addicted to luxury goods, at one point the motivation to make more money so you can buy a new toy will run out. Stronger internal motivations as well as motivations that do with other people and causes (making money so you can support your favorite charities or generational wealth) are thus more conducive to becoming a multimillionaire.

    And lastly, IMO the most important:

    3. What are your mental financial limits? - this comes down to your beliefs and standards. Some people consider anything above, say, $10k/month big money. For some, it's nothing. Some people believe they can make as much money as they want - including hundreds of millions. Others think that it's impossible for them to make more than $15,000/month from their own business.

    Some people, because of the beliefs they have, don't engage in any pursuits that won't lead to multimillion results because to them, there's no difference between working on a small project vs a big one, so why not make more than just pennies? Others, less comfortable with big amounts of money, sabotage themselves by setting low limits and worrying about cutting insignificant costs over seeking new, big income streams.

    I just spoke with a guy who believes that when you're over 60, you stop having enough energy to live a satisfying life. Guess how likely he is to enjoy good health and be vibrant and happy when he's over 60.

    In the same way, those who believe that it's impossible to make more than several hundred thousand dollars a year are unlikely to accomplish it - regardless of the business model, industry, product, skills, experience, etc. This would be incongruent with their beliefs, so they'll always find a way to screw things up.

    I haven't hit a million a year (yet), but based on my personal experience, as long as you continuously shift your mental limits higher and higher, over the long term you'll naturally continue growing your income, even if you'll deal with temporary downs (I'm dealing with one now, but I know that I'll eventually climb myself out of it).

    You get what you tolerate, so continuously raising your standards is key here (Tony Robbins stresses this often). For a common example, obese people clearly have low standards regarding their bodies, while professional athletes have incredibly high standards few people aspire to. Money is exactly the same.
     

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