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

Damian Pros

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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.
What is it that precedes scale though? What is it that even allows scale to be possible?

A company might have potential for scale because it has an offer that the market wants (demand).

However, at the very fundamental level of every business, what's the catalyst that let's it maximize that potential?

The Customer Experience

(And I do NOT mean customer support. Support is a part of the experience. The experience is everything in the buying and delivering process that creates a positive or negative perception of your business in the customer's mind)

No matter how good your marketing is, no matter how much the market wants what you sell, no matter your leadership skills, your motivation, your boldness and all other things that have been mentioned...does the business even stand a chance without an optimized customer experience?

Because when the customer is satisfied from transacting with you, they will come back, spend more, spend consistently and bring referrals who will also do the same.

The question is "for how long can you maintain an excellent standard of customer experience?"

Can you do it for long enough to gain sufficient market share so that you slowly but surely dominate your space and achieve a monopoly?

Or will you sit back and rest after you've achieved some decent success, only to find yourself losing customers because you stopped paying attention?

I don't believe that scale can even be achieved without maintaining an excellent standard of customer experience.

The difference is between a $100k and a $1million a year business is apparently scale.

But what is it that facilitates scale?

That's what we should be thinking.

The customer experience is one of the must crucial ingredients of the recipe, which is most often overlooked.

A product that solves a problem or fulfills a need of the market is another (demand). Marketing is one more.

Overall, I do not think there is a one single thing that makes all else redundant, rather than a mix of components properly combined to achieve the end result.

But like the recipe for a great cocktail, it's the combination of multiple ingredients, in the right dosage that make or break the result.
 

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lunga ngcobo

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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)
I think the answer is all about building a business that is easy to automate and at the same time allows you to easily scale up with unlimited revenue possibilities.
Once you set up the business then you may hire professionals to run it. You will be amaized of how some other people can do the job much better than the founder but are stuck in the employee mindset.:happy::happy::happy:
 

astr0

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Hanged out with 250+ employee CEO friend and he told a story that might be relevant here.

A week ago an owner of another software outsourcing company who stuck on around 100 employees for years visited him to ask for advice on how to grow past 100 and insights how is it going with 250+.
His advice was something like this:
"I focus on building systems and processes, delegate everything and avoid interactions with people as much as possible. (A long story about their recent part-wins and loses on tenders where they could win big if he was involved). It's not very efficient short-term but pays well long term with scale and automation. I'm not involved in sales or client engagement but enjoy casual talks with long term clients in bars, probably that builds the relationship too.".

Talked about my business and it quickly went south to discussing the company where my wife previously worked (our office is in the nearby building). He said they "worth nothing" and their CEO/owner is "crazy stupid, almost insane". I haven't believed him at first, so we had to check LinkedIn. Basically, he split the company into 3: one making their own products, one for outsourcing, one for outstaffing. Fired a lot of people during this, and even more left. They down to 80 people from 120+...
 

roguehillbilly

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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.
Not to derail, but where is that true? Even in San Francisco, $64,177 to $192,530 is considered middle-class. It's kind of hard to believe $308k more than the top-end of middle class is 'slightly-above'.
 

MTF

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Not to derail, but where is that true? Even in San Francisco, $64,177 to $192,530 is considered middle-class. It's kind of hard to believe $308k more than the top-end of middle class is 'slightly-above'.
Depends on your definition, but San Francisco is actually a good example here:




But of course, it depends on what you consider middle class. In my opinion, assuming that the average rent is $3,609 per month for a 792 sq feet apartment, anything below $100k a year is barely middle class as you have to spend almost 50% of your income just on rent alone. And that's just renting an average apartment, not that big for the US standards. I'd imagine "proper" middle class in the US to have their own house (not a rental) with at least a small backyard.

If we consider sales prices, with a median sales price ridiculous $1,400,000, then it's clear to see how little you can do with, say, the aforementioned $192,530.

Also, just for clarification, what I meant by "probably not in line with what people have in mind when they think of hitting the Fastlane," is that in my opinion, from a purely financial viewpoint, a person won't feel Fastlane rich if they have to save 100% of their income for ten years just to afford an average house, not even something upper-middle class.

The solution can be to accept the crazy prices and, as a side effect, perhaps change your mindset (or go crazy trying to keep up with the rising costs of living), or move to a more affordable place where you can buy a nice (not average) house for 3, 4, or 5x less money and not have to worry about constantly making more and more so you can spend more time actually enjoying your life. Again, depends on what you want and need.
 

Lee H

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In my mind the key difference between a$100k business owner and a $1m or even $1bn business is vision.

Those that create massive multi-million dollar businesses have tremendous vision, they look to solve bigger problems at a higher scale than someone running a$100k/yr business.

They also look at how they solve the problems associated with building such a business - building an amazing team, leveraging others, building relationships, automation, marketing, customer experience etc. Basically all of the things people have mentioned in this thread.

But it all starts with a huge vision followed by a willingness to take risks and execute on that vision.
 

roguehillbilly

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The solution can be to accept the crazy prices and, as a side effect, perhaps change your mindset (or go crazy trying to keep up with the rising costs of living), or move to a more affordable place where you can buy a nice (not average) house for 3, 4, or 5x less money and not have to worry about constantly making more and more so you can spend more time actually enjoying your life. Again, depends on what you want and need.
Fair enough -- I love the financial samurai btw :)
Alright, enough derailing.

I don't make a million bucks yet but I've made six figures so I can't exactly answer this question, yet.
I think the scale idea makes a lot of sense though. Doing what you are successfully en masse will bring riches.
 

TreyAllDay

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Great question, I'm actually going through this right now- 2.5 years in I earn about $200k/year, I've plateaued around here for about 12 months with no growth and have been evaluating why. Here's what I've learned:

In a majority of businesses - it seems the skillset, technique, mindset - (whatever you want to call it) you need to earn your first 100-200k is a different set of skills than you need to get to $1Million. The initial 100k was more focused on:
  • Qutting my job, releasing the scripted mindset and going for it.
  • Perfecting skills like sales, meeting the right people.
  • Learning to love long hours and be passionate about the goal.
  • Having the balls to take the risk without earning any money yet.

The issues I am facing now are more:
  • Managing my first employee
  • Managing my business time and time with my family to be productive
  • Learning to say NO to people who want me to get tied up in their businesses (which is very difficult to me)
  • Not lending money to friends/family or blowing money on trips
  • Also feel like I've been stuck at $200k/year because somewhere deep down I am satisfied with it.
The inspiration to grow comes easy when you're earning $50k/year, begging for a day off from your boss. At around $15K/month you live pretty comfortably and the "F*ck this" event isn't really there any more.
 
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Joe Cassandra

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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...
This is what we're at the beginning stages of at the moment. Funneling all the money into investments that grow in a real estate business.

My current business is in a small niche, where even trying to grow an 'agency' would require going after clients outside the niche (as it's so small).

I lack the vision to grow it past $300k/year.

Funny enough, for our new real estate venture, I have the vision and the written path to make multi-millions in different ways.

So, we'll be taking a more unconventional path to 7-figures. Service-based biz ---> investments ---> grow investments fast ---> reinvest cashflow ---> start over.

I think leverage is important, but as just mentioned...you need the Vision + Massive Action to get to 7-figures. Obviously, employees/leverage will fall into the vision.
 

G_Alexander

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So much of what has been said here is great, and relevant! What I'll say is... *all other things held constant (desire, ambition, work ethic, etc.)*: The big thing that separates the $100K from the $1M earner... and the $1M from the $100M is DELEGATION.

Our first brick and mortar deal, we did almost everything. Sourcing, financing, hiring, firing, construction contracting/rehab, etc. We also needed to go to the location and manage 10 employees for 4 days a week once we were operational (while at the same time still running my online business). 7 months in (once we had cut our teeth) we hired a great General Manager and paid him handsomely. I no longer needed to be on site anymore (my time was now freed).

For locations #2 and #3, I still had to do the deal-side stuff (source, manage the construction/rehab, and handle the financing), but this time we hired in more managers right away on the operating side. I never had to be on site once we opened. So the money rolls in... and 30 employees take care of themselves across 3 locations.

Now for location #4, on the deal side I only visited it once to make the acquisition decision - and answered about 30 emails and a few bank phone calls. That's it. My GM managed the rehab/construction. The systems are in place, the team growing, and things are starting to shift to the business perpetuating itself.

My eCommerce business has 6 full time employees and also needs nothing from me except SEO maintenance (which I can't/won't farm out at this time). Some months I work 5 hours on it, some months I work 60 hours. Depends on what I feel like doing.

Delegation is scary (at first). But realizing there are other people out there who can do things as well (or better) than you is paramount to growing your business. And providing people with a job they love and BIG opportunities for growth in their career is more rewarding than any Lamborghini or fancy dinner.
 

MJ DeMarco

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Thread updated to GOLD.
 

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Bryan James

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I'd say scale and delegation mainly. When you expand and grow the sources of revenue/profit (scale) and clone yourself (delegation), so to speak, the whole operation rapidly grows in addition to your net worth in regards to ownership of the company. Plenty of multimillionaires don't even pay themselves for a while, instead they reinvest the earnings in scaling and delegating until they can either afford to start paying themselves or sell the company outright.
 

banjoa

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Heard this from a podcast today:

Find winners and sell to them.

One factor not mentioned yet (I think) is choosing a fast trending market.

Choosing a business where you can play at the fringes of the market. Seeking where people/things are going, understanding what’s going to happen next and pitching your tent before the market goes mainstream.

This is probably the most common way people have used for exploding income levels.

Most factors mentioned here are dead in the water if you operate in a slow, stagnant and dead market.

If you choose a dead market nothing matters.

Try scaling a fidget spinner e-commerce store. Delegation won’t matter. Outsourcing won’t do nada. Vision is mute.

An example is the Amazon boom. People that were dumb as F*ck were clearing 7 figures. No belief required. It was just like BOOM!

Even Elon did this. He initially wanted to start a non-Internet business but held off the idea when he noticed the Internet trend. He jumped in.

A guy named Jeff Bezos did the same. You might know him. Left his investment banking job to start the Amazon. Saw the trend. Played at the fringe. Went mainstream.

Jason Cohen. Saw everyone and his dog building Wordpress sites. I’m going to start a hosting platform for wordpress he said. WP Engine was born. Now he has got sign on one of the tallest buildings in Austin.

The next Jeff Bezos is probably implementing an idea you read about passingly on hacker news on an idle Tuesday afternoon. Playing at the fringe and patiently waiting.

Lesson in there.
 

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