$100M CEO Explains: How To Make $1,000,000/Yr
Summary
- Understanding the math is critical to actually achieving the goal of making a million dollars.
- Decide if the aim is a million dollars in revenue or in take-home income; for top one percent income in America, $400,000 a year is the threshold.
- If running a business with 40% net margins, a million dollars in revenue would yield $400,000 net profit.
- Having a well-paying job may provide a faster route to a six-figure income compared to starting a business due to the lower associated risks.
- Break down financial goals into smaller, achievable targets – monthly ($83k), weekly ($21k), and daily (about $3k).
- Fuzzy targets are hard to hit; precise goals are necessary.
- Understand the lifetime value (LTV) of a customer; for example, a $1,000 LTV could come from various products or services adding up over time.
- With a $1,000 LTV for a product or service, aim to sell 21 units per week, possibly 5 units per day if only selling Monday through Friday.
- Know the sales funnel metrics, including conversion rates and the number of outreach efforts necessary to secure appointments and close deals.
- Higher-priced deals require fewer sales to reach a million-dollar goal; selling fewer, higher-value items may be easier than numerous low-value ones.
- Start by over-delivering value at a high price point before focusing on scalability.
- High LTV is essential as customer acquisition is challenging; aim for offers that are unique, expensive, sticky, and habit-forming.
- Reverse engineer the math to find the number of units or the necessary sales activity to meet personal or business income targets.
Video
How To Take Action
I would suggest starting with understanding your financial goals. Want to make a million dollars? Let's be clear: are we talking about a million in revenue or take-home income? This is important because, if you're aiming for top one percent income in America, that’s $400,000 a year.
Breaking down the goal is key. Let's go monthly. With a million a year, you'll need about $83,000 each month. That's a lot, I know. So, think about it weekly — aim for $21,000. Or even daily, you’ll need around $3,000. Smaller targets are easier to hit and keep track of your progress.
Now, understand the value each customer brings. If your customer's lifetime value (LTV) is, say, $1,000, you need to sell 21 units per week. That's about 5 units each workday. You with me? Good.
Let's not forget about the sales funnel and conversion rates. Knowing how many people you need to reach out to just to book an appointment or make a sale is critical. And remember, bigger sales can make things simpler. Fewer sales if your item's high-priced? That sounds easier than selling lots and lots of little things.
My advice? Start by offering incredible value for a high price. Don't worry about scaling yet. Deliver so well that people keep coming back. We're not just counting money; we're building relationships, adding value.
And the cornerstone? High LTV products. They're like gold because it's tough out there convincing new folks to buy. Aim for offers that are unique, let's say expensive but worth it, sticky so people want to keep using it, and something they'll come back to — habit-forming, maybe?
Finally, reverse engineer everything. How many units or sales activities do you need to crush your goals? Work it out, then you’re golden. Keep it all precise, keep it moving, and those numbers will start to make sense.
Breaking it down into smaller, manageable chunks — that’s the way to hit a million.
Quotes
"Fuzzy targets don't get hit"
– Alex Hormozi
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"If you want to make a million dollars as a salesperson…you need to sell…units a month of your thing"
– Alex Hormozi
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"You don't need to worry about that yet; you need to just start making money"
– Alex Hormozi
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"How can I…provide tremendous value to someone…that they will want to continue to do services with me"
– Alex Hormozi
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"You have to find ways to make customers worth more"
– Alex Hormozi
