HOW TO BREAK THROUGH THE ELUSIVE MAGIC MILLION BARRIER
By Robert Craven, The Directors Centre
What do the successful do differently from the rest? The Directors’ Centre Magic Million Survey compares and contrasts the attributes, traits and characteristics of successful entrepreneurs with their less successful counterparts to find out just that.
The study asked what successful (and aspiring) owner-managers/directors of growing businesses think is required to break through the MM (Magic Million) barriers: namely a £1m turnover and taking £1m out of the business.
Big caveat number one is “Beware of the ‘survivorship bias’!” – we see the winners and learn from them, while forgetting the huge unseen cemetery of losers. The second is beware when people attribute their success to certain key factors or activities -performance (good and bad) is probably related far more to chance than skill, yet people rationalise their success and create a cause/effect explanation.
When comparing the winners and losers, one sees more similar attributes than contrasting ones.
When asked: “What’s holding you back?” the aspiring growth businesses tend to blame the outside world for their slow progress. Fear is the dominant emotion: of relinquishing financial and managerial control. At a similar stage, the successful recognise that they, the
founder entrepreneurs, are the problem and the bottleneck.
Highly successful businesses consistently have a preoccupation with:
Entrepreneurs must also be willing to let go of:
- Financial control – sharing ownership
- Management control – sharing the responsibility of growing the business with the team (delegation) and outside advisers (taking advice).
Every ‘how to make a million’ title has an inevitable (and pretty much identical) list of what the successful do. Unfortunately, it’s the same as the list of what the failures also do! It seems the big difference is massive energy and a lot of luck.
All our winners presented a combination of the following:
- Charismatic leadership (and not always by consensus)
- Attitude – a ‘can do’, blame-free culture that recognises success and failure go hand-in-hand, and a ‘willingness to pay the price’
- A fast-moving, exciting business environment
- Rewards and systems that motivate the individuals concerned
- Employing the right people
Note to the owner on getting past a £1m turnover:
- You are the problem
- Work ON not IN the business – create the systems and processes
- Sell something people want, charge sensible prices, blow them away with legendary service
- Take massive action
Note to the owner on getting £1m out of your business:
- The company must be able to tick all of the boxes below to find a buyer:
- Systematic, underlying, repeatable, sustainable profit machine
- Reference and trophy clients
- Uniqueness and excellence
- A senior team to take it to
The next stage
Some 70% of small businesses hope to get their millions out of the sale of their business, yet only 25% actually make any plans to do so – you need an exit strategy. Hope is not a method!