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This episode gets personal, because we’re talking about money and how my company makes it. (I feel vulnerable sharing any of this, but I think it’s an important conversation we’re not having enough.)
Here’s the truth: Building my business to $1 million wasn’t that hard. I hustled every day, and I filled my calendar.
But growing from $1M to $3M has offered so many challenges and opportunities for growth (or failure, honestly). It’s been a long, hard journey – and that’s why I want to talk about it.
This episode is a behind-the-scenes look at my personal growth journey into running a multi-million dollar company in less than four years.
I’m talking about…
What it looks like to *actually* run a $3M business… we’re talking details here!
The hardest part of playing the long game (i.e. short-term $$ sacrifices)
And what KILLED my profit margins – until recently
Listen in to this 20-minute episode for my takeaways during a year of massive growth. And then hop over to Instagram to share your own story! What have been your greatest challenges in breaking through to next-level earning?
NOTE – listen to episode 29, “ANNOUNCEMENT: We are NO longer an agency!” to hear more about our transition into raising our prices and saying ‘no’ to the wrong fits.
Key Points:
[3:50] Why 80 percent margins don’t last forever
[8:39] From “I’m done, I don’t want to do this anymore,” to a $250,000+ month
[11:03] The road to becoming a “legit” business (i.e. paying for employees)
[12:20] How I’m building my leadership team to prepare for the next $10M
[14:35] “What got me to $1M would have killed me on the way to $3M.”
[15:54] You WILL grow into the person your company needs you to be (if you’re willing)
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Episode Transcripts:
I’m Emily Hirsh, and this is The Hirsh Marketing Underground Podcast.
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All right, today I’m getting a little personal in the podcast, which I think will be fun, and sharing with you my behind the scenes personal journey and learning experiences from a $1M to $3 million business. This month, we will come close to, if not hit or go over slightly, which is $250,000 a month, which is a $3 million run rate. About a year ago, I was just over a $1 million run rate. That’s super exciting. It’s honestly grown very quickly in the last the three months, because we made some big changes in terms of what we were charging and who we’re working with and actually said ‘no’ a lot more.
I’m not going to focus on that today, but I want to share with you guys my journey from $1M to $3 million, because I don’t think people talk about this very much. I think it’s really powerful, and my fear going into this is obviously, it’s a little bit vulnerable and also, I’m like, “Well, I hope other people experience this, too, in their journey because otherwise, I’m doing something wrong!” I think other people do, because I’ve talked to other people at this stage, and they experience the same thing.
So here’s the honest truth for me. Building my business to $1 million wasn’t that hard for me. I was able to do this through hustling, not a lot of team building, a lot myself, and I was super overworked for sure, overwhelmed, anxious, and struggling in that way, but I really … I only had contractors, I had maybe a year ago … Well, I had zero real employees until I started working with a mentor who was like, “Hmm, that’s actually illegal. If you have full-time people working for you, they are employees. They can’t be considered as contractors.” That’s another story for a different day, but I really didn’t have any official employees. I probably had three or four contractors who were technically employees with that, they were working full-time. It was chaotic. There wasn’t systems. It was just every day, wake up, do, do, do, and I was in the tactical work. That was my journey to $1 million.
$1M to $3M, though, has actually been harder for me. It’s been more testing, it’s been more days where I’m like, “Do I really want to do this? I just want to go back to when it was just me.” I still have those days, but on the flip side, it’s been insanely rewarding, growing my team, removing myself from the day to day of the business, building out our systems and processes, and I am personally in a lot better of a place. I don’t have a calendar that’s booked solid seven hours a day, which I literally had for a year. I have way more time to take care of my body, be with my family, not have email on my phone, and have that space.
It’s better in that way, but the biggest and toughest piece for me was margins. Obviously, when it’s all you, your margins are really awesome, and you’re working really hard, and you’re keeping a lot of money, and you have a lot of cash. And I truly had days and months when I was at about $1 million, or just under, where I was like, I had more cash than I knew what to do with. I’m not saying that to brag. I just, during that time, thought that it would always be like that. I had probably 70%, 80% margins when I was at that level of a $1 million business with the small team of contractors. I just thought I would always have that. How could it not stay that way if I just kept on growing my gross revenue?
What I didn’t know was that that was going to change, and it wasn’t sustainable for me to stay there. I wouldn’t have been able to stay there and maintain that level, because number one, I really believe our quality of service would’ve gone down if I didn’t grow my team, because I can only do so much. That would, in turn, of course affect my reputation and our referrals and all that. Number two, like I said, you can’t technically just have contractors working full-time for you. You need to be a legit business and have employees, which means employee taxes and health insurance and benefits and all that fun stuff, which cost money.
It was this temporary phase, but I didn’t know that at that time. Nobody told me that. Now, the journey $1M to $3 million has been all about, for me, while I’m removing myself from the day to day and building my team, I am also lowering my margins during this time. I had to learn what that really meant. I probably never will have 70, 80% margins again. I probably won’t. Honestly, I’m happy when we hit months with 30% margins. That’s really awesome for me, as a service business, when I’m fully out of the delivery of the company and we are doing that.
But here’s what I had to do. I had to spend my cash that I wanted and could’ve kept for myself personally, to be able to grow my business to a bigger top line, which ultimately will get me to more net profit, but it’s like a sacrifice temporarily, and I had to learn this. And it was scary, because there’s some months where I was like, “Well crap, I made more money a year ago. Personally, I did.” That was tough, and that’s been my focus. Literally, for the last year, it’s been that learning experience of, my margins are going to go down, I’m going to have less cash, but I’m growing a business that’s going to be here for decades if I do it right. It’s going to be a $10M, $20M, $30 million company, and I have to sacrifice these margins to build the team and the systems to get to the next level.
It doesn’t get easier. I’m sorry to tell you. At $1 million, the pressure goes up, the money, the expenses and the responsibility of having employees is intense. If you don’t want that, that’s [not] for you, but I knew I wanted to grow a legacy, and what I had to do to get there. Yeah, it’s been a lot.
Here’s the other big thing I learned. I built so much team… When I used to be in a client account, it was just me. I built so much team in an account, and I kept building team, and I kept building my service up, at a higher level service. For example, it used to just be me in an account, and I was doing the copy and the ad loading and the strategy and all of it. Now, I have two people in an account, plus we have three copywriters that are high-level expert copywriters, and a designer, doing all the pieces that are required in an account.
Basically, my service level went up, but for awhile I didn’t raise my prices, and that was honestly killing me, because I was paying for this high, high level of service by paying my team and building my team and just adding layers, and I added the layers like a no-brainer, like “Okay, yup. We need that. Great. Here’s the next step. Hire the person. No problem.” I didn’t really think twice about it, because I just made those decisions based on what I knew the client needed. But then, where I got lost and where I got a little bit screwed is, I didn’t raise my prices to match that level service until the end, honestly, of 2018, we doubled our prices because I was talking …
One night, and I’ll share this story with you guys, I went to dinner here in Texas with some amazing entrepreneurs and one of my good friends, and I really went to dinner, and I was like, “I’m done. I can’t do this. I’m working hard. I don’t know what else to do, and the margins, I literally made more money myself a year ago.” And I’m like, “I’m done. I just want to go into the digital product business, because the margins are so awesome.” He’s like, “Emily, you need to raise your prices. You’re charging [for] a service that you delivered on when it was just you, and you barely raised your prices, and now, you have an entire team that delivers to your clients, and you’re not charging.”
That’s when the whole anti-agency campaign came out [episode 29]. We literally doubled our prices. We also got very clear about who we’re working with, and we said ‘no’ more and more to clients who weren’t ready for us. Nothing on them, but they just weren’t ready for working with the high level of service that we provide. It was a stretch for them, and then, it was a ton of work for us. We got really clear with that. In the last month, not the last month, the last quarter, I’ve been able to bring my margins up from very little to 20 to 30%, which is a huge win for me. Then also, our gross has gone up and the net, at the end of the day, obviously has gone up, too.
I’m going to be totally transparent. Four months ago, we actually lost money one month in my company, and that had never happened to me. I think that was the month that I went to dinner. That had never happened to me, and it was scary. I didn’t mind, because I had a saving… so I didn’t see it as like, “Oh my gosh, this is failing, and we’re going out of business,” but I saw it as like, “Wow, something has to change. Something isn’t right here. The margins aren’t going up,” and that’s when we raised our prices and got really clear.
Like I said, it’s really improved since then, but I think that that’s a common thing from $1M to $3 million, because you build a team, and you increase all these costs to increase your top level of your company and build to the next level, but you don’t necessarily change the things you were doing that got you to $1 million, and that’s saying like, what got you here won’t get you to the next level, or will kill you getting you to the next level. For me, keeping my prices as if I was delivering the ads just myself was killing me. So we made that change.
Margins was a huge learning experience, having to go and actually create a legit business, so… have benefits, have all these positions in my company from HR to operations, to pull me out fully of the day to day, which I needed to do, and I need to do, so I can get my company to the next level.
$1M to $3 million for me was all about team. It was like, how could I replace myself in every area of the business, so that I can grow as fast as the demand? It was all about team, it was all about processes, and it was about really strategically doing that, but also playing the long game. I knew when I was investing obviously, in a team, building this foundation, that I finally felt like, I was building a real company, and that I was building a legitimate foundation for a $10 plus million company. I still believe that, and I see it even clearer today, that we have this. Once you get here, I don’t know, it feels a lot clearer and easier now, because it’s like, “Wow, I’m out of the day to day. I can work on the next big project or the next big idea that’s going to move our company to $5, $10 million when I would never been able to do that before.
The final thing that’s super, been very crucial for me during this time period is really building the leadership team and managers. I have 7 managers, which means 7 people who manage people under them. My job is to be a leader for them, so they can be a leader for other people on the team. Everything comes from leadership down, and my coach, Alex Charfen, recently talked to me about this and he’s like, “Emily, when you get $10 million, those leaders are going to have to manage a company for you that’s as big as your current company almost. They have to be awesome and solid and rockstar, and they have to have this amazing foundation.” We have focused so much time not just on processes lately, but also our leadership and how do we create amazing leaders in our company who can lead the other team members in our company, so we can all grow and all be amazing?
One thing we recently implemented is actually, I love to read, so I try to read a business book every week, and [I’ve] actually been creating leadership trainings from those books for my leaders. I’m constantly trying to say, “How do we improve and empower my managers to become leaders?” Because they have to carry a load for me that gets bigger and bigger as the company grows and I get more and more removed, so the systems have to be more and more solid. It’s been really empowering and really amazing. There’s also been a lot of trust that has to come from this, because I am so far removed in some cases, from things happening in the day to day, which is what I want, but you also have to trust that it’s getting done to your level of excellence as a person and as a business owner. Especially when you have a personal brand, and you used to do everything yourself, and now you’ve delegated it, and you’re removed, and you sometimes don’t even know when there’s issues and their resolved, and that’s the goal, but it’s a mindset shift.
Truly, what got me to $1 million would’ve killed me getting here, and I had to learn that. For me, it was harder. $1M to $3 million was definitely harder, but it’s been the most rewarding thing ever, having the team and having the foundation where my company, truly, 100% runs without me. I could leave tomorrow for a week, and everything would run, because I have a leadership team, because I have systems, because I have processes, and because we have insane accountability on our team. Everything would run with no problem. That is more important to me than the cash at the end of the day, honestly, because that will grow, and I want you to hear me here, because I talk about this so much on my podcast and so much on my content, about the long game.
Everything in business is about the long game. It always will be, and it always will be. Whether it’s marketing, and the investment you’re spending in marketing, about the long game; whether it’s your team and the investment of time and systems and training that you’re doing for the long game; or whether it’s what I’ve been doing, which is spending money on my actual business and my actual team, taking less profit home for myself, to grow my company to the next level. That will never change.
The final thing I do want to add here that I’ve personally had to learn is the amount of pressure that you basically carry. I think you grow into what you can carry as a person. Right now, we have at least, I’d say at $3 million, at least, I can honestly say, easily, that we have a $1.5 million a year in expenses. If you would’ve literally asked me that a year ago, if I would be comfortable with that, I would’ve been like, “Hell, no.” When I have big chunks of money coming out of my accounts and payroll, and I’m responsible for all these employees and their salaries, it’s not easy. It takes constant mindset.
Here’s the one thing I know, though. It never goes away, because the bigger your company gets, the more amount of pressure, and the more responsibility you have, and the more expenses you have, and you just have to learn how to have a good mindset and be able to handle that and not be afraid of it, because one question I ask myself, I mean, obviously I’ve always been able to pay my team like, no problem. Like I said, out of four years in business, we’ve only lost money one month, which was scary. But I also knew, “Okay. Something just has to change. It’s just a sign that something’s broken,” and we fixed it. But what I know is that, this will never go away, and it’s all about mindset, and all you have to do is … Not all you have to do, but you have to just grow into the person that you need to be for your team and for your company to get to the next level.
I’m continually, right now, focusing on taking care of myself and taking care of my mindset and having white space and time, so that when something big happens or I get a big bill I didn’t expect or I have some responsibility that feels heavy or a decision I have to make, I can do it, because I’m not overwhelmed in the day to day, and I don’t have all this pressure and stress on me. I carry this load and this responsibility, and sometimes it’s hard, and the one question I sometimes ask myself is, “What’s the worst thing that’s going to happen?” Usually, it’s not as bad as we think, and I know I’ll always be okay, and company is thriving. But it’s been a journey, and it’s not easy to step into the next level of leadership and carry a load of a big company.
You won’t know it until you get there and until you feel it, but a lot of people at this level that I’ve talked to feel it, too, and I just think people don’t talk about it. So I wanted to share this with you guys.
If you liked this, let me know. Leave a review and let me know specifically that you liked it, or if you’ve seen this post on social media for this episode, I’d love to know if you like hearing behind the scenes. I know this obviously a marketing podcast, but I really feel like everything ties in. And the one thing I want you to take away from this is what I said, business is always about the long game. It always will be, especially in the beginning years of a business. Whether it’s marketing, whether it’s team building, whether it’s where your time is being spent, or how you’re managing your company, you’re always planning, preparing, and building for the business that you want in the future, not the one you have today. So remember that.
Thanks so much for listening today, guys.
Thanks for listening to The Hirsh Marketing Underground Podcast. Go behind the scenes of multimillion dollar ad campaigns and strategies, dive deep into The Hirsh Process, and listen to our most popular episodes over at HirshMarketingUnderground.com. If you loved this episode of the podcast, do me a favor and head over to iTunes to subscribe and leave a review so we can reach more people and change more lives with this content.
That’s all for now, and I’ll catch you next time.