The reality is that most agency owners will never hit 7-figures in revenue.
It's not about productizing.
It's not about Facebook™ ads...
It's almost ALWAYS because of this one thing.
In today's video, I want to break down the exercise - that when skipped - leaves agencies in that "glorified freelancer" state of business.
Transcript / MP3
Here's the question that you need to ask yourself, how many units do you need to sell a year at your price point?
So we could say, Hey, I want to get 500 clients a year at a two K price point. Guess what? That equals a million. And I'll just draw it out because that's important. The two comma club, 500 units at two K each a million. Okay. You could then also do 200 clients at 5k that also guys equals a million. We could also hit a hundred clients at 10 K and this is, I just did this for easier math guys, um, equals obviously 1 million, 200,000. So again, we'd have a seven figure business. All of these would generate seven figures in revenue. Okay. I can tell you that some of these are a lot harder than others. How I like to boil this down is if you look at, okay, so that's 500 clients per year at two K or a hundred clients at 10 K per year. If we looked at the actual number to hit a million, I think what is it? It's 83,000, like 333 or something like that. You would need to do a month. Someone can gut check my math. I know it's like a bunch of threes. So it's like $83,333, 33 cents a month. Right. You break that down into a week. That's roughly 21 K a week that you need to generate. So if we're like kind of just dissecting the math a little bit more, so you then need to ask yourself, okay, well, which sounds like the one that I want to go for. And here's the thing. If you're like us, you probably start on a path like the second one, like, Hey, my offer is at five K right now, and I'm trying to eventually get to 10 K. And so this might be a multi-year process for you, which is totally normal.
Um, most businesses that actually do hit seven figures in the United States on average takes them three years. I think that number is going to continue to go down with obviously the rise of a lot of the things that we talk about inside this group and just online entrepreneurship, et cetera. We now know we need to hit this many units. So you need to ask yourself how many units do I need to sell? And at what price point am I focused on now, here's one thing I want to kind of talk about. This is assuming the price point is to K 5k or 10 K while I do believe the path from zero to 1 million and not believe there's tons of evidence to support this or already onto me there. So this journey from zero to 1 million should only require one service, or you can say program and focused on one channel.
I will talk about that here in a little bit, but really you should have one service or program that can get you to a million. I even say a million very loosely because one to 3 million, many people can do with just one with one offering. Now, something to get really clear on, because I think the online coaching and consulting space sometimes can throw the, like, some people look at it a different way, but realistically, like I said, if you sell a service that takes you, you know, a couple of weeks to deliver, or even a couple of days to deliver and you sell a hundred of those in a year, you you've made a million dollars at $1.2 million in revenue. Like just download that for a second. Think about all the complexity that you've already added to your life and your business, like dumb it down.
You need 100 clients this year to pay you $10,000 and you will have generated 1.2 million. You don't need thousands of customers. You don't need hundreds of customers per month. Uh, you need a hundred clients this year paying you $10,000 and you will do 1.2 million in revenue. Okay. Math can argue the math. Now I care more about is actually the lifetime value of the customer or the annual value of the car customer. Let me, so this is what I actually care more about. And this is what you see, I think happened in the coaching and consulting space. Many people have like a 90 day coaching program or what have you, or a 90 day training consulting program. And that can get you to a million dollars in revenue that alone. But I think what's really actually more important is like the, the annual value, right? Because if you only have one offer, right, a single product with no upsells, no cross sells, truly each client will only give you 10 K and then that's it.
What a lot of people end up doing. And this happens a lot more. I I'd say historically with the coaching and consulting space is you'll have your front end product that you sell for maybe 10 K and then you have a backend product that you'll add probably somewhere between when you're doing somewhere between 60 and 80 K. I see a lot of people add that per month in revenue, they'll add a backend that is anywhere from 12 to 30 K on the backend. And that could be be another six months or 12 months as an offer. That's pretty common, but I'm going to gray it out because it's not, it's kind of optional. Like you don't need to have this in order to hit 1.2 million. Um, it actually, you could argue, adds a little bit of complexity and there is a right sequence in when should add that second offer.
And I will say that a lot of people add it too early, myself included that actually slowed us down from hitting the million run rate. As we were on track for it, we added our backend and added some complacent complexity. We're trying to figure it out. And that delayed how well we were able to focus on our front end on our core service on our core message. And that definitely slowed us down. And we actually focused all of last year on just the pretty much just the front end and maintaining the small number of clients we had in our backend. And we were able to go over a million dollars in revenue pretty much just from the front end. So I'm speaking from experience on this, the more products you have under a million dollars of the way more complicated is going to be. And when I say product, you can insert that with program.
You can insert that with service, whatever you're calling, cause it doesn't matter what you're selling. You need to get a hundred units at someone paying you 10 grand. I have, um, a former mentor of mine. They sold a service. It was, uh, they delivered over one to two days and it was 10 grand and or 12 grand, depending upon if you paid in, if you paid in full and you flew to their office, they implemented a funnel for 10 or 12 grand. You had it built in two days and then you'd leave. And they got to almost, I think it was a two and a half million a year just selling that thing. That's it, people pay 10 to 12 K they show up two days, boom. They leave, boom. They leave, boom. They leave. And they just got really good at getting people to pay 10 to 12 K for that thing that they could deliver in two days to the point where they got so good that they could deliver in one day and they could churn out more people.
Right? So math, math, math, math, if you want, if the seven figures is important to you, I recommend this path and getting on this trajectory of a hundred a year at 10 K. Um, for the record we don't sell our current, our current core offer is, is just under 10 K. We're not at the 10 K Mark yet. So that means we have to sell a little bit more. I will tell you though, it's a lot easier to sell a hundred people than it is to sell 200 people, especially when you start dissecting the math. Right? So let's look at if we're doing math and we're looking at this 81 or 83,000 a month, which breaks down to 21 K a week, which I'm looking at right here for all you guys, this 21 K a week. How do you get 21 K a week?
Would you rather or sell for clients at, if you say four clients at 5k, right? That's you're just shy. You're at 20 K you sell five clients at 5k. You break that. Okay. Right. So is selling five clients a week easier? Or would you want to what's the math. I see a lot of people. You need a what's 21,000 divided by a thousand or 20. Yeah. 21 clients at a thousand. For some reason, I think a lot of people think it's easier to sell 21 people at a thousand. The problem to do that profitably is actually a lot harder if you're adding 21 new clients a week at a thousand where things break and what I'm gonna be talking about here in a minute is you're going to, uh, the operational systems and overhead required to run that profitable is actually difficult. So it actually, for most of you, it benefits you to serve fewer clients at a premium level.
And however you define premium, I'm defining premium as above 3000, ideally five to 15 K as like the core offering. Now, again, in that five to 15 K doesn't necessarily have to be one, one program or one service. It is the annual value of a client. Okay. So you could sell them something for, for five years. Okay. And then you upsell them for another 5k and the annual value is still 10 K. And if they only ever bought one more thing from you, then the lifetime value would be [inaudible]. Are you with me? Say, yes, I am. I'm with you. And if you're with me in the comments. So for the record with this LTV, cause I'm an avid customer, 8,000 LTV is Starbucks. 8,000 LTV is Starbucks. Starbucks has defined their lifetime value of a client as 8,000. And I've probably spent well over that.
I get a lot of Starbucks, but obviously that's not one, one offer. Someone's not just buying one Starbucks, right. Thousand bucks, they're buying a lot of Starbucks, their lifetime. Okay. Uh, yes. This works with the coaching business model. Honestly, it it's math. It works with any model. Um, with coaching, it works in more cases simpler than with service, most service providers overcomplicate. Yeah. So we're going to kind of continue on. So step number one is do the math, how many units at your annual value of a client do you need to get to get to a million? Ideally the fewer clients at a higher premium, the better. Now here's the thing I already kind of alluded to this. This should only require one. I'll say one core offer with one channel. What I mean by channel is channel is outbound. Facebook ads earned media partnerships, referrals.
Like those are all channels, right? Someone said, how about a two tiered offer a 10 K with done for you and same offer at 5k done with you. You're adding complexity. See, this is a perfect example of why people don't hit their goals, sell one until you get to a million, then introduce the other one. Like literally it's just, you're being greeted. You're trying to be greedy. You're trying to get every person that you talk to to become a client, pick one, sell tons of 10 K with done for you or sell double that 5k done with you. Don't offer both. You can offer both. It will be more complicated and you'll have more challenges because you've allowed those challenges to be there. So, which do you care more about having a 10 can a 5k or just committing to one and getting one to the goal?
Most people overcomplicate this. Hey, I hope you enjoyed this video. If you found it useful, please make sure, sure. You click that subscribe button and click that notification bell because we release a video like this each and every Thursday. Now, if you want the rest of this training, the piece that you saw up until this point was a part of an hour long free train that we did inside of our free Facebook group. Go ahead and visit all agency.com forward slash group request, access to the group. And you'll be able to find this training and watch the entire 60 minute free training on really the five steps to building a seven figure business while having a four day workweek. So I hope to see you inside the group and we'll talk soon.