Scaling a business whether offline or online is not that straightforward. In his elite advisory board, Dragon 100, Dan Lok teaches his 7 figure online business mentees this:
“You can’t grow to the next level using the same methods you used before.“
In fact, it takes an entirely different set of knowledge, systems, and processes to get from 7 to 8 figures.
In this article, we’ll look at:
- what can keep you stuck from reaching your goal,
- the formula to run and scale a 7 figure online business (including the best business model to get you there)
- the secret that successful companies use to keep growing.
The #1 Reason Why Potential 7 Figure Online Business Fails
History tells us that successful businesses are rarely built overnight. And if they are, the chances of them holding on to that success is slim.
The same can be said for overnight success in general – in business as well as in life. It’s generally too good to be true. We can find evidence of this principle when we look at lottery winners. They became instantly wealthy. And yet, within a few years, many of them end up broke or worse.
Some lose their marriages. Others lose their houses, friends, and even lives. In fact, given that track record, it’s not even worth buying lottery tickets.
Building a business is not the same as gambling. So why do entrepreneurs build a 7 figure online business as if they are trying to win the jackpot?
These entrepreneurs probably think that building a successful business takes luck. And that with luck, they’ll become successful fast.
Now, you might say that believing in luck is a positive thing. But luck can stagnate a person – it can also ruin it. And believing in luck is a way to sabotage success. Consider the definition of ‘luck,’ for instance:
“Success or failure apparently brought by chance rather than through one’s own actions.“
Those who count on luck, or believe in it, are fooling their subconscious. It makes these entrepreneurs think that they need luck to be successful. And it relieves them of the responsibility of making their businesses work.
So, luck won’t cut it. Building a thriving online business requires proper preparation. Otherwise, you might end up like 70% of companies fail that fail due to premature scaling.
How To Grow and Run Your 7 Figure Online Business
A few years ago, Dan went away for a five-week vacation. But one of his best memories was not of his time away, but of returning.
When he went over the financials with his bookkeeper, he discovered something interesting. His revenue had gone up across all his companies.
Even though Dan was away for over a month, his companies continued to run without his daily input. If your business can’t do the same, it’s unlikely you will be able to grown your business to turn over 7 figures.
Here are seven steps you can use to replicate Dan’s success.
1. Avoid having an expensive hobby.
If you don’t have a reliable, predictable way to attract your ideal client, you don’t have a business. You have an expensive hobby.
So make sure you know what it takes to get a client. Where do your ideal clients hang out? What does their acquisition cost? How can you attract more?
If you don’t know these details, you may be relying on luck and hope to get your business to the next level.
2. Entice and encourage your clients to stay
If you continually have to get new clients, you’ll likely run into trouble. To grow your online business, it’s critical to find ways to hang onto your clients.
So besides nurturing your client relationships, make sure you have:
- excellent customer service,
- provide results-driven value, and
- reward customer loyalty.
3. Improve the lifetime value of your customers to grown your online business
There are only 3 ways to grow a business.
- Increase the number of customers
- Increase the frequency of sale
- Increase the transaction size
Every new customer costs you. So try to increase the number of times they buy from you or the amount of the sale.
That way, you increase the lifetime value of each customer. Meaning, you get a higher return on your cost of client acquisition.
4. Increase your chance of predictable revenue to grow your business
Dan could go away for five weeks because he had systems in place for all his businesses.
It’s essential not to systemize your business before completing steps 1-3. Why?
The purpose of systemizing is to design a way to generate predictable results. If you systemize a business with lousy results, you’ll predictably get lousy results.
5. Equip a team to run your money machine
Once you have a system in place, you can train a team of people to manage the system for you.
Look at McDonald’s, for example. Most of the franchises run efficiently, even when the owners are not around. Why?
Because the McDonald’s business model is a simple, replicable, superior system. It’s so systemized that anyone from a teen to a retiree can work it.
6. Find ways to take the pressure off your staff via automation
If there are ways for you to automate your online business – especially using technology – use them.
For example, you could invest in customer relationship management applications. They can help you manage, segment, and nurture all your leads with less time and fewer errors.
You could also automate your email marketing.
Other programs like Salesforce, NetSuite, and Zapier can contribute as well. Think about what you can do to automate those daily tasks so you can focus on growing your online business
Step 7: Now it’s time to scale.
Once you have steps 1-6 in place, you can expand your business.
By using this formula, you can quickly grown your online business to turn over at least 7 figures.
Before you get started with step 1 of this formula, there is something else you must do. You need to become an expert.
3 Methods to Become the Go-To Online Business in Your Industry
To build a 7 figure online business, you’ll need to have that level of trust from your prospects. There are several ways to grow that authority and position yourself as an expert. Here are three ways.
- Write a book
- Show how well your product or service works
- Run workshops, seminars, and training programs
And give all the above away for free. We’ll explain why in the next few sections.
How Dan Converted a Cold Lead into a $10,000 Monthly Retainer Client
When Dan Lok was a young entrepreneur, he didn’t have any connections to help him along. So he wrote a book. He printed a few and always carried some with him.
One day, on a 3-hour flight across the country, he was sitting next to a business owner. They talked and got to know each other. It turned out that the business owner was looking for a consultant like Dan.
So when the business owner asked for a business card, Dan pulled his book from his briefcase and handed it to him. Can you guess what happened next?
The business owner signed a $10,000 check on the spot and hired Dan on a monthly recurring basis. Here’s why:
With his book, Dan immediately positioned himself as an expert.
If writing a book seems daunting, you’re not alone. So we offer some shortcuts for you to use:
- Contact your best clients, thank them, and interview them on why they do business with you
- Collect stories about what problems your service and products solve
- Compile this content into a book.
Unsure of your ability to write well? Consider hiring a ghostwriter to help you transform your content into a book. Then self-publish the book. As long as it looks good, it doesn’t have to be expensive to produce.
Now, you might wonder why you should give your books away for free.
Well, it doesn’t have to be free. You could recover some of the cost using a free book funnel that charges shipping and handling.
You could also consider using your book as a lead magnet and have upsells on the download page.
At the very least, you could collect email addresses from your new prospects. That way, you can nurture and sell to them over time.
Lastly, you could use your book like a business card, as Dan did.
How (and Why) Demonstrations Can Catapult Your Sales to the Next Level
A CEO’s assistant recently came to us behind her boss’s back.
“Please help our business,” she said, “we haven’t sold a single product in over two years.”
At first, her story puzzled us. The product was right – it was an online education system for young children. Those who used the product said it worked well. So the results were excellent.
And those who were working with this CEO were passionate and believed in the product. So the team was good as well.
So why was this business not making any money?
It turned out that this business owner didn’t want to give anything away for free. She felt that giving away her hard work meant that she was devaluing her product.
But what is the value of a product or service that doesn’t sell?
Giving away something for free is not the same as giving away your product or service. Think of it as content creation – a way to show your client base that you exist.
If they don’t know what you do and what value they can get from your product, they are not likely to buy from you. But what should you give away?
Give away value, something they can use right away, or tasks and checklists that will help them generate results. Why?
Because when they experience using success, they will come to you for more. And those customers will also be more qualified.
So give away enough to make a difference in your audience’s life but leave them wanting more.
In the case of the CEO of the online education system for children, she could give away the first module for free. Or one of the games. Or a PDF of ‘best practices.’
If she used any of these methods, she’d soon be making sales.
Workshops Worthy of a 7 Figure Online Business
When the pandemic swept across the world, a lot of businesses suffered. Almost none hurt as much as the events industries. Even restaurants had the option of switching to a delivery model. But what could businesses that relied on events do to pivot?
Not only were flights canceled, hotels shutting down, and venues closing. But there was a near world-wide ban on large gatherings of people.
Some events businesses got creative to survive. They contacted their customers. And they offered them two choices: receive a refund or attend the seminar online.
They pulled it off too. Especially with some help from new online communication technologies.
What about all the sales that they lost?
These businesses set up online workshops to showcase the value of their seminars. But they didn’t use these workshops to sell.
They weren’t your typical salesy webinar.
Instead, these events businesses organized free, value-driven seminars. At the end of the program, they offered attendees the option to book a free consultation with an expert.
By using these methods, these businesses had a higher than usual conversion rate. Their prospects were warm and qualified by the time they even got onto the consultation call.
So consider offering free workshops, demonstrations, and training programs. Don’t use the workshops to sell. Instead, build and nurture relationships with future clients.
The Business Model That Could Get You to a 7 Figure Business Fast
Many entrepreneurs struggle to find the right business model for their online ventures. That happened to an entrepreneur who attended one of Dan’s seminars.
This entrepreneur had recently started a YouTube agency. His concept was good, but he was barely making six figures.
So Dan gave him a proven business model that leads to a 7 figure online business for this entrepreneur. Dan suggested he do three things.
1. Get rid of the pay-per-project model.
Most entrepreneurs start small. And that’s OK. Small projects are a great way to build confidence in your ability, skill, and service.
But once you have your confidence and testimonials, it’s time to scale. And nothing beats that faster than the recurring revenue business model.
Consider taking on clients for no less than 12 months. That way, you can count on their recurring revenue and results.
2. Target people who can afford your services.
Many businesses that advertised their ‘crisis programs’ during the pandemic targeted everyone. And that’s a big mistake.
The best way to create a consistent revenue base is to target clients who can afford your services.
Dan suggested that the YouTube agency target those on Facebook who ran a lot of ads. Why?
When a company spends upwards of $10,000 a day in Facebook ads, they can afford to pay a few thousand dollars a month.
3. Use the “Three Boxes” sales strategy.
The Three Boxes sales strategy is no new at all. It takes advantage of contrast pricing.
Imagine you are at the movies and want a drink. You might notice that drinks come in three sizes: small, large, and extra-large.
Studies show that some people might pick the small, and even fewer might pick the extra-large. But the majority of customers will choose the middle offer and get a large drink.
The same strategy works in other businesses. And it’s crucial for 7 figure online businesses.
Let’s say, for example, that you’re looking to sell a $5,000 product. You might also offer a $3,000 product with far fewer services, and even a $10,000 product with a lot more functions.
Chances are, your customer will buy the middle one.
So to build a 7 figure online business fast, consider:
- targeting the right clients,
- giving your customers options, and
- creating a recurring revenue business model.
For more business models that grow into successful online businesses, watch this video:
The Reason Why Successful Business Keep Growing
While it’s not a secret, very few entrepreneurs do this. You see, successful entrepreneurs with 7 figure online businesses never stop learning. Why?
It’s the only way for them to streamline their business, avoid pitfalls, and keep growing.
So they read books, learn from masters, and hire consultants. Several online entrepreneurs, like Dan, spend well over 6 figures to engage experts.
These days Dan doesn’t take on many consulting clients. Now and again, he enjoys sharing his wisdom with select, serious entrepreneurs. If you would like to work with him, click here to book a call with one of his advisors.
In the meantime, download the Dragon 100™ Habits Checklist.
In it, you’ll find the best practices used by many successful 7 and 8 figure companies. It can act as your consultant.
You’ll find proven strategies to save time, effort, and resources.
The Checklist can also help you make decisions, increase productivity, motivate your team.
With this valuable resource by your side, you could gain peace of mind that you are on the right track.
So download it for free now: Dragon 100™ Habits Checklist.