Getting into the entrepreneurship game? Today I’m going to get you primed for what the first 5 years looks like.
In a previous post, I shared how long it takes on average for billionaires and millionaires to bank their first million dollars.
Now, I want to share with you the stages that a first-time entrepreneur goes through and why about a decade to your first million is about right.
So if you’ve been on the grind and haven’t quite found success yet, whether you’re a full-time or part-time entrepreneur, then perhaps today will make a lot of sense and alleviate some of your frustrations.
If you’re a first-time entrepreneur, then in your first year, you’re very likely to mess up a lot.
This holds particularly true if you’re not a focused entrepreneur, meaning that you’re not just concentrating on launching one business idea.
I’m plenty guilty of this too when I first started. Far too many first-time entrepreneurs, especially the ones who are running a solo gig are all over the place.
I remember having folders of all the projects I was working on because one of them HAD to pop off, right?
My scattered focus led me to spread myself out too thin and I was gaining zero traction on those projects.
So, depending on how quickly you can get yourself hyper-focused on building ONE business idea, your first year can look like an absolute train wreck.
You’re focused, what’s year 1 look like?
For the purposes of this post, let’s say you are focused on building just one business. In that case, your first year will have greater clarity, but it still won’t be an easy ride.
When you’re starting as a complete beginner entrepreneur, your first year will be like putting together a large puzzle.
What I mean is that you will be working on piecing together the big picture to present to the world what your business is all about.
Here’s a shortlist of just a few things you should expect:
- Crafting your initial customer avatar
- Validating your business idea through manual outreach
- Pivoting or evolving your initial idea based on those conversations
- Discovering product-market fit
- Finding initial product-channel fit
- Manually selling your product or service to the first 50-100 early adopter customers
- And building up your personal or company’s brand and reputation in your niche
Busy year eh?
So that’s year 1. What’s next?
Welcome! You’ve made it to years 2 & 3 of entrepreneurship
Year 2 and 3 will be the time period when you continue to refine your business model and build more momentum. You’re going to start expanding out from your initial group of early adopters and into adjacent cohorts that are interested in your product or service.
And if you are a hyper-focused entrepreneur that solely focuses on one product or service to start, then you may begin to add complementary offerings during years 2 and 3, especially ones that increase the lifetime value of your customers.
Here’s an example of a complementary offering:
OK maybe pineapples and pens are not complementary, but you gotta love that guy.
Years 2 and 3 are also the time when you start to create internal systems and training because you’re making your first hires.
During this time period, your reputation continues to increase and your existing customers are making referrals to you for more cost-efficient acquisitions. On top of that, you’re likely exploring more marketing channels, such as paid ads, to prospect new audiences.
Congrats! You’re hitting your stride in years 4 & 5
Finally, that takes us to years 4-5. By now, you’ve got several hires and your internal systems are running more smoothly without you having to handle the operational day-to-days.
You are concentrating solely on revenue-generating activities. And while your profits may have been temporarily cut in years 2 and 3 because of the extra overhead of the new hires, years 4 and 5 is when you can start to hit better economies of scale for growth.
If you’re selling products, then your cost for production per unit decreases because of the higher volume you’re outputting.
If you’re selling services, then you can charge more monthly or annually because you’ve built a strong reputation in the market by now.
These are the years when cash-flow is more positive and even starts to accelerate. You’ll start to add even more products or services to your company’s offerings, which in turn continues to bump up your revenue numbers.
OK, so clearly all of this is a bird’s eye view of what the first few years look like for the average first-time entrepreneur and a crazy oversimplification.
It does vary depending on many factors, but I hope it does give you a sense as to why 10 years is reasonable as to how long most millionaires and billionaires take to hit their first million dollars.
So, to close out, for those of you who have been on the entrepreneur grind and you haven’t hit much traction yet, I want to share this timeline because this game takes a lot of hard work for it to pop off.
Entrepreneurship is a game of patience, consistency, grit, and perseverance. If you feel discouraged, you’re not alone.
I always say that entrepreneurship is one of the hardest things I’ve ever done in my life. It’s made to kick you out of the game at every corner.
But there’s only one thing you need to do…KEEP GOING.
We’re all in this together and I’m right here with you.
If you want to keep up your entrepreneur journey with me, then be sure to Subscribe to my YouTube channel.
Here’s to you investing in your knowledge and future in the Freedom of Choice lifestyle – I’ll see you soon.