Back in 2017 Lucy was busy growing her own eCommerce business to over 10,000 customers in just 18 months (hear about that back in episode 253). Today she focuses on helping {other} retailers replicate her success.
Lucy is a regular guest on the show because she always brings such great insight. In the past, we’ve covered ethical, sustainable eCommerce and Customer Personas and in this episode, we’re getting into just how you make the shift from 500k to 1 million in annual sales.
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Business in 2020
Lucy lives in Melbourne, and like most of the world, 2020 was a wild year.
The lockdown allowed Lucy to really focus on her business.
She’s identified three areas in which typical problems that product businesses run into when they are growing.
- Volume
- Leverage
- Scale
Lucy chose to focus on the journey from 500 thousand to 1 Million specifically because business owners run into tons of problems in the above areas.
This growth sprint will always necessitate dealing with these in one way or another.
The fact is — that for most entrepreneurs — everything you did to get to 500k is not what you’ll do to get from 500k to 1 million.
Solving Beyond 500k
Believe it or not, there will come a point when too much money is coming through your business and things start to fall apart.
Lucy uses the example of a client who hit 70k in a month and was thrilled — until things started to fall apart. There is absolutely such a thing as growing too fast and Lucy points out that growing that fast is extremely expensive in almost every case.
For most businesses who go down this road, they can find themselves completely broke or close to it.
A common mistake businesses make when they have too much volume is focusing on hiring, but without processes figured out first, this is an expensive proposition.
Instead of focusing on ways to deal with more volume, what businesses should do is build leverage. Making your company lighter and more efficient is a much better use of your time.
Recognizing the Turning Point
The point at which you need to shift your way of doing things from figuring it out to building and using processes can be tricky to identity, but Lucy has some pointers on what to look for.
She says that while it’s ideal to write processes as they happen, she recognizes that it’s hard to create them when you are still learning. Instead, she recommends getting as close as you can to breaking your business by bringing in too much volume.
She says you will know when you are close to breaking the business when your problems begin to get different.
Walking the Line With Burnout
Too much work is the most obvious symptom.
Chronic Negative Emotions — very typical when building a business with tight cash.
The Difference Between Money and Profitability.
Profitability and money are different. Lucy says focusing on margins and profitability is more important than adding more money in.
Instead of thinking about making more money, focus on making more profit with less work.
The Volume Threshold
Understand your Volume Threshold. Lucy says it’s not always worth it. Figure out what the volume threshold is for your business and make the decision about whether or not you want to pursue that.
Once you’ve analyzed that, move fast from 0-500k, but slow down and make smart decisions from 500k to 1 million.
eCommerce Book Top Tip
- Thinking in Systems by Donella Meadows
- The Goal: A Business Graphic Novel Paperback by Eliyahu M. Goldratt
eCommerce Traffic Top Tip
- Your business is not your product—it’s the audience you own.
- Consider joint ventures or distribution deals with other people who want to get in front of your audience.
Tool Top Tip
- Monday
- Log what you do in a day in great detail and find where you can automate/optimize.
Interview Links
Related episodes
- Ethical eCommerce and how to get to 10,000 customers in 18 months with Lucy Bloomfield
- Improving Conversion Rates: Getting your customer personas right is rocket fuel for conversion rates with Lucy Bloomfield
- How to get your systems in order so you can SCALE fast with Trent Dyrsmid
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