5 Misconceptions About Making $500k in Your First Year Of Business
Here’s why my friend isn’t about to quit his day job, despite running a franchise business on track for 7 figures in year 2.
In my first year of entrepreneurship, I made approximately -$70,000. That’s negative $70k, since I spent most of that year paying other people to build cool things for me, rather than…I don’t know…getting sales? While my costly blunders and 6+ figure failures might be on the extreme, there is a common thread among most entrepreneurs I know and meet: It took them years to attain success, and most spent years clawing their way to the 6-figure mark. However, most is not all.
I have a friend who took what some might call the “fast track”, buying a proven franchise and setting up shop amidst the pandemic, alongside his 9-to-5. He didn’t just buy and launch the business; he made 6-figures — in fact, half a million dollars, to be more exact — within that first year. Despite running a business on track to make 7-figures next year, he and his wife still haven’t quit their jobs — nor do they plan to. Here I’ll debunk 5 misconceptions about launching and running a $500k (in its first year!) franchise.
1. Rolling in the do(nut)
What would you do if your business made $500k in its first year? Sock away a nice 50% to your personal salary and savings? Make a down payment on a house? At the least, quit your job so you can devote more time and supercharge those hundreds of thousands into millions, right?
Maybe if that $500k were profit, not revenue, those would be viable, acceptable options. As you may know, profit margins vary wildly by industry and company, so that $500k could look like a nice $400k profit or as little as $50k, if the costs are high. But surely, there’s no way his profit would dip lower than 10% of sales, right?
If you thought buying a franchise and making half a million dollars in his first year guaranteed that my friend is rolling in the dough, you’d be in for a shock. His business is in the junk removal space, so a few key costs include:
- U-hauls or company trucks
- Packing materials
