7-figure Letter Issue #14 – Why entrepreneurs get stuck at $1-5M?

This is a new weekly newsletter that will be focused on going “deep” on a specific framework, method or strategy for scaling past 7+ figures in your online business.

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Why entrepreneurs get stuck at $1-5M?

One of the reasons why Entrepreneurs get stuck at $1-5M?
They forgot to create an R&D budget…

Here’s how to do it 👇 so you never plateau again…

Most of the time Entrepreneurs are “stuck” after they’ve hit a level of scale.

On the way to building their business, the only thing that “worked” was innovation.

Trying something until it worked.
And failing forward.

However, once someone got something “working”
you must double down on that “one thing” to achieve scale.

The problem is…
Entrepreneurs “let go” of the innovation mindset and focus on high return within the next 90 days.

Without focusing on the innovation that brought them to where they are.

When you do this, eventually your golden goose won’t keep laying golden eggs.

Problem is…
Most Entrepreneurs wait until the golden goose is gone to do something about it.

And a lot of the time, when you do this, you’re going to have to use your cash reserves to solve the problem, instead of planned cashflow.

Here’s what I do…
I dedicate 15% of my P&L to R&D.

I would consider I’m on the high-end, however, it should be at minimum 5% and depends on the “mode” you’re in, inside of your business.

For me, it’s means for every $1M in revenue, I spend $150K trying to find the “next thing”.

When you do this, you’re able to solve problems before they ever become a problem.

Every great innovation I’ve had
has come from this…

Because I’m building the future and because I’m able to spend money WITHOUT a desired R.O.I in the present, it allows me to be far more creative.

There’s only two ways to get this innovation.

1. Do what I’m doing or
2. Be starting out.

This is why Apple spends 8% of their revenue on R&D.
Why Amazon spends 12%.

It’s why larger companies by other companies– for their innovation.

When 1 or 2 things are working REALLY well in your business…
It’s the time to test 3-5 new things… that you have ZERO expectation of…

Here is one of the innovations I tried in the past few months…

The Easy Way to Make Sponsorships A Major Growth Driver In Your Business [Live Workshop]

If your business needs a new, scalable, largely untapped, and massively high R.O.I source for new lead and sales….

Join our live workshop on Wednesday May 31st at 2pm PST to understand how to utilize sponsorships to earn high levels of trust with curated audiences full of your ideal prospects and future clients.

Unlike Facebook or Google Ads, sponsorships take less work to set up, they give more control over your message, and you have a true partner to work with.

Compare that to paying a giant company with a major ad network that honsetly does NOT care about you, your success, or the relationship you can create with their audience by working with them.

Sponsorships are the future of advertising for smaller businesses. We want to show you why and how you can get in while it’s still early.

What happens when you start innovation now?

By the time you need something “new”…
You’ll know what it is…
It’ll be optimized…
and it’ll bring you to that next level.

The key to this?
It’s starting.

Here’re the steps, that I used, that might be helpful for you.

#1. Create a bank account called “Innovation” and deposit 10% of all your companies money inside of it.

#2. Outline every possible way you could innovate oriented by marketing, sales, operations, delivery, team and finances.

#3. Pick 3-5 things that you want to do of that list.

#4. Pick the first thing that you want to do on that list and then figure out how to make it work and how much money is needed to get started.

#5. Get rolling. When the next month comes, deposit 10% of your money at the end of the month, into the innovation fund, even if you’re not using it.

#6. When whatever experiment is done, keep experimenting… at a certain point, you just have to wait. When you’re at the “wait” period, you start the process for the next innovation.

#7. Rinse and repeat, however, here’s where it gets interesting. All the money that comes BACK from results of the innovation fund, go BACK into the innovation fund.

#8. In essence, you’re running an internal incubator. From a business perspective, this means that your core business and strategy stays the same until the next “innovation” transitions to be the main business.

#9. Keep running this until, at which point, you start taking money out of your innovation fund to pay yourself back to your main business.

#10. Innovate, never die and be ahead of the market for the rest of your life.

It is that simple.
Now, go get innovating 🙂

– Scott

Here’s a few things I thought you might love…

1. If you’re not signed up for Online Business Owner Digest, I highly recc. that you do. 

2. One of the innovations I tried in the past few months was sponsorships. I think it is the future. And after doing it for few months and helping my mentees implement it, I share what I learned in this new workshop. It happens live on Wednesday. Don’t miss out.

That’s it for this 7-figure letter. I publish new one every Sunday. Make sure to signup here to get yours.

Four Frameworks

FREE Guide for Entrepreneurs

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If you’re an expert, author, course creator, coach, mentor or service provider making between $10-500k/mo, you are exactly who I made this for…

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