When I was coming up in the world, Seventeen magazine and Cosmo “helped” me to understand some “useful” metrics about being a woman.
For example, 36-24-36 was the ideal bust to waist to hips ratio. (Sir Mix-A-Lot would later clarify that this ratio was only ideal if you were 5’2.)
There was also a commonly held truth that if you could “trap a pencil” underneath your breasts they were “too big.” But if you couldn’t fill a champagne glass with said mammary glands, they were “too small.”
My point: women are subject to a lot of metrics and standards. I have no problem with metrics and standards, provided they are meaningful and contextualized, versus arbitrary and manipulative. Which brings me to the topic of this article: Why is “7 figures in revenue” a worthy goal for a woman entrepreneur?
As my team and I created and launched our new website, my job was to stay at twenty thousand feet and look at our work and messaging holistically.
I realized that, in not taking the time to articulate why $1M+ in annual revenue is a meaningful metric, then our work may inadvertently become the woman entepreneur’s version of “36-24-36”… yet another standard of perfection women are pressured to attain.
But building a company capable of generating $1M+ in revenue is neither an arbitrary standard nor is it an empty marketing ploy. It’s a tremendously meaningful measure. Here’s why.
The Anatomy of a Classic Woman-Owned Consulting or Service Business
As a solopreneur who sells your skills and expertise, you can – with hustle, connections and marketing know-how, build a company that does anywhere from $50k per year (the mean revenue for women-owned companies in Canada) to $400k per year in revenue.
This is a huge accomplishment and tremendously exciting. If this is you – congratulations! Get it, girl. Enjoy your success.
However, within 2-3 years of operating a solopreneur business like this, you may begin to experience the limitations of this business model.
The limitations are that the money stops flowing when you stop delivering, and you ARE the business. Your clients want YOU and your labour. This can be tiring and high pressure. You have likely now grown accustomed to making good money – and your lifestyle may have inflated to somewhat match your income. You may wish to earn more, but you don’t necessarily have “more” to give in terms of time and energy. Things are good, you are making money, and you’re grateful for what you have, but you don’t necessarily have the level freedom and flexibility you want and deserve. Lots of people are ok with these limitations. But some women entrepreneurs choose to move beyond them.
One pathway is to transition your business model so that it can grow bigger than you and give you the money, freedom and flexibility you want. This transition will almost always require the following:
· an investment in people,
· the creation of assets,
· and the patient building of systems and structures.
Let’s say you did the work I describe above – you hire a couple of rockstars for a combined salary of $185K, take 3-6 months to build out your systems, invest in a good lawyer to help you protect your IP, and a quality coaching program to help you stay clear and purposeful. You double your revenue from $300K to $600K. This sounds great! But you are no longer a solopreneur who can keep most of what you earn. You’re making more revenue but you may still run into cash flow issues because your expenses are higher. (If this is you…GOOD JOB! There’s nothing wrong here. It’s a normal rite of passage of business growth.)
I call the phase of growing a service or knowledge business from the $300K-$900K range the “adolescence stage”. There’s lots of potential and momentum! And lots of growing pains.
I’ll sometimes hear women entrepreneurs going through the very real challenges of this growth stage express that “it would have been better to stay small.” That’s certainly one way of looking at it.
But in my experience, this “stay small keep it all” approach is limited in one crucial way. You have grown big enough to experience some growing pains, and the very real challenges of scaling. But your revenues aren’t YET high enough, nor your systems and team YET strong enough to experience the ROI that is often just around the corner.
In practice, when you thoughtfully scale your service your knowledge based business to 7 figures through strong assets, systems and team (which is what we teach in our programming), the 7 figure mark is where you truly begin generating the cashflow and profits that give you C.I.A – cash, influence and autonomy. And the C.I.A. that comes from $1M+ in annual revenue makes the 3 things I outline below possible.
The Significance of $1M+
Three core reasons drive our specific mission to double the number of women founders who sustainably scale to $1M+ by 2030 through business coaching, entrepreneurship education and storytelling with a gender lens. These three core reasons are
· Innovation and
When I was a girl, my mother – who was a stay at home mom at the time, and lacked access to her own money and bank account outside our family’s money – told me that money is power, and I should always make my own.
Her words were recently echoed by Melinda Gates, following the release of the 2022 Goalkeepers Report by the Bill & Melinda Gates Foundation. The report tracks the world’s progress toward the UN’s Sustainable Development Goals, which sought a 2030 deadline for the achievement of global gender equality. A specific and concrete component of gender equality, according to Melinda Gates, is a woman’s ability to have and control sufficient money in her own bank account to preserve her economic wellbeing for her entire life.
But the global pandemic has been a terrible thing for women’s economic empowerment. The Goalkeepers Report showed gender equity has in fact gone backwards and won’t be reached until 2108, 3 generations later than hoped for.
The sad reality is that, for all our GirlBoss cultural obsession, despite the invitations to negotiate harder, ask for more and take our seats at the table, women are economically worse off than we were 10 years ago.
Here are some basic facts. The majority of the world’s poor are women. Not only do women continue to earn 83 cents for each dollar a man earns, the average American woman will have saved 30% less than the average man by retirement, according to the Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA), a Fortune 100 financial services organization. And not only do we save less money than men, we live an average of 6.3 years longer, according to StatsCan.
There are undoubtedly systematic issues that trap women workers AND business owners in cycles of poverty and underearning. Through our Safi Insights arm, we are working on practical project with government, NGO and corporate partners to address systemic barriers to economic wellbeing for women.
But based on our experience working directly with hundreds of women business owners, we have found that many women underestimate how much money they need to make and save to ensure they are well-provisioned their entire lives. By emphasizing the power and freedom that $1M+ revenue provides, our goal is to ensure women entrepreneurs equip themselves and their teams with the practical means to achieve sustainable economic well-being.
Innovation is critical to the long term sustainability of your business. While innovation and creativity are sometimes used interchangeably, they aren’t the same. Creativity drives unique ideas. But in order to be innovative something needs to be unique AND useful.
Innovations might be launching a new product, a new process or upgrading existing systems or offerings. Innovation is key to your company’s long term sustainability because it allows you to adapt to change, grow into new markets and distinguish your company from the competition.
But there’s a problem. Innovation is usually a long-term play that offers little ROI in the short term. Simply put, great and useful ideas sometimes take more time and money to implement than many women entrepreneurs account for.
This is what the entire venture capital (VC) system is all about. VC refers to capital (money) that is invested in new businesses, processes or products that are considered high risk because they are unproven. The VC industry – worth an estimated $211B globally in 2021, is based on the reality that genuinely useful ideas take time and money to develop and bring to market.
But there’s a massive problem for women entrepreneurs who want and NEED to innovate in order to generate sustainable growth. We have been mostly shut out of the venture capital industry. According to research published in Bloomberg, just 2% of VC went to women founders in 2021. (For women who had a male co-founder, the share increased to 15.6%, you’ll be irritated to know).
The reality is that if you are a woman entrepreneur who understands that the long term sustainability of your company is anchored in your ability to innovate, the reality is that you will need to find ways to finance that innovation yourself.
What’s more – innovation generally takes more time and more money than you originally expect. When you are innovating, you will make mistakes, take wrong turns, need do-overs. This is a normal part of innovation. And it costs time and money. Having a 7 figure business gives you the CASH FLOW and PROFITABILITY to create a substantial cash reserve you can use to fund innovative projects and ideas. This reserve gives you the space, time and resources to actually bring your innovations to market.
The third core reason we are specific about our goal of helping women entrepreneurs create 7 figures in revenue is because of who she must become to accomplish this stretch goal. (For practical tools on how to build entrepreneurial resilience and bone-deep confidence, check out our free leadership development e-course for women entrepreneurs, Radical Conviction.) Our work and research into women entrepreneurs has uncovered that growing a company to over a million in revenue is a goal that fundamentally transforms the woman who pursues it. This finding is certainly echoed by my own experience.
Creating a company that generates over $1M+ in annual revenue means you must build something that is bigger than you. In the process, you will likely see some of the following transformations in your life:
· You will be forced to take risks, and this will build your resilience.
· You will necessarily build pathways through unchartered territory and new circumstances, and this will build your self-trust.
· You will experience the painful weight of other people’s expectations and projections, and navigating this will build your sovereignty and independence.
· You will have more demands on your time than you have capacity to fulfill and this will strengthen your boundaries, your systems and your innovations.
· Your success, hardships and triumphs will inspire other people in your family, life and community to pursue their own meaningful stretch goals.
To be clear: our goal of helping women entrepreneurs scale sustainably and specifically beyond $1M+ in revenue is not another “standard” for women entrepreneurs to measure themselves against and come up wanting.
It’s not a benchmark that separates “exceptional women entrepreneurs” from everyone else. Nor is it a marketing ploy designed to get attention and drive sales.
$1M+ in revenue is a worthy goal that — through its pursuit, not necessarily its attainment – has the power to transform you and your business, allowing you to embody more of who you truly are, and unlock more of your most impactful innovations.
Find out how you can reach $1M+ in annual revenue. Download The Seven Figure Business Ecosystem, your free guide to building a scalable service-based business capable of generating millions of dollars.
To learn more about how we help women entrepreneurs scale their businesses sustainably, check out our coaching program, Power + Presence + Position
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