April 2, 2022

3 steps we’re taking to become a $1million ARR business

Picture with title - 3 steps we’re taking to become a $1million ARR business
Picture with title - 3 steps we’re taking to become a $1million ARR business

We’re on a mission to become a $1million ARR (Annual Recurring Revenues) agency by focusing on process, content marketing, sales strategy and SaaS. The steps we are taking have helped our customers in the B2B Saas space create great websites and convert leads.

We’re eating our own dogfood and applying these techniques ourselves, and you can too its no secret.

What does $1million ARR mean? ARR stands for annual recurring revenue. It essentially means that your business has a consistent monthly income over a 12 month period of $1million per year ($83k/month). This is some pretty big numbers so you need to have a solid process in place. To put that in perspective, we currently sit at just over $700K Annual Revenue not recurring.

Marketing - how do you find your customers?

Sales - how do you convert them?

Process - how do you keep them?

1 - Business Model

  • I didn't just wake up one morning with a magic wand and a plan. There was and is a lot of work involved!
  • Here are a fews things I've done and am doing that have made all the difference:
  • Choose a niche (rather than mass market), I decided we’re too mass market. We’re going to focus on Saas businesses. If you can narrow further thats even better, we’re going to B2B within SaaS.
  • Decide on the problem you’re going to solve for that niche - e.g “Mawla is the content conversion OS for B2B SaaS. We provide the tools to gain more visitors, increase customer acquisition and retention, and build a better marketing website”
  • Create a service that solves that problem, and make it productised (reduce the amount of human time needed, make it repeatable)
  • Make sure you’re earning MRR (monthly recurring revenue) from your clients! We’re still working on this, support is the obvious MRR but the cost and risk almost outway the MRR, so we’re working this model.

2 - Marketing/Sales

  • Outsource your weaknesses - in my case this meant hiring in a consultant head of marketing - someone who can work with me for a few months to get things set up, and help me leave behind everything limiting us from growing. Even if this consultant is expensive, it’ll be worth it as they can give your business the boost it needs up front.
  • Be clear on what we do (and what we don’t do)
  • Discover your ideal customer persona (ICP) - who would most benefit from your product? This will give you more focus when it comes to generating leads, and help with conversion rates. It will also mean you can market more effectively.
  • Figure out how much your customers are willing to pay for your product by running Discovery Workshops with them - this will ensure their investment is aligned with your business model and service. It's worth looking into their business needs - this will let you to pitch your product more effectively. A Discovery Workshop can help with this, it will ensure the investment is aligned and valuable for both parties.
  • Second, I'm rebranding—and while I may not need to do this now, I'll eventually want to. My brand should be radio-friendly (meaning if someone hears my name on the radio they can google me). Double-barrel names work well for that, like Led Zeppelin. The brand name should also be aligned with the service and easy for customers to say.
  • Third, I'm updating my website. My website should reflect the service and the customer's journey in discovering what I do and how I do it. It should be SEO-friendly and audited regularly to align with keywords and all that.
  • Choosing the right way to package and position our service, and using tools like Wynter.com to try out our copy and positioning against a panel of pros.

3 - Process

  • First off, we need to run a tight ship. We need to create systems, processes, and structure around everything we do. This will allow us to work as efficiently as possible moving from one project/lead to the next. There is no one area of the business that doesn’t need this approach applied, it needs it for every day operations, for dealing with staff issues, for onboarding new clients, for billing etc. If we don’t do this then we need more people just to keep up with demand never mind get ahead of it.
  • The SaaS model is one I’ve always been fascinated with, subscription based revenue seems like the holy grail of business. It allows you to plan revenue more accurately and gives more freedom to invest in longer term growth. It’s something I’m aiming for as a goal for my business, but it’s important that it happens naturally and that I make sure every step along the way is right for our clients, our team and our business.
  • My first step was to implement a process for tracking my progress, and I’m using an OKR framework - which stands for Objectives and Key Results. The idea is you set 3-5 Objectives, and each objective has 3-5 key results that measure the success of the objective. This helps me focus on what’s important, and have some data to back it up. It also forces me to be specific about what I want to achieve. It can’t just be the general goal of “make more money”, it needs to be something like “Create content that gets 10k views per month” or “Run 4 events that get at least 80 attendees each”
  • So my objectives for 2022 are: Grow our MRR by 50% to 20k per month Grow our one off business by 20% to 800k per year. Increase average project profitability by 30%.
  • Each project team is given OKRs, regularly around project budgets, profitability margins, and sprint based. For example at the beginning of the project we estimate the size, and sprints, and estimate what % of project completion we’ll be at at the end of each sprint. So “By sprint 3 we should be 65% of the way through the project. Keeping the profitability margin at 30%”
  • Create a repeatable design/branding experience that leverages our existing work, and reuses as much as possible from what engineering have built.
  • Create a reusable website engine with all the marketing hooks, generic website modules, and extensibility setup.
  • Create a standard web template based on a standard Saas B2B site that is fully customisable.
  • Create and design landing pages, and templates thank you pages, content pages using the website engine.
  • Build out a standard stack of blog posts for each client that can be adapted/re-purposed/localised as needed by their team to get them started with content marketing.
  • Develop an onboarding process for new clients based on the above steps so they can start getting value from the product we provide as soon as they come onboard.

Hopefully, the steps I’ve shared with you above have given you some insight into how I’m building my agency into a $1million business. And really, these steps—if followed—should be applicable to anyone that is thinking about building a profitable business. The key is to find a niche you love and to apply the principles that we have discussed here to it.

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