So, welcome to the podcast. In today's episode, we're looking at the question of why do you need to go for a million pounds in revenue as a construction business?  

Interesting question because, I mean, if any of you have been following me for a while, you might have noticed in my book and in a lot of my blogs, I often talk about this goal of creating a million pound plus construction business. And I often get asked, Greg, why do you always talk about a million pounds? Why don't you say a 500K business or a 5 million pound business? Where did this number of a million pounds come from? Well, I haven't just plucked this figure out of thin air. There are specific reasons why I feel a million pounds revenue is a really good number to aim for.  

But I also want to caveat that with it does depend on what type of construction business you have and if it's a business that's maybe particularly reliant on materials, or is it one where revenue is driven purely by labor. Because if it's a business that's just purely labor only, then yeah, it's true that the figure could well be less than a million pounds. But for the purpose of today's podcast, I'm just going to focus on a typical construction company that supplies both labor and materials. So let's just first talk about why would you even think about growing a company to at least a million pounds in annual revenue? Well, my mission is to help construction business owners achieve more time, more freedom, and more money.  

So let's break that down a little bit and see why the figure of a million pounds is essential for being able to achieve all of that time, freedom and money. So first of all, let's focus on time. Because before freedom and money, time is probably the most precious commodity out of everything, isn't it? Out of all that we have now, we know, don't we can't buy time, you can't create more time. And it often feels like time escapes us, doesn't it? Time goes by so quickly, doesn't it, as you get a bit older. But one thing we can do is use our time wisely and we really want to make the best use of our time. Now, for most people, and this isn't for everyone, but for most people, the majority of us want to live a fun and inspiring life.  

They don't want to be working on the tools five days a week. Now, there's many that find themselves working on the tools during the day, and then they go home to do paperwork at night, or they're out visiting clients estimating and they could be doing this five or six days a week. I know when I first started out on the tools and was trying to grow my business, this is something I had to do and it's really time consuming, it's such a drain. But imagine someone gets caught in that rat race of time and they're doing that for 1020 or more years. Do you think they could honestly look back on that time and say that they've used their time wisely? Or will they feel that actually, maybe, have I really wasted time? Now, this isn't the case for everyone.  

Like I said, some people just absolutely love working on the tools, don't they? It's a complete passion for them. And for them, that is the inspiring life that they want to lead. So that's fair enough. So for ones like that, a million pound business is probably just not suitable. And nor should it be, if that's what their passion is. They'll want to carry on as long as they physically can to work on the tools. But for the majority of us, that's not the case, is it? The majority of people are working on the tools as a means to an end. It's just to pay the mortgage, it's to pay the bills, to put food on the table for the kids and the family.  

And some would love nothing more than to be a manager of their business, to give them more time, but they just simply can't afford to do it. And this is where I say you have this goal of running a million pound company. This is where it comes in. Because if you're running a million pound company, you cannot physically be on the tools ever. If you're running a million pound company, you just cannot physically get on the tools day in, day out. And really, to get to that level, you would have had to have made the jump and you would have had to have stepped into a management role. Now, how you manage to get off the tools and get to a million pound is another subject altogether for another podcast.  

But the purpose of this episode, we're just looking at why you will want to have this goal. Now, taking that a step further, not only would you want to be off the tools as a manager, but if you are running a million pound company, you'd really want to have enough revenue to employ a small and decent team around you that can help you run the business. And that's really crucial to winning back your time, having that efficient team around you. Because I speak to so many business owners who are they might be at the turnover mark, and they are just run absolutely ragged. Granted, they might not be on the tools as much anymore, but they still have no time at all in their lives because they're just doing absolutely everything in the business.  

All the admin, all the project management, all the marketing, all the sales, the list goes on and on. So sometimes for them, it can seem like they're actually in an even worse place than when they're on the tools. They've got even less time because they're just doing so much to keep the business growing. So it's really crucial to break through these barriers when you get in the 350 to seven k mark, it can be a really sort of dangerous area to be in business. And I wrote about this a lot in my book. I got stuck there for many years around this mark, and it was a real struggle to push through that barrier. But you need to do it.  

You need to push on and get to the million pound to enable you to get this small, decent, efficient team around you if you want to be able to win back some of your time. So that's reason number one. If you want more time, you need to get a million pound company to be able to afford a decent and small, efficient team working with you. Now, we said that it wasn't just time, was it? We said that we want time, freedom and money. So let's look at the second point freedom. Now, freedom, it's actually directly linked to our last point about time, because you can't have true freedom in business if you don't have any time. But what is freedom? If you were to describe freedom, what does freedom mean to you?  

So for me personally, if I think about freedom for me is being able to decide if I want to take a couple of weeks off and I want to go on vacation. I want to know that I've got someone looking after things for me in the business, there's nothing worse than, and I've done this before, sitting on the beach and you're glued to your emails because you haven't got anyone there that can look after things for you. So is it really a holiday? Have you really got freedom? If you're doing that? You haven't, have you? So freedom is about being able to take time off and know that the business is in someone's capable hands. Freedom is about not stressing about cash flow.  

And freedom is about having enough cash in the business to be able to pay the VAT bill or to be able to pay your suppliers on time. And freedom is about being able to do a job that you love and are passionate about, rather than having to spend your entire day firefighting or resolving problems in the business. That's real freedom. And again, the only way to achieve real freedom in business is directly linked to .1, isn't it? You need a small and efficient team around you so that they can take care of things when you decide to go on vacation, they look after things when you go away, they've got your back. They know not to disturb you when there are problems in the business.  

You've got a senior manager or maybe a site foreman or a project manager in place that takes on those problems before they come to you. So that gives you freedom to focus on the more important things. You're not firefighting all the time, but you can't get to this freedom if you have a small company. So you need a million pounds revenue, you need a decent sized business to be able to achieve freedom and to have this team around you. Now, the third point was, we said time, freedom and money, didn't we? So money is the third point. Now, of course, we're all working, we're all in this game because we need money, don't we? We need to pay the bills, we need to pay the mortgage, we want to feed our family, we all need money, but money goes beyond that.  

Just linking it again, I've said it a few times, we want time, freedom and money. And if we've got time and freedom, we really need enough money to be able to go enjoy that time and freedom. We don't want to be on the breadline, do we? As that causes real stress. And you think about if you've taken on staff, you're winning a lot of work, there's a huge amount of effort that is taking you to get up to a million pound business. And, rightly, if all that effort that's gone in and all those years of developing the business to get you there, rightly, you want to be rewarded for that hard work by earning decent money, of course. And there's nothing wrong with that. We've all heard the saying, haven't we, that turnover is vanity and profit is sanity.  

We've heard that one, and that's so true, isn't it? Profit is absolutely crucial in the business, but at the same time, you cannot generate the profit you deserve without high enough turnover, because you could have the most profitable company in the world. But if you were turning over 1000 pounds a year, it could be 100% profit. You're only going to make 1000 pounds. So you need the turnover in the business, high turnover, in order to generate high profits. Now, if you were running a million pounds construction business, and you were running it efficiently, it's very achievable for you to be able to, say, get twelve to 15% net profit in that business. Now, that could mean you're earning well over 100,000 pounds profit a year for you to be able to take 100 grand out of the business. Now, can you imagine taking that?  

Maybe you are taking that at the moment, but if you were earning 100,000 pounds, that in a year, is more than a lot of lawyers earn, more than doctors earn, more than many other professionals that spend a lot of time at university. If you were earning 100,000 pounds a year, you'd be in the top 5% of all earners in the UK. And rightly so. If you managed to build a business to a million pounds, well, why shouldn't you be earning top money for your efforts? So, just going back to it all, just summarizing, all in all, a million pounds revenue a year isn't just a figure that's been plucked out of thin air.  

This really is a great figure to have as a revenue goal for most construction businesses, as it really can give you more time, more freedom and more money for your efforts. Now, how you get to a million pounds, well, that is a subject for another day, like I said, so keep listening to the podcasts and as we go through them gradually, you're going to get a lot of tips and a lot of strategy on how you can grow a million pound plus construction business. If you'd like to work with me to fast track your construction business growth, then reach out on www. Dot developcoaching co UK.