7 Steps to go from $1M to $5M FAST
7 Steps to go from $1M to $5M FAST
Scaling a home service business from $1 million to $5 million requires strategy, systems, and the right mindset. Over the past eight years, I’ve worked with high-performing seven-figure home service businesses that generate 30% profits annually. Through this experience, I’ve identified seven key steps to help you replicate their success.
Step 1: Create and Stick to a Profitable Price Book
Most businesses reaching $1 million in revenue have some type of price book in place, but often, it’s outdated and doesn’t reflect rising overhead costs.
To create a profitable price book:
- Analyze direct expenses (labor, materials, equipment).
- Assess overhead expenses (rent, customer service reps, marketing, insurance).
- Add a profit margin (20-30%) on top of your costs to ensure sustainable growth.
Review and update your pricing annually to stay competitive and profitable. Once you lock in profitable pricing, you can transition to operating on a percentage-based budget.
Step 2: Build a Percentage-Based Budget
Successful home service business owners use a percentage-based budget rather than relying on cash flow from a single checking account.
Inspired by Profit First by Mike Michalowicz, this approach involves:
- Setting up separate bank accounts for income, payroll, operating expenses (Opex), taxes, and profit.
- Allocating percentages from each revenue deposit into these accounts.
- Committing 3-10% of revenue to a marketing budget to fuel consistent lead generation.
A percentage-based system scales naturally as your revenue increases, allowing you to reinvest in your business without overextending resources.
Step 3: Implement a Professional Operating System
As Tommy Mello says, “Once you go from $1 million to $10 million, the hustler must die, and the leader must be born.” Growth requires delegation and structure.
Gino Wickman’s Entrepreneurial Operating System (EOS) from Traction helps businesses structure their teams:
- Owner → COO → Ops Manager
- Sales & Marketing Team
- Finance & HR Team
Clearly defining roles and key performance indicators (KPIs) ensures accountability. Weekly meetings and scorecards help track progress and push team members toward measurable goals.
Step 4: Ask ‘Who, Not How’
At $1M, you may have been the go-to problem solver. But to scale, you need to shift your mindset to who can take on tasks instead of asking how to do everything yourself.
In Who Not How by Dan Sullivan, he explains how hiring fractional experts can help fill key roles without the overhead of full-time employees. This could include:
- A fractional CFO to manage finances.
- A marketing agency to generate leads.
- A commission-based salesperson to boost revenue.
Focusing on finding the right people allows you to scale efficiently without burning out.
Step 5: Leverage the Replacement Ladder
Dan Martell’s Buy Back Your Time introduces a structured approach to replacing yourself in daily operations. His Replacement Ladder outlines the order in which you should hire:
- Admin Support – A customer service rep (CSR) to handle scheduling and calls.
- Delivery Personnel – Additional technicians to fulfill jobs.
- Marketing Support – Outsource execution to avoid being the bottleneck.
- Sales Team – Train salespeople to close deals instead of doing it all yourself.
- Management – Hire operations or general managers as you grow toward $10M.
By following this system, you systematically free up time to focus on strategy and growth rather than day-to-day tasks.
Step 6: Know Your Numbers
If you don’t track performance metrics, you’re flying blind. To grow confidently, you need to monitor:
- Return on Ad Spend (ROAS) – Ensure marketing efforts generate profitable leads.
- Lead-to-Close Ratio – Track sales efficiency.
- Year-over-Year Comparisons – Benchmark monthly revenue, leads, and conversions.
Setting up a CRM and lead management system ensures accurate tracking, helping you optimize operations and improve profitability.
Step 7: Adjust Your Marketing Budget for Growth
Many business owners hesitate to increase marketing spend, fearing inefficiency. However, a well-structured marketing budget should scale in proportion to revenue.
One client we worked with had a high-performing ad channel yielding an 8X return but hesitated to invest further. By increasing their marketing spend strategically, they added $100,000 in revenue in just four months.
Scale Up Your Business
Scaling from $1M to $5M requires profitable pricing, strategic budgeting, structured operations, delegation, data-driven decision-making, and marketing reinvestment.
If you’re looking for a trusted marketing partner to help you implement these strategies and fill your lead pipeline, visit our website to book a call. Worst case? You walk away with valuable insights. Best case? We help you hit your $5M goal faster than you thought possible!