What Revenue Milestone Are You At And What Does That Mean?

We have been talking about this quite a bit lately. Business owners who don’t think differently or change what they are doing can get stuck at a revenue level. Each level of revenue often brings new challenges, requiring shifts in strategy, processes, and management style.


These are the typical revenue milestones where entrepreneurs may need to rethink their approach:

1. $100,000 – $300,000: Proving the Concept

Key Focus: At this stage, the primary goal is validating the business model. Entrepreneurs are often handling most tasks themselves or with a very small team.


Challenges: Limited resources, juggling multiple roles, and proving that there is consistent demand for their product or service.


What Needs to Change: Entrepreneurs may need to start delegating tasks, investing in marketing, and establishing a clearer operational structure. This gets you to the nex level-

2. $1 Million: Establishing Systems and Processes

Key Focus: Reaching $1 million in revenue is a major milestone that usually signifies a strong product-market fit. However, what got the business to this point may not be sufficient to grow beyond it.


Challenges: Scaling beyond this level requires consistent processes, better organization, and more efficient operations. Entrepreneurs often struggle with time management and may find themselves overwhelmed.


What Needs to Change: This is where businesses need to implement standard operating procedures (SOPs), hire key team members (especially in areas like sales, marketing, and finance), and invest in software to automate processes. At this level, businesses need robust systems for customer relationship management (CRM), enterprise resource planning (ERP), and more sophisticated financial controls. Entrepreneurs must learn to delegate effectively, relying on their leadership team to execute the strategy. Processes must be scalable to handle further growth without breaking down. Many companies implement systems like the Entrepreneurial Operating System (EOS) to bring structure and accountability.

3. $5 Million: Building a Strong Team

Key Focus: At $5 million, a business is no longer just a startup; it’s a small company with more complex needs. The founder must transition from doing to leading if they haven’t already done so. The entrepreneur’s role shifts to that of a CEO focused on vision and strategy rather than daily operations


Challenges: Leadership becomes a critical issue. The founder can’t do everything, and micromanaging will hinder growth. Issues with company culture and communication across departments can emerge.


What Needs to Change: Entrepreneurs need to focus on building a leadership team. Hiring specialists for various roles (HR, marketing, operations) becomes essential. It’s also important to establish a strong company culture to ensure alignment and engagement across the organization. If EOS is strongly entrenched across the company this step might be already done.

4. $10 Million: Strategic Expansion

Key Focus: At $10 million, the business is likely competing with larger companies, and strategic expansion is key to continued growth. Entrepreneurs need to consider expanding to new markets or diversifying their offerings.


Challenges: Managing a larger team, ensuring consistent product or service quality, and navigating more complex financial structures. Entrepreneurs may also face increased competition and pressure to innovate.


What Needs to Change: This is when strategic planning becomes more important than ever. Entrepreneurs must build a robust mid-level management team, invest in technology and infrastructure, and possibly seek outside investment to fund expansion. Data-driven decision-making becomes crucial for scaling successfully.

5. $20 Million – $50 Million – $100 Million and Beyond: Becoming a Market Leader & Transitioning to a Legendary Enterprise

Key Focus: The business is now possibly competing at national or global level.The focus shifts to dominating market share and long-term sustainability.


Challenges: With more employees, more revenue streams, and possibly multiple locations, operational complexity increases. Entrepreneurs must balance growth with sustainability, profitability, and maintaining a strong company culture.Leadership complexity, increased competition, regulatory issues, and the need to innovate constantly. Entrepreneurs must keep an eye on market trends and emerging technologies to stay ahead.


What Needs to Change: This is where entrepreneurs transition fully to a CEO or board-level role, focusing on big-picture strategy. They need to hire seasoned executives, implement corporate governance, and possibly explore mergers, acquisitions, or public offerings to fuel further growth


Each revenue milestone brings its own set of challenges, and what worked at one level might not work at the next. Entrepreneurs must be willing to adapt, delegate, and continuously refine their strategies to grow their businesses effectively. Understanding these transitions and preparing for them ahead of time can help entrepreneurs navigate the complexities of scaling and achieve long-term success.

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Outsourced Accounting vs. Fractional Accounting: What’s the Difference?

By Alisa McCabe • April 15, 2025
As a service-based business owner, managing finances effectively is key to growth and profitability. When looking for financial support, you may come across terms like "outsourced accounting" and "fractional accounting." While they may sound similar, they serve different purposes and offer unique benefits. Understanding the differences can help you decide which approach best suits your business needs. What is Outsourced Accounting? Outsourced accounting refers to hiring an external firm to handle bookkeeping and financial reporting tasks on an ongoing basis. This solution is ideal for businesses that need consistent, reliable financial management but don’t require a full-time, in-house accounting team. Key Benefits of Outsourced Accounting: Cost-Effective: More affordable than hiring an internal accounting department. Scalability: Services can be tailored to your business size and needs. Access to Expertise: Work with professionals who specialize in bookkeeping, payroll, and tax preparation. Technology-Driven: Many firms use cloud-based software like QuickBooks Online for efficiency and real-time reporting. What is Fractional Accounting? A fractional accounting firm provides higher-level financial strategy and decision-making support, often acting as a part-time CFO or controller. This approach is best for businesses that need more than basic bookkeeping but don’t yet require a full-time financial executive. Key Benefits of Fractional Accounting: Strategic Financial Oversight: Helps with budgeting, forecasting, and financial planning. Higher-Level Expertise: A fractional CFO or controller can provide insights beyond day-to-day transactions. Customizable Support: Businesses can engage a fractional firm for a few hours a week or month based on their needs. Growth-Focused: Ideal for scaling companies needing financial strategy without the full-time cost of an in-house CFO. Which One is Right for Your Business? The choice between outsourced and fractional accounting depends on your business size, complexity, and financial goals. Choose Outsourced Accounting if: You need reliable bookkeeping, payroll management, and financial reporting but don’t require deep financial strategy. Choose Fractional Accounting if: Your business is growing, and you need financial leadership, cash flow management, and strategic planning without the cost of a full-time CFO. The Best of Both Worlds Some firms, like First Steps Financial, offer both outsourced accounting and fractional CFO services. This allows businesses to start with outsourced accounting and scale up to fractional services as they grow, ensuring they always have the right financial support. Both outsourced accounting and fractional accounting firms can play a crucial role in your business’s success. The key is understanding where your business stands today and what level of financial expertise will help you achieve your long-term goals. If you’re unsure which option is best for you, First Steps Financial can help! Contact us today to discuss your needs and find the right financial solution for your business.

Train, Trust, and Let Go: How Great Leaders Build Confident Teams

By Alisa McCabe • April 4, 2025
Don’t overinspect or oversupervise. Allow your leaders to make mistakes in training, so they can profit from the errors and not make them in combat. -Col. Glover Johns We had just hit the jackpot. A Chinese submarine crossed our path in an area where no one expected it to be. This should have been a massive win for U.S. intelligence, our ship, and us as SONAR technicians. But there was one problem: no one made the call. The submarine was only discovered in post-analysis days later. What should have been a career-defining success became a failure for our SONAR team due to hesitation and lack of confidence. One of my teammates saw the submarine—its frequencies matched, it behaved like a submarine, and all the indicators were there. But he didn’t speak up. He was afraid of being wrong. When this failure came to light, our team had a meeting to figure out what went wrong. The teammate who had seen it was devastated. He felt like he had failed the entire crew. Our immediate supervisor didn’t help—he picked apart every mistake, repeatedly asking, “How could you miss this? I’ve shown you this a million times!” After a few minutes of this, his boss stepped in. He asked how we were being trained. The answer was obvious to all of us. Our supervisor was a doer, not a teacher. He couldn’t stand to see mistakes, so instead of letting us learn, he micromanaged and took over. The result? We lacked the confidence and knowledge to make decisions because we had never been trusted to. At this point, you might think, “What a terrible leader!” And you’d be right—at least in this instance. But what you might not realize is that even good leaders fall into this trap. And you’re not immune to it either. If you have kids, I guarantee you’ve stepped in and done something for them because they were taking too long. If you run a business, you’ve likely taken over a task because you didn’t trust an employee to do it right. It feels like the right move in the moment, but it’s not. It is the easy way out. The answer is simple: real leadership requires patience. It’s easier to take over than to teach. So how do we break this cycle? It takes discipline. Step one: provide the right training. No one becomes an expert overnight, but they need a foundation strong enough to work from. Encourage questions and never make people feel stupid for asking. If they’re afraid to ask, they’ll be afraid to act. Step two: let go. You have to trust the people you train. Set expectations clearly and then step back. Resist the urge to jump in. Step three: debrief. Go over the work. Point out successes and failures. Then, instead of just pointing out what went wrong, show them how to do better. Follow these steps, and I guarantee you’ll build a team that has the knowledge and confidence to make the call. Written by: Marc Chianese, CPA Candidate

The Importance of Clean Books: How We Help Small Business Owners Stay on Track

By Alisa McCabe • March 21, 2025
As a small business owner, keeping your financials in order is crucial—especially when it’s time to file taxes. Many small business owners come to us for cleanup services because they realize their books don’t reflect their actual business activity. Without accurate financials, you’re flying blind when it comes to planning, decision-making, and tax compliance. Here’s how we help small businesses clean up their books and get back on track: Step 1: Assess the Situation Our first step is to review your books and identify: What looks incorrect: We spot errors like negative balances, uncategorized transactions, or inconsistencies. What needs to be cleaned up: Issues like unreconciled accounts or miscategorized expenses. How to improve going forward: Suggestions to ensure your books remain accurate and useful. Common Issues We See in Small Business Books Here are some of the most frequent problems we uncover: Uncategorized transactions: These don’t show up in your financial reports, leaving you with an incomplete picture of your business. Bank and credit card accounts not reconciled: Without reconciliation, you can’t trust the accuracy of your financials. Large balances in the undeposited funds account: Often caused by customer payments not applied to invoices, leading to double-recorded income. Negative balances on the balance sheet: This usually indicates recording errors, like misapplied payments or incomplete loan setup. Inconsistent expense categorization: For example, telephone bills recorded under different accounts, making it harder to compare year-over-year trends. Step 2: Clean and Reconcile Once we’ve assessed your books, we tackle the cleanup process step by step: Categorize all transactions in holding: Ensuring they appear in your financials. Reconcile every bank, credit card, and loan account: Without reconciliation, there’s no confidence that your numbers are accurate. Apply customer payments to invoices: This prevents double-counting income and ensures your sales figures are correct. Review accounts with large balances: For example- A large sales tax liability may indicate payments are being recorded as expenses instead of reducing the liability. A negative loan balance could mean the original loan wasn’t recorded properly. Check for consistent categorization: We run reports to ensure, for example, that all telephone bills are categorized under the same expense account. Step 3: Build Confidence in Your Financials After cleaning up the books, you’ll gain: Accurate financials: Confidence that your reports reflect reality. Insights into past trends: So you can make informed decisions about the future. Ready for filing taxes: Avoid overpaying taxes by ensuring income is recorded only once. For instance, if customer payments are recorded as new income instead of being applied to existing invoices, you’ll overstate your revenue—and could end up paying taxes on double what you actually earned! Step 4: Prevent Future Problems We don’t stop at cleanup. We provide training and tips to help you: Keep your books accurate moving forward. Spot and fix issues early before they become major problems. Why Accurate Books Matter Accurate financials allow you to plan for the future of your business. Whether it’s forecasting cash flow, preparing for growth, or filing taxes, clean books give you the clarity and confidence to make smart decisions. Ready to clean up your books and take control of your financials? We’re here to help! Reach out to get started. Written By: Diane Roberts

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