How to Make Your First Million

signatureI saw a really interesting segment on the news yesterday. It was about a fourteen year old boy who was already a millionaire thanks to his shrewd head for business. How did he do it? A year ago he started a business selling car tax reminder stickers – a brilliantly simple idea that catered to an unmet market need. Using simple software on his home PC, the teenager made over £100,000 in his first year – amazing!

What was even more amazing was the fact that he invested some of his profits in an area of land. Although he had intended to turn this into a campsite, a property development company quickly bought him out for a whopping £2million, turning him into a millionaire overnight.

I love stories like this, because they prove that ingenuity, hard work and entrepreneurship – not privilege – can be the keys to success.

signature-carsSo what can we all learn from this story? I think it highlights several key aspects that are fundamental for a viable business – whether you’re trying to make your first million or just your next one.

First and foremost it demonstrates that identifying a need is vital. It seems obvious now, but the removal of paper tax discs was an inconvenience and worry to a large number of people. Meeting that need in an easy and affordable way proved to be very lucrative for the young millionaire, just as providing simple solutions to other everyday problems could be for you. Whatever your idea, regardless of how niche your intended audience, it’s crucial that you establish the presence of a viable market before investing more time and money into your business proposition.

Once you’ve established your market, it’s all about delivery. Part of the teenager’s success was due to low production costs, as he was able to use materials he already had at home to create a product that worked. Are there ways you can streamline your processes or otherwise cut costs to ensure you protect your cash-flow while you gain market share? I’m not advocating cutting corners or making low quality products, but wise investment and restraint are better than over-enthusiastic spending at the start.

Finally, it’s impossible to make your first million without self-belief. There will always be people who tell you your idea won’t work, or suggest ‘improvements’ based on nothing but their own opinion, and you need to stand firm and believe in your own abilities and business planning.

It may seem like simple advice but so often people ignore the basics and ruin a great idea by rushing into it. With prudence and courage we can all be on the way to making our next million, even if our teenage years are long behind us!