The $2-3m “sweet spot” you’d be wise to heed

You know what gets my goat?


People who torch their perfectly good businesses trying to “10x” them.

Last week, I had coffee in London with a friend who runs a $2 million online education business. It’s a beautiful operation. He works about 10-15 hours a week. Takes home nearly a million in profit.

And he’s miserable and anxious.

Why?

Because at a mastermind recently, everyone convinced him he needs to hit $10 million or he’s “playing small.”

So now he’s burning through cash, hiring like mad, and working 70-hour weeks trying to scale. His profit margins have gone from 50% to barely breaking even.

(Did I mention he’s stressed?)

Now…

That’s all well and good if your life’s mission is to become a billionaire and nothing else matters.

But this guy isn’t.

He already has plenty of money, rather enjoys life and really doesn’t need the grief.

But if you don’t keep your ego in check, this is exactly how you can ruin a perfectly wonderful life.

Here’s the thing about our industry — online education businesses:

There’s a “goldilocks zone”.

Once you understand it, you’ll stop chasing vanity metrics and start building something that actually serves your life.

Let me break down what I’ve seen after building multiple million-dollar companies and advising dozens of others.

(Btw, you can watch the video version here if you prefer.)

The $0-1M Range: The Grind

When you start out, it’s brilliant.

You’re making content, selling products, keeping most of the money.

Maybe you’ve got a VA helping out. Life’s good.

But then ambition kicks in. You start hiring. Building systems. Investing in growth.

Before you know it, you’re doing a million in revenue but only keeping 20-30% of it. After your living expenses, you’re lucky to have $50k left in the business account.

Not exactly the freedom you signed up for, is it?

A regular job sounds more appealing… and a lot less stressful.

You tell people you “have a 7-figure business” and they’re impressed! Inside you feel like a shrivelled up prune.

The $2-3M Range: The Sweet Spot

Something magical happens around $2 million…

Your business hits its stride.

You’ve figured out what works and you’re doubling down on it.

Your team’s humming along nicely.

Revenue grows, while costs stay the same, creating this beautiful profit wedge inside your business.

Suddenly, you’re looking at profit margins of 30-40%.

On $2-3 million revenue, that’s north of a million dollars in profit.

Take out $200k for living expenses (which is plenty for most families), and you’ve got $800k sitting in the bank at year’s end.

That’s real money.

That’s freedom money.

That’s “I can invest in whatever I want without sweating” money.

Best of all, your team is mature enough for the business to function largely without you… so you have your life back too!

The $3-10M Range: The Danger Zone

Here’s where it gets dicey.

You’re sitting at $3 million, and you upgrade your peer group. You’re hanging out with the big boys now, meeting exited entrepreneurs who somehow managed to build a “real business” and sell for $50m.

(Although ask them how much they kept after paying off investors, biz partners and tax… it might not seem so sweet after all.)

The voice in your ear says “Why stop at $3? You could be doing $10 million!”

(This is what happened to my friend.)

So you go for it.

You hire aggressively. Invest in paid acquisition. Build out data infrastructure. Bring in expensive consultants.

Your expenses explode.

You’re burning cash faster than a Premier League footballer in Vegas.

Best case scenario?

After 3-5 years of hell, you might hit $10 million with 10-20% margins.

That’s $1-2 million in profit – not much more than you had at $3 million, but with 10x the headaches.

And yes, you now have a sellable business, or the ability to continue scaling.

But there’s a worst case too…

One that’s statistically almost certain to happen to you…

You flame out somewhere along the way, like a snowman in a sauna.

There’s a high chance that you look back and your “nice ‘n simple” $3m business with a healthy dose of nostalgia at this point.

The Real Question

Here’s what you need to ask yourself:

What are you actually optimising for?

If it’s pure wealth, then yes, a $10 million business might sell for $30-50 million to private equity.

That’ll put a dent in your retirement fund.

But if it’s lifestyle, freedom, and actually enjoying your life while building wealth? That $1-3 million sweet spot is bloody perfect.

You work reasonable hours…

Your team handles most of the heavy lifting…

You’ve got plenty of cash to invest, travel, or pursue other interests.

You’re not lying awake at 3am worrying about making payroll…

Oh, and unlike selling, you still own the asset.

(Cash flow, anyone?)

When I look back on my journey with StoryLearning, the most stressful times weren’t when we were small. They were when we were trying to force growth beyond our natural ceiling.

The entrepreneurs I know who are genuinely happy?

They’re not the ones with the biggest revenues.

They’re certainly not the exited founders.

They’re the ones who found their sweet spot and had the wisdom to stay there.

So before you chase that next million, ask yourself:

Is this serving my business, or is it serving my ego?

Because I can tell you from experience – there’s nothing small about a business that gives you a brilliant life.

Namaste,

Olly

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