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You Need 150,000 Customers

By: Steve Johnson

5/15/2008 - 52 Comments

If you were to start and build a business to support your family, you will need about 150,000 customers throughout your lifetime.

According to Robert Allen (billionaire and author of ‘Multiple Streams of Income’), each customer is worth $1000 through your lifetime. Assuming this is true, how many customers does it take to support a family business?

If an average family in America can live on about $50,000 per year. Then, is takes about $50K x 30 years = $1.5 million to support that family. If each customer is worth $1000, then your business needs to attract 150,000 customers throughout your working years.

Of course a business very rarely can be run with a single person. Therefore, a business with several employees, with an average pay of $50,000, needs to bring in $75,000 for each employee because the additional $25,000 is needed for taxes and benefits. A business with 10 employees should bring in about $750,000 annually and attract 1.5 million customers over a 30-year period. A business with 1000 employees should bring in about $75 million, annually, and attract 150 million customers over a 30-year period.

These are interesting numbers to look at if you plan to start a business or are working for a new business. But, don't let the 150,000 customers scare you. Most of these customers are found after the first 7 years of operation. When the business reputation has grown and the employees and products have settled into a market that produces a profitable margin.

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Multiple Streams of Income

Robert Allen captivates the three primary income sources and explains how you can get involved in them. This is a great book to help you find new ideas and opportunities. The primary idea Robert focuses on is finding residual income - future income off past efforts. The book is full of ideas.

Will and Vision: How Latecomers Grow to Dominate Markets

This book is aimed to debunk the First Movers Advantage, which is the idea that the first company to create a product in a new market has historically become the industry leader. If you're starting a new business, this book will inspire you to move ahead with your plans even if you are not the first one to the market.

Crossing the Chasm

This book is primary about moving from high tech products from early market success to mainstream market leadership. But, this book explains many of the concepts of moving a business from the starting gate into the marketplace. If you are trying to start a new business, this book will be very useful. This book talks about, attacking a niche market, creating competition, start locally – then globally, building relationships and many others aspects of getting started.

Seeing What's Next: Using Theories of Innovation to Predict Industry Change

This book will help to understand what new innovations with survive and which will fade away. If your investing or starting a new business, this book is a must read. Clayton argues that disruptive innovations typically introduce new benefits to a market, usually centered on convenience, simplicity, customization, or affordability.