How to make $1 billion dollars in 5 years

There are ways to get there, but 5 years is a very steep target.

Let’s do some math - $1,000,000,000 is equal to a billion people giving you $1. That is, if you make $1 profit on whatever it is that you are selling, you will need 1 billion sales.

If your sales follow a standard adoption curve (excluding development time) you will need:

25 million sales in year 1
135 million in year 2
340 million in years 3 & 4
160 million in year 5
There are very few things in the world that will allow you to sell that many units. So this is definitely not viable.

But let’s change it up a bit. What if you could sell something and make $25 net profit per sale?

Then your sales will look like follows:

1 million sales in year 1
5.4 million in year 2
13.6 million in years 3 & 4
6.4 million in year 5
This looks a little better. But it is still not viable, because you will have to have either a product or service that 40 million people would want to buy over a five year period.

What we derive from this exercise is that you will not likely make $1bn in profits from selling services or products.

However, you can try to build a company worth enough to give you $1bn in cash when you exit. Here is how that may work in really simple terms:

You identify an industry that may interest you, like mining.
You identify people within that industry that can make financial decisions, like HR directors.
You build a list of names and contacts, preferably 50 or so.
You call them and set up meetings or Skype calls where you ask them what their top 10 problems are, and what they would be willing to pay for a solution.
Do some research to find out what it would take to solve each problem - it may involve new software, a service or a physical product.
Now find the most common problem, that will cost the least to solve and will generate the most profit. Ideally it should generate recurring income.
You take about $500 from your savings and register a limited liability company.
You sell 10% of the company to friends, fools and family for $10 000. Now you have a company worth $100 000, and you have $9 500 in the bank.
You use $5 000 to develop your solution.
Now you go back to your list of contacts and sell them your solution. Since you have a captured leads list, most of whom admitted to having the problem, you may sell to 50% of them.
Buy back the 10% from your early investors, giving them a 15% return. By doing this your company is worth $115 000. (Using some quick math your product should sell for around $1000 with a profit of $500).
Now, take some time to develop a proper business plan where you develop viable projections over the net 5 years. Be sure to include the fact that you already have paying clients.
If you can show good growth over the next 5 years, with profitability happening around Year 4, then you can approach other investors.
Sell 20% of your company for $1 000 000. Now your company is worth $5 million, and you have at least $1m in capital in the bank. Your personal net worth is $4 million.

All of this will take you about 18 months if you do nothing else, focus and network like crazy.
Use your capital to push sales and profits, gaining as much income as possible, but more importantly, market share.
With figures in hand, sell another 20% of your company for $10 000 000. Your company is now worth $200m. Your company will have at least $10m cash in the bank, and you will have a personal net worth of around $120m.
By now 3.5 years have passed. You have a few ulcers, you live on coffee and junk food and you don’t quite see the point of anything anymore. You are 24, going on 75.
You decide to exit completely - you pull your investors into a meeting, giving the last piece of the puzzle - if you can make some serious expansion to 35 countries (each with a sales team of 5 people and one manager), and you can get enough clients on the books, all the current investors can sell the company to a Chinese consortium that was aiming at the space anyway.
In a year you generate enough sales to create a 5 year projection that stipulates a DCF valuation putting your company value at $1.8bn
You drive the deal to happen at 4.5 years, giving yourself 6 months to sell your remaining 60% stake at a slight discount for $1bn.
Through leverage you could do it. It is unlikely and it will come at a physical and emotional cost far higher than the money you now have in the bank.

You cannot buy your health back and you missed the greatest years of your life chasing money.

Let’s get back to basics. How much money do you really need to live the life you want? Forget about “a billion dollars” and focus on the automated cash flows you need in order to live a comfortable and exciting life. Now follow steps 1 through 11 to help you generate that cash flow and ignore the rest!