I wanted to write this post for the members who are running an offline agency, consulting business or services business and are looking to grow, or perhaps just starting out and looking for direction when getting it off the ground.
I've been involved in the consulting/agency world for a few years now and throughout the course of scaling my business to a very nice income I've had a TON of ups and downs. As I mentioned in the post title, I've scaled my business successfully to a pretty good place but looking back I made a ton of mistakes.
There are a few things in particular that really stand out. Things I wish I would have done sooner, things I wish I would have never done and some general mindset and wisdom that had I known would have gotten me much further, much faster.
I decided to put together the 7 key factors that you can implement in your business immediately to see much faster results and hopefully scale your business much faster than I did. I know for certain had I implemented these key points earlier I would have saved myself a ton of headaches and made a lot more money. Live and learn.
Like most of us when starting out I struggled hard. I couldn't get clients and the ones I could get didn't want to pay. I couldn't sell high end services (or so I thought) and I was forced to take on bottom of the barrel clients.
I wasted most of my time doing stuff that didn't work, convincing myself that a big breakthrough was coming. It did come, just not in the way I thought it would.
To paint the picture, I was selling one off projects with very poor positioning. I started out as a generalized web agency... maybe the toughest business to start because of how much competition there is. I really thought I would provide a great service and clients would come flooding in. I thought I just needed a handful of clients and everything would change. I thought I'd get endless referrals and the sales would take care of themselves.
Selling websites at a low rate is a race to the bottom, you'll not only make very little money, you're going to pull your hair out in frustration while doing it. The problem is, every month you're starting back at ZERO. Even if you love the idea of design and coding, small businesses typically want the same thing.
There isn't much room for creativity. My goal was to make a ton of money and I quickly realised selling websites for $500 a pop wasn't going to get me there.
I see a lot of advice on here about getting money this week, cold dialing for dollars and I wonder, how many people are here to simply get by vs. create a legitimate business and make very good money?
Understand this business can be an absolute nightmare, or it can be fun and very profitable. The difference between the 2 really isn't even that big. It's the subtle details that will make your business enjoyable and make you money vs. wanting to quit while struggling to pay your rent.
If you want to just get by, you can sell one off websites make a little money and essentially create a job for yourself. If you want to make legitimate money you need to have specific business skills and outline what it is your company does that's different from every other general consulting or services business out there.
Over time I've figured out these metrics for my business. I looked at what essentially makes the most profit with the least amount of headaches and what clients I want to work with. Over the course of a couple years I went from 0 to 25k per month (and we'll move beyond that much faster, by the end of January we'll probably do around 30k).
These are the 7 Things I would have done differently to reach that point in half the time.
1) Do Not Undervalue or Undersell Your Services
I look at low pricing as the ultimate race to the bottom. I'm not just talking about being the lowest priced in the market, but just having a low price in general. It's no secret that most businesses don't want to pay top dollar, this means you have to find client's that value your services and understand the return you can get for them.
I honestly view consultants selling services for a couple hundred a month as CRAZY. This may work now when starting out but it's extremely difficult to scale a business and keep good profit margins with pricing that low. I can get into business infrastructure and hiring in another post but I'll keep this one very simple.
Not only do you make little money but these clients are the worst to deal with and rarely work out well. If you're starting out and need money, this is fine but don't let it stick long term or you will be in trouble.
This begs the question, how much should I charge and what can I sell for that amount? We don't sell anything for below $1,000 a month and even that is on the low end. This includes basic online marketing services but we've positioned ourselves so strongly in our niche market (read point #2) that we've got a great shot at landing every proposal we put out.
The services we sell are no different than what everyone else is selling, it's our brand, marketing and positioning (and a very refined sales process) that allows us to charge more.
2) Do NOT Generalize, Find a Niche and Attack It Hard
Generalized web agencies may be the most competitive businesses to start. Especially if you don't bring any true value to the table. People think that telling business owners lines like "We know how to setup websites that bring in more customers" will make you stand out and justify 10k for a basic wordpress design. It won't. Maybe it worked in 2008, but those days are long gone.
You need to be extremely transparent in your marketing in 2016. Everything we do is focused around targeting our ideal clients within our market and from there positioning ourselves as strongly as possible to have a conversation, get out a proposal and land a new client.
Choosing a market isn't tough. If you're providing online services for example, find a market that needs your help. Look for markets that have a lot of search volume and become the authority in that marketplace. If you know there's a ton of searches for Kitchen Cabinets and you see cabinet companies using adwords, there's HUGE market potential for you right there. Is there 5 other marketing companies targeting this niche? Probably not. This is a prime example, now you just have to move all in with it.
This also means you're not limited to your town or city to sell services. 90% of our clients I've never met, many of them aren't even in the same country. Yes, I'm serious. Sales becomes much easier when you're marketing does most of the selling for you.
How can you position yourself in your market? Write books on marketing within your niche. Write for magazines and publications within your niche (this has brought us a ton of leads and we get paid to write the articles). Join an association and give talks to the group. Put out great informational content on a niche website and send it out to your ideal clients. I took a method Nathan (not sure if he still posts here) provides and tweaked it for our business, it turned out to be one of the best ROI activities we've ever done.
It takes time but you'll gain traction 5x faster than marketing yourself as another generalized web agency. You can even still run a generalized agency for any niche, you should always be open to accepting new opportunities in any market, but focus your marketing on what's going to bring the fastest results. This is our version of the 80/20 rule.
3) Find the Marketing Sources that Work, and Go All In
I've tried everything. I'm not joking. If there's a tactic I've tried it. I'll be honest, almost everything works. The question isn't whether something works or not. I know people who made sales standing in the pharmacy and striking up a conversation. Does the mean you should hang out at Walgreens all day?
The question you need to ask is what's going to bring me the best return on my investment and time. What are the 3 marketing activities I need to master to really have a business that systematically brings me new leads and clients every month
I was just interviewed on a couple podcasts about what marketing sources we use and I mentioned there's typically about 2 to 3 things per month that bring in 95% of our results. We've tweaked these methods over time and now I even give this information away for free. It's about thinking taking a method you know can be scaled (ex: Direct Mail, Email, Content Writing, Speaking gigs etc.) and focusing that attention on your target niche audience.
Finally, don't buy into "only focus on inbound marketing" B.S. I have a real problem with this. Yes, inbound is great but it's not the end all be all of marketing, outbound is still very much alive and well. I'm getting cold emails from sales people at hubspot and inbound.org every week - what does that tell you about only using "inbound marketing" to grow your business?
4) Know Your Business and Service Offerings - This is VITAL
I could write on this point for a while, it was a HUGE sticking point for me. In any services business there's a million directions you can go. For example if you're selling marketing services there's Web Design, Content marketing, social media, search management, CRO...
At the end of the day you have to offer services that fit your ideal business model, infrastructure and how you want the business to look.
I know what the profit margins of what most agencies look like. They aren't impressive. This stuff is rarely talked about because people only want to brag about big numbers like revenue. At the end of the day the only thing that matters is how much you put in your bank account.
In our business we do the same net profit (what I put in my bank account) as companies that have nearly 3x our revenue. You read that right. We're making the same amount as companies doing nearly 70k a month.. how is that possible? It comes down to the infrastructure of the business.
I know a woman who has a staff of 10, a fancy office and runs the biggest content marketing agency in our city. It looks great from the outside but she has a ton of people on payroll and managing those projects isn't easy. Her income isn't huge and she may even be fine with that.
I'll be the first to admit money isn't everything in business, if you enjoy what you're doing and making a good living it's hard to beat that. At the end of the day you have to ask yourself, what do you want? This is a topic I write a lot about because it's much more complicated than most make it out to be but probably more important than any other business topic.
Make sure you have a clearly defined direction you want to take your business.
5) Work with Ideal Clients
We talked about clients in our ideal market but there's also clients in that market that won't be a good fit.
Ideally you want to find clients that have money. For us we look for companies that are doing 1 million or more in sales and believe in marketing, ideally online marketing. Revenue isn't always the best indicator of how things are going, some owners are horrendous at managing cashflow but it's one of the main metrics we look at.
It can be difficult to find specific sales numbers on businesses so always try to look for assets. Do they have trucks? Do they have a large office? Large staff? Are they marketing or using your services in some way already? These are all great indicators of ideal clients.
We recently put together a list of the ideal markets to sell online services to and almost all of them had some type of residential service relationship. Remodelers, roofers, plumbers are always looking for their next sale and customer. Customers are looking for their services, this provides a great opportunity for you.
Major industrial/commercial products and services are almost always a losing situation. In fact, I've had a handful of people tell me to focus on markets such as heavy construction sales, industrial HVAC, mechanical equipment because it equals massive dollar amounts. Not only was it terrible advice, every single one of those people are now out of business.
Yes I followed up with them.
Be careful who you take advice from and make sure they've actually grown a legitimate business before hearing what they have to say.
6) Wake Up Every Day Hungry & Ready to Get It... The Importance of the Compound Effect
These last 2 points are going to be mindset related. People talk about mindset as wishy washy or woo-woo but for me it's been the biggest contributing factor to the growth of my business.
You should view your business as a fast paced marathon. You need to wake up every day ready to hustle and grind and most importantly do the individual tasks that will push your business forward.
I set daily tasks, weekly goals and monthly goals that I keep track of religiously. My goal is to hit these daily tasks and numbers by any means necessary. Hitting my marketing numbers is what will push my business forward. View your time as the most valuable asset you have and take advantage of it every second of the day. No one's ever got rich checking their email more often.
On top of this you have to understand the importance of the compound effect. In fact, I recommend reading the book by Darren Hardy, it's helped me a lot. Essentially, all of the marketing you're doing is building each week and month. You're building it up to a point where the results you get add up more and more and compound over time. If you're consistently hitting your numbers for months at a time you can't help but be successful.
Working in short bursts to "get money this week" is a race to the bottom... once again if you're in that situation then work through it and do what you need to do but your end goal is to look at business as a marathon and make sure you need to get things done every day long term.
7) Learn to Love the Process & Day to Day Tasks
I don't hear this talked about often but it will make you enjoy your business more and will definitely speed up the results you get. You have to learn to love the day to day tasks, even if they aren't fun. There's a lot of *stuff* in business that isn't fun. Your dream job and "following your passion" is going to require doing a lot of stuff that isn't fun. Just do it anyway and don't complain.
I've had to rewire my mindset and actions so I enjoy doing menial, boring tasks and in the end I actually end up enjoying them. I don't mind doing stuff most people hate like cold calling, packaging up marketing or talking with clients. It's not always ideal but you get much more satisfaction from the discipline of doing it, than you do from putting it off for something that's "fun".
In my business, sales don't really make me ecstatic. It sounds weird but it's the truth. I've taught myself to love the process and to only feel satisfied if I got the things done that needed to get finished that day. In turn you end up bringing in more sales because you're actually doing the things that push your business forward.
Whether we had 5 sales appointments fall through in a week or we brought on 3 high ticket clients this week; these situations don't affect my mood as much as you would think. The most important part of the business is the process. Good stuff is going to happen, bad stuff is DEFINITELY going to happen. The only thing that matters is that you keep grinding because at the end of the day the real results will come from the long term compound effect of you showing up every day and working relentlessly.
It's also important to note you shouldn't just push yourself through tough times but through great times as well. Some of the most difficult times to discipline yourself are when things are going extremely well, you start feeling like you deserve time off or that you can afford a break. Don't fall into this trap. Those of you who have built a successful business and made money will know exactly what I mean. I think we've all fallen victim to this one after a few good weeks or months.
That's it! A bit of a long read I know.. maybe someone can put the cliff notes version somewhere in this thread
These are the 7 elements that took me to over 25k a month in my business, and a very long time to learn. I'm sure not all of them will resonate with you but most of them should. I really feel like anyone can do it but as I mentioned before there's a very fine line between having a nightmare business where you make little money and having a business you enjoy working on everyday making great money.
Running a consulting and services business is one of the best ways to create a 6 figure business. It can be extremely profitable and rewarding but it really has to be done correctly.
I wish I had this advice when starting out, a lot of the information I got was terrible and really held me back. Put this stuff into practice immediately.
I really hope you guys got some value from this and if you have any questions feel free to post them below.