This article was first written back in 2015 but is still incredibly relevant today (Except, instead of 5Xing our revenue, we have now 9Xed it!).
One of the largest impactors on our continued growth has been #5 on this list.
And, while it’s a painful one to implement, it’s quite necessary.
Here’s a look back at how 2015 changed everything and here’s to 5Xing your revenue this year.
From day 1, all of our services were on a month-to-month, no contract basis.
Customers would come and go every month without a care in the world (on their end.) On our end, it was a nightmare.
Cash flow was unpredictable and we spent ample amounts of time setting up campaigns, just for them to come to a screeching halt 30 days later.
To try and alleviate that issue, we began implementing 3-month minimum contracts.
After the 3 months was up, it became a month-to-month basis. That way, the massive setup time would be covered and we’d be guaranteed 3 months of revenue.
It worked like a charm.
Within 3 months, we doubled our revenue and life was good.
But by mid-year, we began to realize something: 3 months wasn’t a long enough span of time to see results with our services. It usually took 3-6 months.
Coming to that conclusion, we increased our minimum contract commitments to 6 months and continued to close the same amount of marketing and design contracts.
With the longer contracts, clients would see results before the 6 months ended and would continue working with us – skyrocketing our recurring revenue and creating a positive return on investment for the business owner.
Everybody likes to get a deal.
But when you price your services to undercut competition and win the business, you’re devaluing yourself.
On top of that, if you win the bid based on price, chances are, the customer is going to have insanely high expectations and will destroy your profit margin – quickly becoming your non-ideal customer.
That's why, at the end of the first quarter of 2014, I decided to hire a sales coach.
Within 15 minutes of our first call, she told me, “Josh, you’re undervaluing what Flight Media has to offer. Everywhere else, people are charging 2X what you’re offering for marketing and they suck at it."
Slapped in the face, I doubled our rates and guess what? We actually closed more business. (Shocking!)
In the last half of the year, we hired a creative director to begin offering web design, starting at $2,000/website.
After hearing that I charged $2,000 for custom web design, my coach scolded me again, saying, “Josh, people would pay $10,000 for the quality of these websites! Stop charging $2,000."
We upped our prices and in less than 2 months, we closed a $12,000 website project.
The moral of the story: Price based on value and you’ll win in the long-run. Whatever you currently value yourself at, stand firm in it. In fact, I encourage you to double it. Chances are, you’ll make more money.
If you’re a small business owner, chances are, you make 99% of the decisions.
While it’s easy to make on-the-fly calls, having a team of people to confide in, brainstorm with and delegate to is vital.
In 2014 I was reading, Traction, a phenomenal book by Gino Wickman, when I realized how much time I spent working IN my business, rather than working ON it.
In efforts to change that, I picked 3 of my key employees – who all ran departments – to form my first leadership team.
We began meeting every week for 90 minutes to discuss current company challenges and plan for the future. We created a 1-year, 3-year and 5-year company vision, as well as the steps necessary to achieve the goals we set for each year. (See a snapshot of our 'Visual Traction Organizer' below)
Immediately, our team began to experience internal momentum.
Delegating high-level projects and trusting in your leadership team will help remove many things from your plate, allowing you to focus on even higher-level matters and scale the business.
With many companies, you:
Rarely feel part of a team.
Are just a number.
Have no flexibility in schedule.
Can rarely advance.
Work in a non-growth-oriented environment.
If you’re currently working for a company, do any of those resonate? If you own a company, would any of your employees agree with one of the above statements?
It’s a tough question to ask yourself because most likely the answer is ‘yes.’
It’s easy to forget about culture.
We often get so focused on ensuring numbers are hit, that we forget to take a step back and think, “What does my company look like to the people who work for it?"
I’ve done it. About 1,402 times.
And what happens? People get burnt out, lose motivation, become less productive, talk about how they "can’t wait for 5pm,” and so forth.
If you want to experience explosive growth, it’s vital to have your people exploding on the inside. (A.K.A. Happy and loving what they do.)
Commit to your team, and you’ll harness an unbelievable momentum.
Below are a few ways you can create a phenomenal, kick-ass company culture:
Have one (or several) days per month that you work somewhere outside the office.
Show appreciation for every little good thing you see.
Send someone home early (with pay) who is having a rough day.
Take your team to lunch.
Set goals with every team member at the beginning of each year (and do everything you can to help them achieve them).
Go on an expense-paid company vacation (This is something that skyrocketed our moral).
Pick a few of the items I listed above and you’ll be well on your way to an improved company culture, that makes your company worth working for.
Right now, you probably have some customers that create ridiculous amounts of stress. Or customers who demand a lot, but are pretty far down on the food chain of priority.
We’ve all experienced them – Chihuahua Customers. They bark at your feet until you finally kick them to the curb or let someone else deal with them. (Ok, maybe not that harsh, but you get the point!)
Typical symptoms of “Chihuahua Customers” include:
Always haggling you on price.
Speaking condescendingly to you in front of your team.
Taking excessive advantage of your ‘call anytime’ policy.
Rarely paying on time.
Making you hate opening your inbox to an unread email from them.
Last year, we decided to minimize our “Chihuahua Customers.” Not only were they eating our profit margins, but the amount of stress our team endured was outrageous.
To help alleviate the issue, we began giving “strikes” for customers who regularly created issues, on an internal document.
Three strikes, and we would have “the talk.”
Most ended well, but a few ended sour – which was OK. Every time we “fired a client,” a huge weight fell from our shoulders, allowing us to refill the position with a new, better customer who valued what we did.
One of the largest obstacles entrepreneurs face is keeping clients on, for the sake of the check.
When it gets to the point where the customer is only your customer because of the check they write, then it’s time to reevaluate your goals and develop a solution to end the relationship as soon as possible.
These are the top 5 lessons we learned while increasing revenue nearly 500% in a single year.
And after evaluating the year in deep detail, these variables stuck out the most.
The good news is, they work. Take them, apply them to your business and I assure you, you’ll experience growth.
The bad news is, the only person responsible for achieving growth is you, the business owner.
And as a business owner, it’s very easy to get caught up working IN the business, that you forget to work ON it.
“But Josh, right now, it’s just me. I’ll do this stuff when I have more employees.”
Trust me, the more employees you have, the busier you will be and the harder it gets.
If you discipline yourself now, you’ll discipline yourself with 5, 10, or 50 people on your team – and they’ll follow in your footsteps.
“But this client is 20% of my revenue! I can’t fire them!”
If only I had 1% for every time I said that I’d have more than 20% back in my pocket.
I’ve learned that there is no financial gain worth any level of stress.
Without that burden, you’ll work harder, stress-free and will make up for the minor loss in no-time.
Throw the excuses out the window. Dedicate yourself time each week to work on improving one of these areas in your business and you’ll be well on your way to 5X the revenue you’re making now.
Which of these 5 lessons resonated the most with you? Why?