If you’ve ever started a business, you know the 2 questions that every entrepreneur has to ask: “What will it take to get started, and how soon until it’s profitable?”
Unlike selling physical products, or building software, client businesses can be started very quickly, and are profitable almost instantly. Let’s look at a few reasons why client work is the fastest way to financial independence.
There are a variety of ways to structure your consulting packages. For example: a one-time fee, a performance-based fee, or a recurring monthly or annual retainer fee.
Prior to this year, the majority of my revenue came from selling one-time services. It works fine to sell one-time services that create a specific outcome, but the challenging part of operating that way is you have to then continually be hunting down new clients to keep revenue flowing in each month.
This year, I really pushed monthly retainers with most clients so that each month, there was a predictable amount of revenue I could count on coming in. It really took a lot of pressure off so I could more fully focus on doing great work for my clients, and build on top of existing revenue each time a new client signed on.
You might have heard this before: “The riches are in the niches.” It’s a statement referring to a business principle that the more narrow and specific your target audience is, the more money you’ll make because you’re providing such a particular service for a particular type of business or person.
During the first couple of years, I consulted on a variety of marketing-related projects across different types of businesses. Sometimes in the beginning it’s necessary to take on a variety of work because people aren’t exactly knocking down your door, and bills need to be paid.
This year, I niched down to a specific type of work for a specific type of client: Ecommerce marketing for health and fitness brands. For the most part, I went even more niched down and offered only email marketing packages, sprinkled in with some SEO work that I contracted out and oversaw.
I do think there’s a point where niching down too far makes it more difficult to find clients. For example: Ecommerce email marketing for vegan pizza brands. My advice is to niche down, but make sure there’s a big enough pond to successfully fish in.
Niching down helped my business be able to get referrals more easily, and created expert positioning so that when I pitched our services, brands were more likely to identify with our target audience and feel like we could help them.
Most consultants are focused on serving current clients and finding new ones, but what’s often overlooked is the fact that sometimes the best way to serve current clients is to pitch them a higher-tiered service, or add on a new service to expand results in a new area of their business.
One client in particular of mine this year started off as a $1k one-off project the year before, and toward the end of this last year was up to a $5k per month retainer! Don’t forget that part of your role as a consultant is to consult.
It’s easy to get caught up in the week-to-week work, but stepping back and evaluating what else you can help your current clients with can result in better results for your clients, and more revenue for your business.
A lot of factors along the way helped my consulting business cross the 6-figure mark, but these 3 takeaways packed the biggest punches. And I definitely have to give credit to the team!