If you're a digital marketing or creative freelancer and want to grow and have a business that can run without you, you're going to have to make some changes.
Growing beyond freelance work is more than just getting another client, and then another...and another.
In this video, I want to break down tips or shifts you need to make as a freelancer to begin the transformation into a business owner.
Whether you're growing an agency consultancy, an online training business, or a combo of the above (we call this the hybrid agency), this video is for you.
Transcript / MP3
If you want to move from a freelancer to a business owner, then you're going to need to make some changes. So in this video, if you stick around until the end, I'm going to share eight steps that you can start to put into place right now to begin this transformation from freelancer into a business owner,
Let's get it going ...
In my journey. I think like many of us as a freelancer, I don't even know that I classified myself as a freelancer. I had a skilled and I went and got work and then I got one client and I get another client. And then I get another client. And for a long time, there's just a way in which you look at yourself, there's a way in which you show up in the world to your actual clients, to the marketplace at home. That really just kind of puts you in this freelancer bucket. But here's the thing. I was the bottleneck in the business and all of the things I'm going to share with you today, if you're doing the opposite or not doing any of them at all, you're going to start to feel the strain. And you're going to feel like all the pressure is on your shoulders and that the business is you. Let's talk about what you can actually do and start putting in place as of today to shift the mindset from being a freelancer, to actually running a successful and profitable business that can run without you.
If you're liking the content that you've seen, then go ahead and show us some love by clicking that subscribe button. So tip number one, to move from freelancer into a business owner. And this is going to sound super obvious, but you need to start seeing yourself as a business owner. If all you ever do is say, I'm a freelancer. The way you show up is going to actually be different. But if you start looking at this as bigger than yourself as not just you, even if it is you in the beginning, your mind is going to start to shift to one of a business owner. It's not about me. It's about the business. It's about the brand that we are creating here. The first thing starts up here. I always tell our sales team that before you can sell someone else, you have to sell yourself.
You got to make money in your mind before you can make money in your business. And the same kind of mindset shift applies here. When it comes to becoming a business owner is you have to start to look at yourself as a business owner and treat yourself as a business owner. So now that we've got the simple one out of the way, let's jump into step number two, which is to move beyond labor. If you read million dollar consulting by Alan Weiss, he talks about the evolution of you as a service provider. At some point needs to move beyond just being labor. Also in E-Myth revisited, Michael Gerber talks about how, while you're a technician in your business and your business does technical things. That doesn't mean that you need to be the one doing the technical work. And so that really starts to require you as the owner to start requiring business skills, not just the skills that come along with your craft.
So say you're a web designer. You growing your business to the next level is actually going to be more reliant on you. Acquiring business skills, marketing yourself, sales, positioning packaging. Then the skills that come along with just being a better web designer. So when I say move beyond labor, I mean, it moved beyond just mastering craft and start to acquire business skills that will have you operate like an owner of a business and a CEO. And one of the things that I've found for our clients that really starts to help make this shift is to start looking at your processes for solving your client's problems and starting to package them up into a methodology, into a process. All of our clients move through the exact same creative and delivery process to get their clients to the result. And by having that repeatable process, that fulfillment and value creation engine for their clients, they can start to map out where all of the little bottlenecks and pockets of opportunity exists inside of their business.
It might be packaging up certain things that they're doing as sellable assets, selling your byproducts or packaging up your service into a two day workshop or a training where you show clients how to move through a particular exercise or thing that you do. So it's gotta be the shift from not just selling your time for money, but moving beyond the labor to sell, not only just deliverables, but an outcome and a transformation. Now, tip number three is really getting in the habit of paying yourself first. And what I really mean by that coming out of the freelancer mindset into the owner mindset. A lot of people, myself included early on would treat my business bank account, like my regular personal checking account. So if you haven't set up an LLC or an escort, you may want to look into doing that. That's not legal advice, but by doing that, you're going to actually set it up where your business income is separate.
And then you will eventually start to pay yourself a salary or distributions to yourself, which goes into your personal checking account. Now, one of the big mistakes that I see a lot of freelancers make and early on business owners, agency owners, consultants is they basically make money. They farm out anything that they can, and whatever's leftover is the money that they keep. Oftentimes if you don't pay yourself first, you don't really have enough money to go offload things. And so while it might feel like you've hired another contractor to help you in fulfillment, if you're not paying yourself first, you've kind of shortened your own runway on how long this business can last. And they say 50% of new small businesses fail within the first year. And a lot of times that's because of cashflow. So if you don't have enough cash coming in, you can't pay your own bills.
How the heck are you supposed to be able to serve clients? So make sure that you're paying yourself first and have a business bank account and pay yourself a salary as the main employee, the owner of your business. All right, tip number four is to set and define a minimum level of engagement. We've talked about this before on this channel, but far too often, do I hear of freelancers and early stage agency owners, consultants that take on the wrong clients and will redline out certain items from the proposal to meet the client's requested price, but yet really still ended up delivering the service that they had quoted at a higher price point. The reality is you have to do the math. In most cases. What I've found is if the lifetime value of a client is less than 10 grand, ideally 25 grand, depending upon the type of work you're doing creative, digital marketing work, you're likely not going to be that profitable.
Now, if it's, you know, one client pays 5k and then in the next 12 months they pay another 10 K we're starting to look like we're in a better situation, or if they pay 10 K and then they go into some sort of retainer or recurring model, that could be okay too. But on average, if you're making $2,000 per client and they're leaving after 60 days or 90 days or four months, which is actually the average for most subscription based businesses, retainers for some of the agency owners, you're actually not even that profitable because most of the work you're doing upfront, you're losing money from how heavy that lifting is. If you're only charging two K. So the goal here is to have a minimum level of engagement. If someone says, Hey, I would love to work with you, but I can only afford 5k.
And your minimum level is 7,500. Then you need to honor that commitment and say, Hey, look, I'd be happy to discuss what we can do for 7,500, but that's kind of our starting rate. What that's going to also do is help you Uplevel the type of clients that you work with and your profitability, because the more profit you make, the better service you can actually provide. If you're just scraping by, by what your clients are paying you and you keep on adding more clients, you're going to end up in a situation where you are burned out, have no capacity, and you have little to show for it. So we really don't want to do that. We want to have some sort of minimum level of engagement where we can say, Hey, look, this is where we start. Sorry, you can't meet that. That means, you know, I'm going to point you in the best direction that I can, and I'm going to go find the next right client.
All right, tip number five is to start publishing. One of the key things that I think is really important for you and your agency and your business as you're growing and moving from freelancer to a business owner is to actually start to develop some authority. And it's going to be tough to develop a position or a point of view without publishing and sharing what you're thinking, what you're learning, what you believe to be true for your ideal client, how you solve problems, helping your ideal market, identify that they even have this problem. Whether that's LinkedIn posts or doing YouTube videos like this or a podcast you need to get into the habit of publishing your point of view, that's going to showcase your know-how and that will attract people to you when done correctly. Now that moves me into tip number six, tip number six is positioning and developing that authority, which is going to come from the consistent publishing.
I think some people hold off on publishing content, creating content because they feel like they don't have authority, but you actually have to get in the habit of publishing and sharing your viewpoint in order to develop that authority, to help refine that positioning. Oftentimes my clients ask me, don't you get tired of saying the same thing over and over again. And the reality is no, because one, sometimes I'll say it one way and another times I'll say it a different way. And that different way actually allowed me to connect with someone in my ideal target market in a way that finally makes sense to them. And also by continuing to talk about our methodology and our beliefs about how agencies should be ran and know the future of agency and things like that. I actually get to refine my message. I get clear. I come up with new ideas and I get to innovate on my own property.
And that helps advance my own methodology and allows me to continue to rise up in the marketplace that I'm trying to market myself in. So you can't have the authority without publishing because people need to know who you are. So you have to start publishing and by publishing, sharing your content, what you're learning, you will develop and become an authority in your market. Now, if you're enjoying this content, what I'd love for you to do is join us over in our free Facebook firstname.lastname@example.org forward slash group. And every Wednesday, we hold a free training called whiteboard Wednesday, and we help agency owners, freelancers service providers, solopreneurs really start to develop the awareness, the skillset and give them the expertise to make this transformation and building more profitable, predictable business that gives them the impact and the income that they so desire really without having to work nights and or weekends.
So join us email@example.com forward slash group. Now tip number seven is to raise your prices every five clients. Yep. That's right. So when you get started, like I said earlier, you're probably taking some deals that are a little bit too low you're in this process of setting your minimum level of engagement, every five clients, you should look to raise your price a little bit, at least in the beginning. Now this doesn't last forever, but if there continues to be demand and you're getting more clients, you raising your prices and making more per client is in your best interest. So a rule of thumb is every time you get five new clients bump the price up a little bit. It'll also give you the opportunity to go back to people that were in your pipeline and say, Hey, by this date, we're going to be increasing our rates.
So if you want to get in before that, you can come in now or moving forward, it's going to be my new rate piggybacking off of raising your rates. Every five clients tip number eight is to upgrade your clients at least every six months. So I learned this the hard way as you're out there publishing, and you're sharing your position, your beliefs, your authority in the market, you are going to get better at it. Just like if you've never done pushups before you start doing one a day, and next thing you know, you're doing 10 a day and they seem to join 50 a day. Well, as you get better, your going to start to attract more of the right people. So if you get five clients and then you up your price, the next five clients that are a new price point, and you're probably starting to develop kind of a gauge on who is the best type of client for you, especially as you see which of those clients are getting the best results.
Maybe there's certain characteristics about them that you overlooked earlier on. So every six months revisit who is my ideal client and make sure that the marketing and the messaging, the publishing and the content creation that I'm putting into the marketplace matches with that upgraded avatar with that upgraded ideal client, because if you are subconsciously or in the sales process, taking higher quality clients, but your messaging doesn't evolve with your client selection evolution, then you're going to continue to attract the lower quality leads. And you're going to find that people aren't qualified. So every six months, we're going to upgrade our messaging to our ideal client, because we've likely upgraded who we are selecting as clients. In addition to every five clients we're raising our price. So I hope you found that well can see kind of a recap in the description below. And again, if you haven't joined us in our free Facebook group, check out all agency.com/group. And I want you to comment below what is the first one of these eight tips that you're going to start to implement, to make the move to become more than just a freelancer. I hope you enjoyed this video, seeing the comment section below [inaudible].