The one percent rule (how to improve your business)

One percent at a time

Yesterday morning I saw Tyler Young’s post Marketing Your Small Business in 2 Hours a Day. It’s a great post, and you should go read it. Towards the beginning, he introduces an idea that has really stuck with me as a simple, yet powerful, framework for improving your business. That idea is Alan Weiss’ “One Percent Solution”. Simply put, if you improve your business by one percent each day, in 70 days you will have improved it by 100%. Granted, you could start picking that concept apart and arguing that it’s not possible/sustainable, but that would be missing the point entirely. The whole idea is to shift your thinking from “I need to make my business way better”, which for many people induces panic and fear, to “I just need to do one thing better today”, which is completely and totally achievable, each and every day.

Not sure where to start? Read on.

Charge more

This is true: you probably don’t charge enough money. Some of you reading this might charge enough, but chances are you don’t. To rectify that, go buy my friend Brennan’s Double Your Freelancing Rate and read it. It’s $49 and worth every penny, and if you use the promo code “TNORTH” you’ll get 20% off. I don’t get any affiliate commission on that, by the way – I just asked Brennan for a promo code to share with you. This book is great if you’re still charging a fairly low hourly rate for design, development, copywriting, consulting, etc. I’d classify anything under $50 per hour as “go buy this book and implement its advice tomorrow” low, but of course as with everything, it depends on the circumstances. However, do not use that as an excuse to convince yourself that your situation is a special case and you can’t justify charging more for the value you provide! Even if you’re charging more than that now, you can still probably benefit from the book. My partner Michael and I raised our rates from $75 per hour to $100-150 per hour (depending on the client and type of work) after implementing Brennan’s advice.

Charge for your value, not for your time

I just said we raised our rates to $100-150 per hour, right? Well, the truth is, we only charge by the hour for small, one off tasks. For our typical projects, we (try to) charge for the value we provide, not for the time we work. Why? The better we get at what we do, the faster we do it (for most things). If we charged an hourly rate, we’d be penalizing ourselves for getting faster! Sure, we’d have more time to churn through more projects, but we’d still be artificially limiting ourselves – there are only so many hours in a day. Instead, we try to charge our clients based on the value we provide to them. We’d rather work on fewer high-value (and high-dollar) projects and do work that is more interesting and more fulfilling than churn out a river of projects as fast as we can. That’s not to say there’s anything wrong with that model, it’s just not what we want to do. Of course, this means that we’re not interested in taking on every project. Some prospects just don’t emotionally or institutionally value what we do enough to pay what we would charge them.

Even though the title of Brennan’s book suggests it’s only for time-based pricing models, the content is actually extremely relevant if you want to learn how to charge for the value you provide. I’d also recommend Breaking the Time Barrier, by Mike McDerment (CEO of Freshbooks). It’s a very quick read, and free/name your own price to boot! One more book to check out is Value-Based Fees, by Alan Weiss. I can’t give that one my full endorsement yet, as I haven’t read the whole thing. However, at the very least there is some good advice in it.

Blog Write more

Nathan Barry is a far greater authority on this topic than I am, so I’ll let his post extoll the benefits of writing more:

Looking at my business revenue from the last 365 days, I decided to filter it down to just revenue I could trace back in some way to my writing habit (which is almost all of it): $249,602 (before expenses). That’s insane.

Most of that is from book sales, and the rest is from two small contract writing projects I did. Divide that number by 365,000 words and you get $0.68 per word written or $683 per day. That’s an incredible return on investment.

In 2012, Nathan started a habit of writing a thousand words for every day. Some days he wrote nothing, and other days he wrote more than a thousand words to make up for the nothing days. Sometimes he didn’t write, but made videos or recorded audio, which he counted at roughly one hour of work = one thousand words. The point is, he established a solid habit of creating nearly every single day. Sometimes it was blog posts, other times writing for various books he sold, etc. I’m obviously nowhere near that level (yet!), but I’m working on it. Michael and I are doing a challenge for the month of November to write 500 words every weekday, whether that’s on our personal sites, our business blog, or email newsletters and courses for our business. That doesn’t sound like much, but even a little bit adds up over time; by the end of the month we’ll have written over 20,000 words combined, and that’s just in one month.

Set up lifecycle/sales funnel emails

I mentioned above that we’re working on some email courses for our business. Well, I think you should be doing that too. The idea here is that when potential clients arrive on your site, you should offer them something of value right away. What if they’re not quite ready to contact you? Maybe they’re just thinking about redesigning their site, but don’t want to deal with a high-pressure sales process. Why not offer them some helpful information, in exchange for their email address? On our site, we offer “5 things you need to know before starting on a new website”. 5 Things to Know optin They enter their email address, and we send it off to them, and can then follow up after a few days to see what questions they have. This is a pretty basic example, since we only have one automated email that goes out. We also have another course focused on improvements they can make to their website right now. That one is five emails sent out over eleven days, with a follow up after a couple of weeks to see how implementation is going. That follow up is the perfect time to start making a sale, because if it’s been two weeks and they haven’t implemented any of the small suggestions we’ve made, chances are they won’t ever get around to it, and they know that. At that point, we can talk more about doing this (and more complex stuff, too) for them.

Resources for setting this up:

Teach

I wrote a post last week about the power of teaching as a way to win more (and better) business. Besides just writing more blog posts and email courses, you could also do in-person training/teaching. This isn’t something I’ve done yet, although it is something we’re planning on doing in the near future. However, Tyler Young has an excellent post on his experience with this on the Plancsope blog. I highly recommend reading that.

What are you going to do?

I’ve presented five different things you can do to improve your business, and of course there are countless others. However, the best way to start is to choose just one thing and make it your priority for tomorrow. What one thing are you going to improve in your business? Post a comment and share, and feel free to ask questions if you have any. I’d love to help you get 1% better.

The Power of Teaching

December 2015 update: I wrote a book on freelancing/consulting with my mastermind group. Learn more about that here.

If you’re a freelancer or consultant, you probably wouldn’t mind closing more deals with prospects, right? The more deals you can close, the more you can charge, the more selective you can be, the more enjoyable your work will be, the less you can choose to work…quite the domino effect. Want to know about the most powerful tool there is for closing more deals? It’s teaching.

I follow a guy named Patrick McKenzie online. Some of you may know him as patio11 (that’s his username on twitter, Hacker News, etc.). He’s extremely intelligent, and more than that, he’s extremely generous with advice and insight. You should probably go read everything on his blog. Wait! Finish this post, THEN go read his blog.

David vs. Goliath

One of my favorite stories that Patrick tells is about the time that he was dealing with a prospective consulting client. [Patrick, if you’re reading this and I’ve gotten some of the details wrong, please let me know! Hopefully I’ve conveyed the idea accurately] At the time, this would have been a fairly big client for Patrick. As he always does, he talked to the prospect, learned about their pain points, their business goals and needs, etc., and then told them how he thought their problems should be solved. As it turns out, Patrick was up against a major player in the industry: IBM. When his prospect talked to the folks from IBM, they told them how Patrick had proposed the problem be solved, and point-blank asked if IBM would solve it the same way. They said no, so the prospect promptly hired Patrick for the engagement. That’s the power of teaching.

Update: Patrick notes “the competing firm was not literally IBM, but that’s the right flavor.” Thanks for the correction, Patrick. 

Wait, what?

Ok, so why did the client hire Patrick based on that? So his process sounded better to them…so what? Don’t misunderstand: it isn’t the fact that they liked Patrick’s suggestions better than IBM’s (although they did). It’s that by taking the time to explain exactly what he was going to do, Patrick demonstrated expertise and earned their trust. They saw that he was highly knowledgable in his field (probably unlike the sales drones IBM sent out), and that he held strong opinions about how to achieve their goals.

I don’t have that kind of time

Now, you might protest that Patrick is at a whole different level – when he was still consulting, he charged five figures per week, so he could afford to spend a bunch of time meeting with and teaching prospects. You, on the other hand, might not quite be to the level of charging that much (I’m not either), so you have to do a little more volume to make up for it. Which of course makes it hard to justify spending a ton of time with someone until you’ve closed a deal. Hey, I get it! I hate wasting time with someone who’s only kicking the tires just as much as you do. So, what to do?

Scale it up

You understand the power of scaling something, right? If you’re reading this, you’re likely some kind of designer, developer, consultant, or general web-person, so you get the multiplicative power of doing something once and then cranking the dials to make it work at a higher level. Well, that’s what you need to do with teaching! Sure, you can’t justify sitting down for hours with every new prospect that comes your way. But why not sit down for an hour or two a week and write a few blog posts, explaining some part of what you do? That way, any time you get a new contact from a prospect, you can send them your standard response, questionnaire, etc., but now you can include links to a few blog posts that fit their situation and have some helpful information for them.

If he can do it, you can do it

Want a great example of scaling up the teaching? Take a look at Bill Erickson’s blog. He’s established himself as one of the leading WordPress developers using the Genesis theme framework, and his blog shows why: it’s loaded with development tips and tricks, lessons learned, and more. When prospects arrive at his site, within a few minutes they can see that he’s an expert, so they don’t have to worry about figuring out if he can handle the technical challenges that lie ahead.

Do you hear that?

It’s the sound of even more new prospects. The nice little side benefit of all that writing you’re doing? More traffic to your site, which means more prospects who, before they even contact you, have read some of your teaching-oriented writing and can see that you’re an expert in your field. The result? They show up ready to throw money at you.

What did I miss?

Does this resonate with you? Want to do more teaching but don’t know where to start? Post a comment below explaining your situation and I’ll do everything I can to help you get started. Anything you think I should have mentioned? Speak your mind!