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Professional services firms make up the majority of the small business universe in the U.S. Most never break seven figures or even make it onto the radar. They are typically dominated by a small, loyal clientele. The competition is determined to work 24/7 to get projects done, and if a client asks, they’ll sell the few minutes they get to breathe each week. They are so dependent on the owner’s time and talent that they are notoriously difficult to scale and monetize.
My partner and I ultimately grew our skilled services firm to almost eight figures when we finally realized that greater opportunities normally went to greater firms. We were good at selling and delivering for our clients. But because it was just the two of us playing all the roles in our business, we were stretched thin—and our clients knew it. They saw us juggling multiple jobs and corporations and got used to getting emails at all hours of the night when we finally had free time to reply their questions. They often gave additional consulting assignments to other firms because of our limited bandwidth. We lost hundreds of thousands of dollars in opportunities when we thought small.
We broke through the million dollar mark and kept going as we began pondering like a greater company. At first, we were talking about a greater game and took on debt to rent consultants and salespeople to make it occur. It was nerve-racking and we had some sleepless nights. But pretty quickly, we began seeing more opportunities in the pipeline, existing clients expanding their services with us, and competitive opportunities that we had never been considered before.
Here are three ironclad rules that have contributed to our success:
1. Start Selling Your Business, Stop Selling Yourself
If you’ll be able to’t charge tens of 1000’s per hour or clone yourself multiple times, you’ll never make that much money selling your skills. You need people—or at least the illusion of more people (until you discover people in the field)—to generate real revenue. Our approach? We understood what customers loved about us most and rewrote our sales materials to incorporate words like “our team” and “our approach.” Behind the scenes, we created a training guide and videos for recent hires to learn our “how” (and “why”) and then sell it.
2. Resist the temptation to save lots of on payroll costs by hiring less experienced consultants
Our success ultimately needed to do with our willingness to rent well ahead of schedule and build the team of experts our recent sales materials promised. The big rookie mistake we didn’t make was hiring part-timers or people with less experience than the company needed. Instead, we hired seasoned heavyweights who were bored with corporate America and looking for a recent challenge.
We couldn’t match their sky-high salaries, but we made up for it with flexibility and independence. In a few cases, we gave equity in exchange for quality of work, seniority, and sales. But we took most of the blows personally, staying on much lower salaries for almost two years. It was exertions, but it allowed us to rent several key individuals who were crucial to the company’s growth and helped us hire more superstars.
3. Don’t save on sales
We considered ourselves the best salespeople in our company. (*3*), we were also the lead recruiter, the editor-in-chief, the lead administrative assistant, and the bookkeeper. We simply didn’t have enough time in the day to sell. But if you’re not selling in a service company, you’re dead in the water. Our only other option was to take a position (a lot) in a sales function.
We hired someone to find and prepare deals, which gave us more time to focus on closing greater deals. We kept our salespeople compensated based on risk. We used a highly motivating, multi-level compensation plan and built in big bonuses for hitting big numbers. Our first salesperson doubled his earnings yr over yr when he finally hit the $2 million mark. We made money, he was a completely happy worker, and my partner and I forgot (almost) about giving up several months of salary to rent him.
It may now make more sense to take a position in a marketing platform like Hubspot, Salesforce, or the myriad of other recent competitors to do the heavy lifting. By the time we sold our company, almost 50% of our recent business for our $100K+ consulting contracts got here from these tools. Be sure to save lots of some money in your marketing platform consultant budgets. It took us a while to regulate our system and prevent nearly two-thirds of our emails from getting caught in spam filters.
In general, the larger your team is and the more it may operate without you, the higher your revenue and profitability. Devote your time and talents to increasing the value of your small business—without being tied to it—and you’ll be rewarded with sales milestones and a paycheck that greater than makes up for any sacrifices you make along the way.