The beginning of the year provides a great reflection point to take stock of where you are, where you want to be, and how you’re going to get there. Your freelance business may be humming along at a steady pace, but just how big can it grow?
The key to scaling your business is to think like an entrepreneur and not just a freelancer, writer, designer, consultant, accountant or whatever your business happens to be. But first, you must recognize that two things may bind your business’ growth:
Your available time
• There are a fixed number of hours in the day and week. When you charge by the hour, there’s only so much you can grow. Sooner or later, you’ll run out of hours
Your hourly rate
• Many of you can charge your clients more than you charge now, but you can only raise your rates so high before you price yourself out of the market
Once you’ve acknowledged these two growth inhibitors, you’re ready to move on. Simply follow these next five strategies and you’ll be scaling your business outwards in no time.
1. Stop working alone
One obvious course of action is to bring on help to increase the scale of your operation. You can either hire a full-time employee or subcontractors. Working with contractors gives you more flexibility and helps you spend less time conducting legal administration. This approach also lets you divide your work among specialists.
It takes time to find a rock star, so don’t wait until you take on a new client or huge project to start the hiring process. Get the ball rolling now by asking your network for referrals.
2. Cull your client list
When you are just getting started, you’re probably eager to work on any project or client that comes your way. However, not every client is a good one and there comes a time when it’s in your best interest to weed out the clients that are holding you back.
For example, maybe there’s a client that quibbles with you over pricing on every project; is always late to pay; doesn’t listen to your expertise; or shows a general lack of respect. Low quality clients lead to low quality projects and referrals. You can’t grow your business with clients who don’t see your value or aren’t willing to invest in themselves.
3. Change your billing model
If you haven’t already read it, I highly suggest downloading FreshBooks eBook, Breaking the Time Barrier.
It will get you thinking about the difference between churning out billable hours and delivering value to clients. It will also teach you how to adopt a value-based approach to pricing your services.
You don’t have to change your business overnight. For example, make a goal to pitch a value-based pricing package to one new client and see how they respond.
4. Productize aspects of your business
This is a hot topic among designers and other service providers, these days. The goal is to create a solution (the “product”) that can be resold and adapted to meet the needs of multiple customers. When you don’t have to create something new every time, you can make far more money without having to do any extra work (or just a minimum of work). Productizing or commoditizing your services frees you from the direct relationship between your time and income.
For example, a web designer can also sell design templates or create a course that teaches people how to do some design themselves. You may not immediately see how this approach can apply to your business, but spend time thinking about which aspects of your service are most like a product and go from there.
5. Upsell and cross-sell
According to Marketing Metrics, you have a 60-70% chance of selling to an existing customer and just a 5-20% chance of selling to a new prospect. This means it’s time to start thinking about how you can deliver more value to your current client roster. Are there opportunities to offer additional services to any of your clients? What about adding annual maintenance subscriptions?
Don’t forget that as you scale your business, you’ll also need to keep up with your legal and administrative requirements. Particularly, as you add employees or contractors, you’ll want to convert your business from a sole proprietorship to an LLC or corporation.
Start thinking like an entrepreneur this year, and get ready to grow your business without putting in more hours!
About the author: Nellie Akalp is the CEO of CorpNet.com, an online incorporation filing service, where she helps entrepreneurs incorporate, form an LLC or file a DBA for their businesses. Connect with Nellie on Google+.