By Dorie Clark
July 24, 2019
One of the most appealing aspects of working for yourself is the ability — in theory — to earn unlimited income. You’re not held back by tiered corporate pay scales; if you can win new business and expand your client relationships successfully, you’re the one to reap the reward.
And yet many professionals find themselves frustrated because, even if they’ve managed to reach a healthy six-figure income, they can’t seem to break through their current income ceiling. Obviously, they need to do something different, but they’re unsure what — and advice to “stop playing small” isn’t helpful.
In a decade of building my own seven-figure business and coaching several hundred other self-employed professionals ranging from financial planners to leadership consultants to horticultural experts, I’ve seen people frequently hit the following four stages of income plateaus. Here’s my best advice for how to break out of each one in order to reach $1 million per year in revenue.
Scaling to Six Figures: Reaching $100k
The first job for any nascent entrepreneur is to find product-market fit — i.e., validating that clients want to pay for what you’re offering. Reach out to friends and friends-of-friends to find a few clients to help for free, so you can work out the kinks, determine if you actually like what you’re doing, and — if the engagement goes well — land early testimonials and referrals for paid work.
You should also reach out to your own network and let them know about your new venture. Even if they know you in another context, the trust they have in you often transfers if you have client results you can talk about (which you now do). These steps will enable your business to reach its first $100,000 in revenue.
The Service Treadmill: The $300k Plateau
Once you’ve identified the product or service that works — often after many tries — it’s natural to double down. (“If people like my consulting on X subject, I’ll get as many clients for that as I possibly can!”)
That’s a logical and necessary strategy and, with the right offering, can take you to $250,000-$300,000 in annual revenue. But when you’re providing 1-1 service, you eventually run out of time. (As the saying goes, you’re “trading time for dollars.”) You’re too busy delivering to recruit new clients — and even if you could, you’d barely have time to service them.
To move beyond the $300,000 range, you need to figure out how to create more leverage in your business so you’re not doing everything on your own. Many entrepreneurs caught in the “let’s keep doing what works” mentality never break out of this treadmill. But those who do often reach the next plateau: becoming “Semi-Scaled.”
The Semi-Scaled: The $600-$800k Plateau
Professionals who reach $600,000-$800,000 in income are obviously doing something right. They understand they can’t do all the marketing and delivery themselves and have probably taken on employees or contractors to assist them, whether it’s virtual assistants or subcontractors who help them work with clients.
Initially, those relationships can be informal and scattershot, but over time, they realize they need systematization, because it gets annoying to explain the same thing to the second, third, and fourth employee — and they want to standardize the quality of your delivery.
So they’ve probably created handbooks and manuals to guide operations. They’re still quite busy, but their time is now spent in a mix of client work, marketing, and overseeing their phalanx of contractors. In theory, since they’re relying on the efforts of other people, their business is now in a position to scale indefinitely and keep growing. And it does — yet it’s incremental, not exponential. Why isn’t it growing faster?
The “Semi-Scaled” are usually lacking brand awareness in the broader marketplace. These entrepreneurs have typically over-indexed on “sales” — i.e., asking for and winning client business in the short term – and under-indexed on “marketing,” which I define as long-term efforts to attract the interest of your target market.
In other words, they’ve scaled their day-to-day business operations, but not their marketing pipeline. They still get most of their business from referrals, or networking, or 1-1 coffees with prospects, rather than raising their profile sufficiently so those same people are actively seeking them out.
The intimidating challenge the Semi-Scaled face is to share their ideas more broadly, so their ideal target audience will learn who they are and independently realize they’re a great fit to work together.
The return on this marketing push is uncertain and may take years, which makes it less appealing than the instant gratification of booking a prospective client the day after your intro call. But a deep focus on becoming a Recognized Expert in your field is the only way to break through the final income ceiling on the way to seven figures.
Leveraging Your Assets: Getting to $1 Million and Beyond
There’s not enough time in the day to actively recruit enough 1-1 clients to earn you $1 million per year. The process of seeking out referrals and introductions, conducting get-to-know-you calls, building trust, answering concerns, and finally closing the sale can take weeks or months. Even armed with a fleet of employees, the task becomes impossible.
That’s why you have to speed up the process by ensuring that prospective clients seek you out, rather than the other way around. You want them to come to you already knowing what services you offer and trusting that you can deliver great work for them. In other words, they’re 80-90% sold before you initially connect.
Obviously, strong referrals from trusted sources can accomplish this. But that’s almost never scalable, since most referrals happen 1-1. To achieve true leverage, you need to cultivate a widely recognized expert reputation and a platform where you can reach vast numbers of potential clients efficiently.
Self-employed professionals who are in the “Semi-Scaled” stage (or even on “The Service Treadmill”) can lay the groundwork for reaching $1 million per year in revenue by taking the following key steps.
Start building an opt-in email list.
Too many professionals delay this step, but a robust email newsletter can quickly become your most valuable asset. Social media platforms are helpful, but they constantly rejigger their algorithms, making it impossible to count on them over time as a communication channel.
A newsletter enables you to send relevant messages to your audience — and as your list grows, the scale enables you to monetize your ideas quickly (for instance, with only one email blast, I recently sold 11 spots in a premium workshop in less than 24 hours).
Share your ideas widely
Everyone would like to be known for their great ideas. But if you don’t share them outside of your 1-1 client relationships, no one will know you have them. Even though it takes time away from revenue-generating client work, it’s essential to carve out time for content creation activities like speaking, writing, blogging, podcasting, etc. This is how you can become known more widely and change the power balance with prospective clients. You’re no longer asking to be hired; instead, they’re entreating you to take them on, because they already understand the caliber of what you can deliver.
Shift your business model
Many professionals are intrigued by the idea of creating online courses — after all, they’re infinitely scalable and, when done right, can be quite lucrative. But if you don’t already have an audience who might buy your course, it’s a bit of “build it and they will come” wishful thinking.
However, if you’ve been diligent about building your platform, then exploring leveraged business models like online courses and online membership sites can be a fantastic idea. You now have the ability to reach a large group of interested people with the insights you’ve worked so hard to develop.
Most self-employed professionals would like to reach the million-dollar mark, but there are unique challenges at each business stage along the way. By understanding where you are in the process, and which issues you need to plan for and mitigate, you can create a much smoother pathway to the lucrative business you envision for yourself.
Dorie Clark is a keynote speaker who also teaches at Duke University’s Fuqua School of Business. She is the author of Entrepreneurial You , Reinventing You , and Stand Out , which was named the #1 Leadership Book of 2015 by Inc. magazine. A former presidential campaign spokeswoman, the New York Times described her as an “expert at self-reinvention and helping others make changes in their lives.”
This article was written by Dorie Clark from MONEY and was legally licensed by AdvisorStream through the NewsCred publisher network.
This article is from Money Magazine and was legally licensed by AdvisorStream through the NewsCred publisher network.