My website development company turned 9 years old this month. To celebrate, I am sharing 6 of the most important lessons that I have learned.
Like many people starting out on their own, I knew nothing about actually selling my services. I was eager to take on any project, at almost any price.
Soon I had a lot of clients. But I was also working 12 hours a day and making only so-so money. That quickly made me start asking "what's the point?"
I hadn't started my own web development business just to work all the time while scraping by financially. I'd done it for the same reasons many others go out on their own: to live a higher quality lifestyle. One that is abundant in time AND money, earned from doing work that we love.
I knew in my heart of hearts that this was possible, even if I wasn’t there yet, and even if I didn’t quite know how to get there.
So I pressed on trying new approaches to make it work. A couple of those approaches turned out to be big mistakes. But I did learn, and today my business is the KEY to living a lifestyle that I love.
In fact two years ago I took a 2 month vacation to Poland, during which I proposed to my girlfriend. That’s when I knew I had something special.
In celebration of being at this for 9 years, and wanting my readers to live their own abundant life, I want to share six of the most important lessons that I have learned the hard way.
LESSON #1: Seek High Value Clients
High value clients are the secret key to building the consulting business that you want. Winning them means securing longer-term work, getting paid your true rate, and building the kind of portfolio that attracts quality projects.
But what is considered a high value client?
Their project fits the narrow scope of work that you do exceptionally well.
This means that the project is the type of work that you are actually looking for, and ideally want to do more of.
They want to hire you for a longer project, or are likely to keep requiring your services.
If you put in the time to make the sale, and you do win it, you want that relationship to generate on-going income for your business.
The client is willing and able to pay your normal rates.
It may sound weird at first, but a client who pays your normal rate will almost always value your work higher than a client who receives a discount. This actually makes a lot of sense - if you devalue your work by discounting it, why should the client value it?
When I look at the growth of my own business, ALL the actual growth came from clients that fit the above criteria. Other projects brought money in temporarily but only served to put food on the table for another day.
These days I actually turn down any business that is not likely to fit into the above criteria, because I know that in the long-run that time is better spent finding more of my ideal clients.
"But Matt, how do I find these amazing clients that are supposed to grow my business?"
I knew you'd ask. As it happens I wrote a free PDF guide on this very topic. If this is your sticky point you can grab it below:
LESSON #2: Never Take on Low Value Clients. Ever.
While high value clients are the foundation for growing your business, low value clients are actually holding your business back.
This sounds obvious, but spotting a low value client is not always as easy as it sounds. Most of are not “bad people” and they haven't done anything wrong.
It's just that taking them on will generate very little money relative to the amount of precious time that managing them takes up.
Most of the freelancers that I’ve met who complain about being too busy could instantly free up 20-50% of their schedule just by eliminating low value clients.
What would that extra time mean for you?
Earn your time back by turning down or letting go of clients who:
Are clearly focused on finding a low price.
This includes anyone who states price as a top priority, requires a discount to work with you, or finds a way to constantly bring up how expensive your services are. This doesn't apply if price is your big selling point, but then the advice in this blog isn't for you.
Require work too far outside the scope of your services.
Don’t be afraid to push your core capabilities to the next level, but jumping on every chance to try a new skill or technology makes it very difficult to truly excel at anything.
Make unfair demands on your time.
This can be hard to spot ahead of time, but when it happens the problem must be addressed openly and honestly with the client. Solve it, or part ways politely.
The project is simply too small.
If winning this project is merely a “drop in the bucket”, that is a lot of sales and client management time being taken up by something that won’t move the needle. Small is relative of course. As the quality of your clients and the size of your projects increase, your definition of small will change as well.
It's a Request For Proposal (unless it's really really good...)
A request for proposal typically takes far longer to respond to, due to the extra hoops you must jump through to meet the RFP requirements. At the same time, RFPs are more likely to be shopped around to many providers. This means that the time put into responding to the RFP can be a highly speculative investment.
So should you respond? Maybe. If winning the RFP will make a big difference in your business AND if the RFP requirements aren't too onerous AND you can demonstrate that you are unquestionably the right choice for the job.
I once received an RFP that devoted 2 pages to the website specification, but then contained 16 pages of boilerplate instructions on what the proposal must include. Needless to say, we didn't pursue this one.
Remember: the sales conversation is a chance for both parties to evaluate if this is a good fit. There is nothing wrong with turning down a project that isn't right for you. Most prospects will appreciate your honesty.
LESSON #3: Match Your Spending to Your True Income
Before you panic: this isn’t about being a frugal miser and not enjoying your hard work. Conversely, we’re here to live an awesome and joyful life, and yes that should mean some nice toys, epic vacations, or whatever is important to you.
But it is absolutely imperative that you never let your lifestyle creep up to the point that you need your current level of income to pay the bills. Trust me, when you've had several good months in a row, it's a very easy mistake to make.
Slow periods will happen, and you don't want to be caught earning less money than you need. Of course savings can fix money shortfalls, but earning less than you need can undo your business in a much more subtle way:
When you NEED the money, it's very hard to be disciplined about what clients you take on!
How many of us are capable of turning down low value projects or not discounting our services when there are bills looming on the horizon? Especially when we have no idea when something better will come along?
The bills win every time and you end up taking whatever work you can get. This gets you paid, but also puts you in a backwards slide of devoting your time to lots of low value work, and consequently lacking time to find high value work. This can be very hard to reverse.
The way to avoid this is to limit your personal and business expenses to be well below your means. This prevents a natural slow period from turning into a crisis, and gives you the breathing room to make the right decisions if you run into trouble. Best of all, the money that you don't spend simply goes into savings.
I like to suggest spending no more than 70% of your after tax income as a good start. If you’re not currently in that boat, it might be time to either cut down on the luxuries or start finding higher paying projects to balance things back out.
Once you’re bringing in more money than you need each month, it's far easier to think strategically about the work that you accept rather than chasing any business that comes your way.
LESSON #4: Being Healthy is Part of Your Job
It can’t be avoided. If you want to be a top performer, and if you want to build a successful business for the long-run, taking care of your body isn’t a luxury. It is your job.
When you first get start out, especially if you are young, it’s very easy to burn the candle at both ends while treating your body like a frat house. “Sleep is for the weak”, “I can eat anything I want”, “I don’t have time to relax”.
I’ve been there, and like every young guy before me, for years I thought I was getting away with it. But I wasn’t. The stress caught up to me, my metabolism slowed down, and whatever time I gained I quickly lost to recouping my body.
But it’s not just about losing productivity. Medical research keeps advancing and we’re now starting to find out that sleep deprivation, high stress, and poor diet have much longer-term impacts that can’t easily be erased by living healthy “later”. Suddenly I’m no longer proud of getting through university on 5 hours of sleep per night and 4 extra large coffees per day.
Then there's this secret truth of exercise:
"I definitely achieve twice as much in one day by keeping fit." - Richard Branson
Whenever I try to tell myself that I don’t have time for exercise or eating right, I just think of serial entrepreneur Richard Branson who is way busier than most of us ever will be. Staying fit doesn't take time away from you, it gives it back with dividends.
LESSON #5: Be Absolutely Completely Client Focused - That’s what it’s all about!
If you follow the rules above, you will have carefully cultivated a roster of valuable clients who you love working with, and who love working with you.
This is where many service professionals screw this up. They start letting their high demand and skills get to their head, and start to seriously believe that their business exists to meet their own needs.
THIS IS WRONG. IT IS ALL ABOUT THE CLIENT.
There’s a reason that top performers are selective about the projects and clients that they take on (see lessons 1 and 2). They know that it takes an immense investment of time and mental energy to treat a client right and to build deep long-lasting relationships. That investment is precious.
This means communicating regularly, not just making sure that their needs are met but also predicting their needs, and making them feel like the only client in the world (hey this is great advice for other types of relationships too).
This is what your business is all about. You are being selective about the projects you take on so that you can afford to deliver absolutely massive amounts of value to the right clients. More than you promised and more than what they expected. Do this, over and over, and you will have an abundant roster of high quality clients that you enjoy working with, and the freedom to choose when to take on new clients.
LESSON #6: Invest In Yourself Daily
Ultimately growth in what you are capable of delivering to clients, growth in your sales, growth in your personal life, are all achieved through small actions that you take every single day.
Recently I started running regularly again. I didn’t do this by waiting for the day where I would wake up and just magically be a three-times-a-week runner. I did it by putting on my running shoes and going for a run. Then two days later I went for another run. Running three times a week is just the sum of the daily decisions I make about running.
Do not be afraid to invest heavily in yourself. Invest in new knowledge, in building new habits, in practicing your skills. It's the small decisions to improve yourself each day that add up to mastery.
Case in point, Freelance Transformation is the brain dump of what I’ve learned over the past 9 years. The insights that truly helped me grow my business. But this wasn't learned over night. It was learned bit-by-bit, through success and failure.
I’m going to continue learning, and sharing what I learn. If you don’t want to miss it, you can enter your email below to get updates to your inbox. You’ll even get things that I send only to my subscribers, like my guide to getting High Value Clients.
While you’re at it, here are a few other resources to keep you growing:
TEDx - Why You Need Sleep | Kirk Parsley
Eye-opening talk by medical doctor and former US marine Kirk Parsley on why we really do actually need sleep.
The 4-Hour Workweek
It's not about having more time to work, it's about leveraging that time to get far more done than most people.
Nerd Fitness Blog
Brilliant fitness advice aimed for desk workers and average Joes.
How to Win Friends & Influence People
The classic book by Dale Carnegie with critical insights on how to get along with people. Service businesses are built on relationships, making this a must read.
Disclosure: the Amazon links are affiliate links.