Increase Your Revenue: For a Service-Based Business Owner
Last weekend I was at a family party and I ended up in a conversation with my baby cousin-- who admittedly, is a grown-up in his late 20's, but he'll always be my "baby cousin" no matter his age. My cousin and his new wife are first-time entrepreneurs. They've become franchise owners in a mobile bartending service where the clientele is predominantly brides and/or someone throwing a party who has the budget to spend on hipster beverage services. Because it's basically impossible for me to talk to another business owner without trying to give them as many ideas as possible --and because this is my family and therefore I really want them to succeed-- I started listing out everything I could think of from back when I was providing service to a similar crowd as an event planner. I thought perhaps some of the ideas I shared with them might be helpful for y'all so here's how to increase revenue if you're a service provider.
- Prequalify Your Customers - Back when I was a newbie I was so excited that anyone might want to hire me I put every ounce of effort into anyone who looked my way. I'd have phone calls and meetings and when I was really green I'd even put full proposals together (filled with all my best design ideas 🙈) and send it over in an attempt to lock in the client. Inevitably we'd get to pricing and about 80% of the people I thought were potential clients would come back with the same response: "That's not in the price range of our budget." Finding out that someone can't afford you after you've already invested a ton of time isn't their fault, it's yours. Most potential clients are new to this process (or in the case of most brides, had never planned a wedding before) so they didn't know to find out about fees before the process got too far along. My cousin said this happens to them all the time. If you find yourself in a similar situation then and must find a way to clarify your fees before you interact in real life. Why? Because time is money. Said another way, you can't waste time in pursuit of something that won't make you any money. If the client's budget and your fees are in misalignment then they're not the right client for you. The simplest way to do this is to list a minimum fee on your website. When I was a wedding planner I listed out all of my services in a beautiful and descriptive way and then said something like, "Coordination fees begin at $5,000". That way, before they ever reached out they knew exactly what to expect. For my cousin, I suggested something like "Our services begin at $XX per person" That way someone can easily figure out if it's within their budget by multiplying by the number of guests.
- Save Time With a One-Sheet - Every service-based business should have a one-sheet you can send to any potential clients with all the questions they're most likely to ask you the first time you speak. This is to save you time which A: saves you money and B: adds a second layer of pre-qualification. Basically you're trying to entice the right kind of clients and dissuade someone who isn't a good fit for you. Things on the one-sheet can be details about services, pricing information, gorgeous samples of your work, client testimonies, etc. What's a "one-sheet"? It's a well-designed PDF that explains a bunch of information on only one page. Make sure it's high quality but a small enough file to email without destroying someone's inbox. Also, you can totally make one on Canva for free so no excuses.
- Understand that Wasting Time is Costing you Revenue - Right about now is when someone is like "Hey, those were two ideas for efficiency but you said this was about increasing revenue! Where are the bomb client acquisition strategies and what have you?" More ideas are coming yo, but first, you have to understand that you wasting time IS costing you revenue. It's stealing your focus, it's taking your energy and it's keeping you from the big needle-moving results you need in order to grow. Think of all the things you currently waste time on in your business and imagine if you could get back those hours and use them to acquire more clients.
- Always Offer a Low, Medium and High Package. Always. - Many service providers have a fee and they rarely waver from that single offering. It makes sense in terms of clarity but not a ton of sense in terms of marketing. See, I used to have a flat fee for coordination services ($3,000) and I was trying to figure out how to get my potential clients to want a bigger service from me. Then I read a study that said that if you give people three options in pricing most will pick the one in the middle... which gave me an idea. From then on my one-sheet included three packages- Tall: $3,000 | Grande: $4,500 | Venti: $6,000 -- feel free to laugh, but 15 years ago modeling my coordination packages after Starbucks drinks were adorable, I promise. With each package I outlined what they got and found a way to add on services that increased their value by $1,500 with each increment. Almost immediately I saw a drastic increase in my revenue since most people automatically chose the $4,500 package. Also, I did have more than a few who chose the biggest package option (which I'd never even had before because I didn't think anyone would spend that much!) I've counseled small businesses with this over and over again and I can't begin to tell you how many people send me notes like "HOLY CRAP! People are buying the VIP package, we can't believe it, thank you so much!!"
- Always Upsell. Always. - Dude, are you upselling? Meaning, do you have little additional things clients can add to their order or an a la carte menu they can choose from to "enhance their package?' If not, you are leaving so much money on the table. Here's another business fact, you always make more money with existing clients than you ever will by finding new customers. As an event planner, I had an a la carte menu that had 5-7 mini services that would be easy for me to pull off but increased my invoice without a ton of extra overhead from me. These items were $500 - $2K extra and were delivered as options when I sent over the proposal. Did every client use them? No. But a lot of them did y'all and without the a la carte menu and the prompt to see if they wanted any "extra perks" I would have missed out on a ton of revenue over the years.
- Stick to Your Pricing - OK, I totally understand that there are times when you're starting out when you do things for free or at-cost in order to grow your clientele and experience. That being said, if you've been in business for more than a year then stop lowering your rates to accommodate someone's budget. I can't tell you how much my business (and my good reputation) increased when I decided that I wouldn't lower my rates again no matter what. The first step to pulling this off effectively is to make sure you're priced appropriately. I did this by finding at least three peers who had similar service and experience level. I did the math to figure out the average of their fees and then I added 25%. I added 25% because I felt confident I worked harder for my clients then anyone else would. I also set out from the beginning to have high-end clientele and that meant I needed to be a bit more aggressive with my pricing. You don't have to push for higher-end pricing, Amazon has made a killing by charging the least not the most so there's room for everybody. All that matters here is that once you decide on your fee structure, stick to it! "But Rachel, this potential client is basically a celebrity in my town and if they tag me on their..." NO! If they're that fancy they can afford your pricing. Someone tagging you on Instagram won't pay your rent this month! "But what about this impressive business that I've always wanted to work with?? They said if I did it gratis this one time then I..." Nope. Not real. If they're a reputable business they shouldn't be asking anyone to work for free because they never would. The bottom line is this if you don't believe you're worth what you charge no one else will either. Stick 👏🏻 To 👏🏻 Your 👏🏻 Pricing 👏🏻
Alright friends, I hope you found this article helpful and as always if you need more insight or want me to cover something specifically then comment below and let me know how I can help.
Lastly, if you want to learn ALL the things about how to increase revenue, scale your team and be an exceptional leader check out our 3-Day Business Conference.