Do you ever feel this insane pressure as a service provider where you have to grow your business and the only way to do it is by creating some type of agency? I know that’s how I felt for a really long time.
When I started my business as a web designer, I saw all of these messages out there by coaches saying I really needed to find other people that could do the client work for me and create an agency.
Rather than spending time doing client work, I should only be spending my time marketing and selling my services, which is the way to grow a service-based business. There were so many coaches and messages floating around on social media, that I felt that the only way I could be successful was to follow that route.
How It Started
I hired a virtual assistant (“VA”) that was going to come in and help me. I hired a web designer who was going to help me with my client work and I hired a graphic designer because I was also told I needed recurring revenue. Once the website was finished, I needed a way to get those clients to come back month after month, by looking for social media graphics that were cohesive and fit in with the website that we provided them.
I then promoted my VA to be an online business manager who would take over my responsibility of managing the team, allowing me the ability to market and sell my services.
To be honest, I wasn’t really happy with the direction that things were going in, but I was told that this is the way that things are done. And then COVID-19 happened.
How It Ended
All of a sudden, I found myself in a position that I never thought I would be in. I had no childcare. My husband was deemed an essential worker and he carries our health insurance so my business had to take a giant backseat. I had several clients I had made commitments to and I was determined to meet those commitments.
So I started working every weeknight and every weekend. I hustled my behind-off, but there was no additional time for me to market my own business. I had no bandwidth to take on additional clients. Since I didn’t have any money coming in, I didn’t have the ability to pay these three people that were working for me.
I immediately felt the weight of this huge responsibility. I put it off letting them go as long as possible because I didn’t want these wonderful people to have to go find another job in the middle of a pandemic. I knew that their families were depending on them. As difficult as it was, I had to unfortunately let my team go.
However, what doesn’t kill you, makes you stronger for sure. This forced me to take a very hard look at my business and I decided I never wanted to be put in that position again. I wasn’t happy before the pandemic and I didn’t love the business model. I didn’t want to spend my time marketing and selling my services.
The Changes I Made
I really wanted to be working directly with clients. I wanted to be putting the websites together. I wanted to talk about more than just the websites but also about the strategy and the branding. I took the pandemic as a way to see what would make me genuinely happy day-to-day, in a way that I hadn’t been in the past.
The conclusion I came to was that I needed to ditch the agency model and it didn’t mean that I wouldn’t be able to grow and scale my business.
Growing and Scaling
I heard this amazing explanation the other day of the difference between growing and scaling your business. When you grow your business, you increase your revenue but typically, you’re also increasing your expenses.
You might have an agency model where you’re bringing in more clients, but you’re hiring people to help you service those clients. So at the end of the day, your profit is probably going to stay pretty much about the same.
When you scale your business, you grow your revenue but you either keep your expenses the same or decrease those expenses. Your efficiency improves with your scale so you see a growth in your profit.
Personally, I was able to scale my business by changing my business model and increasing my prices. The way that you’re able to justify an increase in your prices is to offer more value to your clients.
For me, that meant not just offering websites, but also offering a complete brand strategy. I let go of the social media graphics since I didn’t want to participate in that game and decided that recurring revenue was not a particular path I wanted to pursue.
Instead, I wanted to provide amazing value because after looking at the first few clients I had worked with, I realized that they needed more than just a website to be successful.
They lacked a full brand strategy so even though they had a beautifully designed and executed website, they weren’t getting the results from their business that they really should’ve been. It would’ve been better for them to invest a little bit more to get the full brand strategy and beautifully designed website in order to get better results and outcomes for their business.
Learning that I could provide so much more value and could charge a higher price, meant that I could take on fewer clients and be more profitable. The value that I provide now is miles ahead of the value that I provided before I made this switch.
I am able to spend less time marketing my business and more time reinvesting in myself so that I can elevate my skills. I am always looking for better ways of sharpening my skill set so that for each new client I onboard, I’m providing a slightly higher level of value and when I cross a certain threshold, I’m able to raise my prices ethically.
It also means that I’ve had to niche down on the clients that I work with.
These days I’m working with done-for-you service providers who are able to pay my services off with only an additional two clients.
Since this is a smaller and more specific group, I’m able to figure out precisely what these people need and am able to provide it at a much higher level, returning amazing results. As a result, my business is doing better than ever, making it easier to obtain referrals and network with my target customers.
It’s easier for me to get referral partners because it’s easier for me to communicate who I work with.
Let’s Normalize It!
We need to normalize the idea that as a service provider, it’s okay for you to be the only person providing the service. If you’re able to get better at providing that service with more experience and with the goal of investing in yourself, the better clients you’ll be able to attract.
If you attract better clients, it’s easier to raise your prices. Having a higher price point means that you’re able to scale your business in a whole new way.
As a result, I’m able to make a larger impact on the businesses that I work with. I’m able to see their growth and that is something that gives me a sense of fulfillment.
I am so much more comfortable with this business model and much more comfortable by not having to manage a team that is working to provide services to my clients.
I’m now able to be in control of the whole process, including what the client sees and when they see it.
Who You Should Hire
That doesn’t mean that I’m not going to hire a bookkeeper or an accountant, or that I’m not going to hire a VA to help me with administrative tasks. These are absolutely things that I am happy to hire for, but I hire very differently now than I did before the pandemic.
This is another reason why I provide my services on a project basis. I don’t charge an hourly rate. I only sell my services in packages.
As service providers, we need to focus on showing that this is an extremely valid and valuable business model. It is okay to intentionally stay small as a team and work with fewer clients at a higher price point than feeling like we have to provide a templated service over and over and over again so that we can hire people to provide that service for us.
There are additional challenges you’ll come across as you raise your prices. There are many people out there who are willing and able to pay $500 for a website. There are far fewer people out there who are willing and able to pay $6,000 for a website.
This means that my marketing has become less about finding as many leads as possible and more about finding and building relationships with potential clients. I spend a lot more of my time building relationships, not only with these potential clients but with referral partners. I now find myself spending a lot more time networking and that’s okay.
I’m comfortable with this approach as opposed to running a bunch of Facebook ads. I don’t find that I have to with this business model.
Keeping your business intentionally small is something that needs to be explored more often. There are a lot of service providers out there who are spinning their wheels by taking the advice that they need an agency and that they have to hire out a large degree of tasks. That’s not the case. There are so many other ways of growing your business and scaling your business.
If you don’t want to spend all of your time selling and marketing your services, and want to spend more time working on client projects and working directly with your clients as a “done for you” service provider, it’s a very valid business model to intentionally stay tiny and scale your business by raising your level of service. You can do this by increasing your prices and the value that you provide to your clients and by remaining extremely lean and efficient.
Do you need help figuring out your own business model? This is part of the clarity that comes with working together in the Clearbrand. Learn more about this service.
- The Agency Business Model: Is it Right For You? https://smallbusinessboss.co/the-agency-model/