Get Your First Clients & Pricing Strategies

Get Your First Clients & Pricing Strategies

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Welcome back to our "Launching Your Dream Business" series! Today, I'm going to show you how to find new customers for your business and price your services accordingly. Hey everybody, this is Ted. Outside of YouTube, I'm the CEO of a marketing agency that I started in a room above my parents' garage 22 years ago. In this series, I'm sharing how you can launch your own dream business and make a good living doing it. If you want to learn more, follow along!

Finding Customers

Finding your first customers can be challenging. While many people start by helping colleagues, friends, and family, I chose not to mix business and personal relationships. Instead, I used two effective methods: volunteering and cold calling.

  • Volunteering: This approach allowed us to build a portfolio and showcase our work to future clients. Think of it as offering free samples at a store—people can try your services and may become paying clients down the line.
  • Cold Calling: This remains one of the most cost-effective sales methods. While many salespeople avoid it, mastering cold calling ensures you'll never be without work. I plan to do an entire series on sales, so keep an eye out for that!

In addition to these methods, you can attract new clients through:

  • Content Marketing
  • Business Networking Events
  • Speaking Engagements
  • Guesting on Podcasts

For these strategies, I recommend checking out my video on unique selling propositions in my digital marketing strategy planning series.

How Much to Charge

One of the most common questions I get is about pricing services. Here’s how to figure it out:

  1. Determine Your Desired Salary: Start by deciding on a realistic, comfortable annual salary. This doesn’t mean cheaping out, but also not aiming for the high life initially.
  2. Calculate Your Hourly Wage: Once you have your desired salary, break it down into an hourly wage.
  3. Triple Your Hourly Wage: This becomes your billable hourly rate. Why triple it? Because you won't be working on billable tasks every hour of the week. You need to cover sales efforts, administrative tasks, and downtime between projects.

With your billable hourly rate determined, you can start charging clients. I prefer a fixed fee model over hourly billing. Here’s why:

  • Fixed Fee Model: Clients appreciate knowing the total cost upfront, avoiding unexpected expenses. For you, as you become more efficient, you can complete projects faster while maintaining the same rate, thus increasing profitability.

Fixed Fee vs. Hourly Model

Fixed Fee Model Benefits:

  • Client Satisfaction: Clients know the total project cost upfront, which helps them budget better.
  • Increased Efficiency: As you get better and faster, you can complete projects quicker and still charge the same rate, increasing your earnings.

Pro Tip: Don't worry too much about overcharging or undercharging. The market will provide feedback, and you can adjust your pricing accordingly. Over my 22 years in business, I've changed my pricing model numerous times.

Figure Out Your Business Model

There's always a debate between one-off projects and recurring revenue. Here's my experience:

  • One-Off Projects: For the first 16 years, my business relied on one-off projects. The advantage was completing large projects and moving on quickly. However, this model led to a feast-or-famine sales cycle, which was unstable.
  • Recurring Revenue: Today, 70% of my business is based on recurring revenue. This model offers more stability, with predictable income streams. It became viable when I shifted to a results-driven model instead of hourly billing.

Don't stress too much about choosing the perfect model initially. Start making money, and you'll figure out what works best as you go.

Outro

Once you start making money, you'll realize it's a lot of hard work. There are only so many hours in a day, meaning there's a ceiling to how much you can earn on your own. At this point, it's time to scale your business and hire top talent to join your team.

In the next video, I'll share key tips on hiring and bringing on A-players for your business. If you enjoyed this video, please subscribe, like, and share. Thanks for watching! I'm Ted, and I'll see you in the next one. Bye!