I remember my first $20,000 month…
It was back in the fall of 2003 and for me, it was a HUGE milestone. I remember thinking if I could do THAT, imagine being able to close $30,000 a month…$40,000 a month…even $50,000 a month! I remember the excitement as I calculated the numbers.
Today, I’d be in BIG trouble if we only closed $50,000 a month. And last year, I actually had a $452,088 DAY. Now I don’t say that to brag…certainly there are a lot of businesses that are doing far better than we are and that doesn’t make me “better” than anyone. But what it does mean is that I have some insights on what it takes to grow a multi-million dollar consulting business from the ground up.
How did I do it? Well, there are many things that I needed to get “right” and far more than I can comment on in this post. However, there is ONE really big key I’ve learned and discovered…that is the concept of leverage.
Let me explain…
The biggest income-limiting mistake for the independent consultant – be it technology or otherwise — is trying to get rich trading hours for dollars. Even at a 100% utilization (which is impossible), you would need to bill out at the rate of $480.76 per HOUR to make a million dollars. And over-achievers working 60 hour weeks still need to charge $320.51 per hour to hit the million dollar mark – and that is not accounting for all the non-billable, non-earning hours you have to put in to manage, market and deliver those services. No matter how smart you are, how proficient you run your business, no matter how organized you are, the reality is you can’t get truly rich simply trading hours for dollars.
That’s why leverage is so important…and based on my dealings with thousands of small IT business owners, most do NOT understand this concept. If they did, they would stop thinking that “more time” is the solution to all their problems. They would stop chasing the shiny new penny and stop focusing all their efforts on more new customers to solve their revenue problems. Yes, getting new customers is important, but should NOT be your sole solution to your lack of revenue problem. Dramatic increases to income and profits are made NOT by working harder or putting in more hours, but by leveraging the assets you already have…be it clients, opportunities, market trends, systems, employees and partnerships.
Other leverage points often overlooked are information and experience…and only a tiny percentage of people actually “get” this and turn it into revenue. Also systems and how to use them to maximize the productivity and profit out of EVERY customer touch point, sale, and opportunity. Also knowing how to synergistically plan projects, marketing campaigns and initiatives that enable you to take $1 and leverage it to serve multiple purposes, feed multiple goals and secure on-going profits rather than serve a one-shot opportunity.
Conversely, you also have to know when a project, action item or initiative is under producing or doesn’t have the opportunity to be leveraged properly…and then have the strength of character to put a bullet in it regardless of the short-term consequences.
Clearly, this is only one small, tiny (but significant) part of taking your business to the next level. But if you are already up against the wall without another minute available to do marketing, that’s all the MORE you need to understand and apply the concept of leverage…you can’t grow your business because there ARE no more hours in the day.
That’s also why it’s important for you to join me and your peers at the upcoming 3-day Boot Camp in Nashville, April 14 – 17th: www.robinsbigseminar.com At the Boot Camp I’ll be delivering a powerful evening seminar on this very topic: “How To Get Clients To Line Up And Pay You Seemingly Enormous Fees For Consulting” and teaching you how to use leverage to get you to the next level in your business and in your life. While there you’ll most certainly learn many other high-leverage strategies to help you get to the 7-figure level and beyond.
I’m really looking forward to this seminar, and I can’t wait to learn from all the great speakers you’re bringing in. My boss loaned me the CDs from the 2008 Boot Camp and I’ve been listening to them on my daily commute.
I gotta tell ya…this stuff is awesome! I commandeered the big white board in our office and have been brainstorming on it so we make sure to take action on the ideas from the CDs.
Can’t wait to see you all in April!
Great post Robin. What amazes me even more is the most companies would rather pay for hours worked rather than results!
There’s leverage and then there’s real leverage. When I think real leverage I think of companies like Gillette. Giving away inexpensive razor handles and making high margins on razor blades that only fit their handles. A little innovation goes a long way in a business model that provides for a basic need like a close, comfortable shave. Marketing those differences effectively makes all the difference in the world!
IT has become a basic business need for small businesses. After 20 years in IT consulting trading hours and solutions for dollars, I’m changing my business to create more real leverage. So – what’s your handle? And what’s your blade? I’m using Robin’s techniques to market innovative services & solutions and provide a close, comfortable IT experience to our clients.
Last time I went to bootcamp (Ft. Knox, Kentucky) was in the summer of ‘83. I’m way overdue for another bootcamp, see you in Nashville in April!
I’ve been working with Team Robin for over a year now and I can give a big AMEN to this article. Most of us only know how to be tech’s in our business and we all work very hard (it’s not a lack of effort that holds people back) but it’s those who learn to work “smart” that will see the big jumps in revenue.
Leveraging not only dollars but other resources (especially your employees) is key. You have to learn to delegate and focus your time working ON the business instead of IN the business.
We doubled our hourly rates last year and didn’t lose a single client.
The Boot Camp is one event I plan for in advance every year. Can’t wait.
The concept of a 7 figure business is great . Small business Customers like to do things on a shoe string or even get a mate to fix the broken equipment. The challenge is being able to choose the right customers and pick the ones that will help you get there. Especially looking forward to hearing more about your strategies and the seminar sounds like a fantastic start. Trading Dollars for hours as consultants do is a mugs game and one has to re position to achieve the leverage required to make those goals come true . After 35 years in the business , I see its time to become a consultants consultant and also to establish a global virtual business instead of a local small market operation . These strategies will likely help to guide that direction & purpose. Best wishes Adrian http://www.hispeedbiz.net
Robin, great post and leverage is always on my mind as I run my MSP/VAR business alone. How do you make the most use of leverage when cash flow is negative and OPM is unavailable is my question.
this post is very usefull thx!
Great post Robin. What amazes me even more is the most companies would rather pay for hours worked rather than results!
The concept of a 7 figure business is great . Small business Customers like to do things on a shoe string or even get a mate to fix the broken equipment. The challenge is being able to choose the right customers and pick the ones that will help you get there. Especially looking forward to hearing more about your strategies and the seminar sounds like a fantastic start. Trading Dollars for hours as consultants do is a mugs game and one has to re position to achieve the leverage required to make those goals come true . After 35 years in the business , I see its time to become a consultants consultant and also to establish a global virtual business instead of a local small market operation . These strategies will likely help to guide that direction & purpose. Best wishes Adrian http://www.hispeedbiz.net