EFP 60: 6 Gotchas Regarding Service Based Businesses

Justin Cooke

August 15, 2013

Every business model has its flaws and running a service-based business is no exception.

The Flaws of a Service Based Business

Joe and I have been involved in several companies that offers services to businesses/clients and have spoken to many of you that run consulting agencies. It’s rough out there! We wanted to sit down this week and discuss some of the “gotchas” that come with running a service-based business and share our thoughts on how to overcome those obstacles.

I’m interested to hear if you’ve run across any of these issues in your business – we’d love to hear from you in the comments!

Check Out This Week’s Episode Here:

Direct Download – Right Click, Save As

Topics Discussed This Week Include:

  • News/Updates: AdMob, WPRankTracker, and due diligence reports
  • Customer retention and selecting the right clients
  • Value your time and the prospecting black hole
  • Getting squeezed like a turnip
  • Delivery expectation and productized services
  • Adding value and making someone else rich

Mentions:

So…do you work as a consultant, run an agency, or delivery services? Have you struggled with any of the points mentioned in the show? Anything we missed? Let us know on Twitter, drop us a voice recording, or leave us a comment below!

 


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Speaker 1:                           Welcome to the Empire Flippers podcast. Are you sick and tired of gurus who have plenty of ideas but are short on substance? Worried that e-book you bought for $17.95 won’t bring you the personal and financial freedom you long for? Hey, you’re not alone. Join thousands of others in their pursuit of niche profits without the bullshit, straight from your hosts Justin and Joe from Empire Flippers.

Justin Cooke:                     Welcome to episode 60 of the Empire Flippers podcast. I’m your host Justine Cooke, and I’m here with Joe, Hot Money, Magnotti. What is going on buddy?

Joe Magnotti:                    Number 60. We’re going to be in the senior citizen line pretty soon.

Justin Cooke:                     Six, zero, man, I’m digging it. So, we’ve got a great episode lined up. We’re going to be going over the six gotchas regarding service-based business. So if you’re a contractor or have a contractor service-based business, we want to cover some of the problems or sticky areas you can run into, some of our answers for fixing those.

                                                So, more about that in a minute. Let’s do some updates, news and info. First thing, we got a new iTunes review, buddy.

Joe Magnotti:                    Hit me up, buddy.

Justin Cooke:                     Five stars from Stephen Coffey says, “Love this podcast. I discovered them a couple of months ago ripped through all the episodes during my breaks from studying for the bar exam.” Sweet buddy, we got an attorney checking out our stuff or soon-to-be attorney, I guess is the best way to put it.

Joe Magnotti:                    Yeah, thanks a lot Stephen.

Justin Cooke:                     Next, we wanted to mention, we got this from Lee Shepard, sent me an email, said, “Google AdMob has now merged with AdSense. So, the update for that is that it requires now $100 in your account to get a payout. So, if you were getting eight bucks a month or 20 bucks a month or whatever, you can’t just transfer your PayPal account anymore. The other thing is it requires a bank account instead of just PayPal. So, hat tip to Lee. Thanks buddy for the email, and for any of you using AdMob make sure to note the change.

Joe Magnotti:                    I wonder now if it’s going to have a similar interface like AdSense or if we’re going to be able to use it. We’d be able to select AdMob ads, kinda thing.

Justin Cooke:                     I don’t know, and getting into the ad game with apps, mobile apps, just isn’t really our game. So, I don’t know. I don’t plan on doing any mobile apps in the near future.

                                                Next point we want to bring up is WP Rank Tracker had a bug. We since fixed it, but if you own it, make sure to upgrade to version 3.2 and that is now available.

Joe Magnotti:                    Yeah, so that’s a free upgrade for anyone out there with a registered version. We were having some missing reports. So, if you had WP Rank Tracker installed, and you weren’t getting any data, you were affected by the bug, and please update to 3.2 which again is free. And we’ll fix that.

Justin Cooke:                     Last point I want to cover is we are now offering a due diligence report on selected niche sites in the marketplace. So, if you go on the marketplace, and you click on the site to open up the pop-up window, there’ll be a place where you can actually download the report. Most of these are like 10 page reports, and they’re full on due diligence for the sites. Definitely worth checking out.

                                                It has a lot of good information. On the first page is a grade. So, there’s an overall grade. So, this is a way for us to standardize our due diligence on all of the sites, and I think this is going to be great for buyers, for sellers. I think this’ll be a really great thing we’re adding.

Joe Magnotti:                    Yeah, I think at first, we’ll stick to just higher-end sites. It won’t be on all sites, but we will use it on some of the vetted sites and some of the larger packages that we offer. And it’ll be a good, detailed report on the risks and the possible benefits of buying the site.

Justin Cooke:                     One addition, on the marketplace, we’ve been struggling. People haven’t been able to buy our sites recently. Sucks buddy, it’s really bad. So, you go to the site and the pop-up isn’t coming up. You’re not able to actually purchase the site and go to PayPal. I promise you, we’re working on that. It’s a pretty major problem for us. We’re definitely trying to fix. So, in case you’ve run into that, one of the fixes right now is just to refresh or try a different browser. We do have our developer working on that. If you’ve been trying to buy sites from us, and haven’t been able to, we do want to apologize but enough about that. Let’s get right into the heart of this week’s episode.

Speaker 1:                           This is the Empire Flippers podcast.

Justin Cooke:                     So as we mentioned at the top of the show, we’re going to be going through six gotchas, regarding service-based businesses, and we’re also going to explain some of the answers we’ve come up with and our experience in running a service-based business and those of our friends. And I have to tell you that we know a bunch of people that either run a consulting shops, agencies, and these are consistent struggles that they have. And that we’ve had running an outsourcing company. So if you have a service-based business, you run a consulting company or one-man shop or an agency, hopefully, you can take some of our experiences here, some of our advice and apply that to your own business.

Joe Magnotti:                    Yeah and Justin, this is not to say that service-based businesses are necessarily bad. These are just six things that we think you can use to improve your service-based business.

Justin Cooke:                     Yeah, six things that suck about service-based businesses that you can make a little less painful. So, the first one I want to talk about is when clients bail or poor customer retention and this is big. In a service-based business, you’re going through this lifecycle, where, bring clients on, right? You try to keep them as long as possible, and they’re going to leave. It may be three months down the road. It may be 18 months down the road, but at some point, most customers leave. So, you’re constantly shopping to bring on new customers to replace the ones that are leaving. So, it leaves you, especially as a one-man or two-man or three-man shop, you’re always trying to both do the hunting and do the gathering of keeping the clients on board, and you have the balance that.

Joe Magnotti:                    Yeah, I think that this is part of the recurring model that service-based businesses get themselves into is because they’re naturally reliant on that recurring revenue. They know that they have to not only keep people as long as possible, but they know that the average person sticks with them for eight months. So, they better be looking for new people to replace the people that they’re going to lose in eight months.

Justin Cooke:                     I didn’t think about this when we talked about this before the show, but one of the scary things … It’s so funny that it’s almost scary to take on a major client space or very large client, because you’re thinking … It’s one of those good problems to have, I guess, but you take them on, and then they kind of own you which we’re going to get into that little bit later, but let’s talk about ways to improve retention. And similar to our niche site process where we put a ton of effort and energy into selecting the right keywords, because we know if we choose the wrong keywords, we’re throwing good money after bad. It’s very similar with clients. So, making sure you take on the right clients. So, talk a little bit about that Joe. What do you think are the right clients for you?

Joe Magnotti:                    So, with the outsourcing business, we learned over time that clients that had a need for less than three or four agents were just not worth it for us, and the reason for that is because they just wanted one person to do one thing half week or something like that. It just means that they don’t have enough money to spend with us. We’re going to spend a lot of time, effort and energy training that person up on their process and getting the thing involved. Whereas they’re not going to stay with us long enough for that to be worth it for us to see an ROI.

Justin Cooke:                     And here’s the thing, it’s not some snobby thing where we’re thinking, “Oh, well, they’re just not big enough for us.” No, it’s born out of experience, because we know if we take on one of those smaller projects that some of them are going to bail relatively soon. We actually lose money on it, because we’re spending so much time upfront.

Joe Magnotti:                    Yeah, and in the other one is, and we talk about this all the time, is people I don’t know their process, right? I have an idea that I kind of want to test out, and I want to use outsourcing to do it. And I’m willing to bring five agents on to do that. Yeah, but you don’t know the process. So, I’m going to have to help you figure out the entire process and be your consultant, basically for free, and even if we charge for that, it won’t be affordable to you. So, you won’t get an ROI. So, you’re not going to stay with us long enough for us to get an ROI.

Justin Cooke:                     We don’t want those clients that have a 30% chance of sticking with us past six months. Even if they have a pretty good … or even if there’s a slight chance that they’re really going to expand and grow with us, we don’t really want to take on that risk. We just don’t want to do it. So, we had to kinda figure this out through trial and error, but one of the other things that you can do to help alleviate this problem is look at ROI-focused pricing. So, one of the things you can do with this to make sure the customer sticks with you is that you’re only both getting … You’re both getting upside, only if it’s valuable to your client.

                                                So, you have to cover your nut. You have to make enough to make sure you’re paying for your expenses. So, if you have employees on the project, you want to make sure that their paid. You don’t want to come out of pocket for a customer, that’s always a bad situation, but you might want to put your upside or value with your clients value. So, you’re making money, profit, if they’re making profit. Does that make sense?

Joe Magnotti:                    Yeah, and I think that’s a great way to schedule the pricing and should be done in a service-based industry. So, you’ll attract more clients that way. You’ll make it … Clients will stick with you longer.

Justin Cooke:                     Yeah, they’re going to stick with you longer, because they’re only going to stick with you, and you’re only going to keep doing it, if it’s making money, if it’s working for you and for them. Now obviously, this doesn’t work for things where there isn’t a direct ROI attached, but if you can in anyway find a way to put your value in with theirs and put your profit and in with theirs, you may end up having a client for a lot longer than you would’ve otherwise.

                                                Second point we want to talk about a little bit is the sales black hole or the cost of acquisition. A lot of times in the consulting business or in a service-based business, people think that their time is free and this is, I think, a new entrepreneur mistake is that they don’t attach a value to their time when they’re shopping for new clients.

Joe Magnotti:                    Their sales time is free.

Justin Cooke:                     Yeah, so-

Joe Magnotti:                    They know that they’re going to make $20 an hour being a web designer, but they don’t think about all the hours they spent looking for those people to pay them $20 an hour.

Justin Cooke:                     Yeah, yeah, so, I know that I want to make 20, 25, 30 bucks an hour, whatever it is. Let say I’m 30 bucks an hour and that’s what I want to make, so that’s what I’ma go and charge, right? I’m just going to charge the 30 bucks an hour on oDesk or wherever. Well obviously, the problem with this is that let’s say I take on a 20-hour job, but it took me 10 hours to get that job, I’m not making my 30 bucks an hour, right? I’m making 20 bucks an hour or whatever it is.

Joe Magnotti:                    Yeah, so, we see this error all the time by people. They think that the sale is basically free, and it’s not. You really have to track that and that’s the best way to overcome this issue.

Justin Cooke:                     You know what I’m going to do? I’m going to call you out a little bit on this one, Joe. I’m going to beat ya up. I remember a while back we were talking about doing something, and you said, “Well Justin, why don’t you just do it?” Because I was looking for someone to bring on to do this, and I think you made the mistake of thinking my time was free, right? Because I do that to you too. It’s not a thing, but we do that. We go “Okay, well why don’t … can’t you just do that? Can’t we just … Can’t you just handle that rather than …?” and that cost us money, because it’s opportunity loss, right?

                                                So, let’s talk about that a little bit. You need to put a value on your time. You need to put a value on the sales funnel, on the acquisition costs of bringing on new clients. You need to value that time, and you need to attach that to whatever it is that you’re charging your clients.

Joe Magnotti:                    Yeah, and I think the easiest way to do that is to figure out how long it takes you to bring on a client. So, tracking how many phone calls to how many leads to how many proposals sent out, how many sales. This is what I’m doing with Eric, and this is what Eric is doing on a daily level to bring on more outsourcing clients. And it works.

Justin Cooke:                     If you’re not tracking that time, you simply don’t know how much time you’re spending, and so you’re like, “Well, I’m getting my 30 bucks an hour, when they sign up.” Yeah, but you’re not getting 30 bucks an hour on your time, because you’re spending a gazillion hours signing up new clients, and it’s funny … It’s good that you brought up Eric, because another way to do this is to set up a lower cost sales funnel or lead funnel that brings them in the door.

                                                So, let’s say that you’re valuing your time, I’m just going to say it Joe, a hundred bucks an hour, right? If you’re spending a lot of time dealing with new outsourcing leads for our business, we have to bake that into our costs on the backend.  We have to bake that into our price to the customers on the backend. Whereas, if we can put someone at 15, 20, $25 an hour doing that same exact job and moving those customers down the lead funnel that saves us money, and we can then pass that savings onto our customers, some of it. And then take some of it as higher margin or better profit for us on the backend.

Joe Magnotti:                    Yeah, I love this idea. Not only because you don’t have to deal with the frontline sales, which I know we both hate, but also, because yeah, it alleviates that upfront cost of having to deal with so many prospects. So, eventually at the end of the funnel, yes, you are dealing with qualifying and maybe closing the deal, but your close ratio is so high and your hours are so low that it’s worth it for you to put that … to bake it into the costs of the product or service that you’re offering.

Justin Cooke:                     Yeah, I’m working with the law firm or whatever. I don’t want to pay 1000 bucks an hour for a partner’s time all the time. There are some things the associates can I do, and I’m cool with them, hopefully, making the determination to have an associate do the lower-end jobs that need to be done. Yeah, I think that totally makes sense. It definitely makes sense for the lead funnel.

                                                Third point we want to talk about, Joe and I know you’re going to love this one, because you’re looking at me funny right now, but the squeezed like a turnip problem or the cost creep problem.

Joe Magnotti:                    Oh my God, we see this a lot too. So yeah, you bring on a client. You have a process. It’s A, B, C, and then all of a sudden, the client wants to introduce part D, and you don’t change the pricing or you’re not sure what your extra cost is being for adding that extra part to the process.

Justin Cooke:                     Yeah, it’s some problem where expectations grow, or needs grow, like needs to make it work, and they’re on their end just trying to make it work. And they just want you to be a just get-it-done service.

Joe Magnotti:                    And this happens a lot with small companies. So, small companies go to outsourcing because the need to reduce costs, and then they get a hold of that outsourcing. And they just want to squeeze every last bit of blood they can out of that money they’re sending to another firm.

Justin Cooke:                     Not just outsourcing though. Think about design. You’re a designer, and you have a … You design something, whatever, and they are just like, “Ah, I want the red over there,” or “Could we do it in blue?” And they want a ton of revisions, and even though, you said originally only two, they’re going to keep trying to squeeze more of your time out.

                                                So, one of the ways that we found to deal with this, especially on the outsourcing side, it’s pretty straightforward. Outsource it. When you take on a new client, whatever, and you’re doing, let’s say … You’re a new business, a new client, and you’re doing a lot of the work yourself. Your earnings per hour are low, because you’re spending a lot of your own time. But it’s still reasonable. What you can do, again, is start passing this after sales work, the ongoing work. You can start chunking it out to people where their time is less than yours. So, if you expect 50 bucks an hour, you can start passing this on to some earlier newer designers that are happy to work for  15, 20 bucks an hour.

Joe Magnotti:                    Yeah, to go back to the design issue that’s exactly what I was thinking, the designer/the head designer. You’re the head designer. You come up with the concept and the original artwork, and then revisions are done by your staff. Whether that staff is outsourced or in-house, I don’t care, but it’s at a lower per hour. And it’s something that you don’t need to deal with.

Justin Cooke:                     And you know, I don’t think … Real businesses aren’t going to care. They don’t care, because they just want it done. And they want it done right. They don’t care if it’s you doing it or someone else doing it. What they don’t want is some shit product at the end or some shit delivery. They want it done well, and they want it done right. But they don’t care that … Who’s spending the hours or how it gets done. They just want it done. So, outsourcing pieces of it or chunks of it is absolutely fantastic. In fact, it’s ingenuity which they would probably appreciate, as they’re business owners themselves.

                                                The other thing you can do is to automate some of it, and you can use SaaS apps or something like this. But basically, to take out some of the repetitive or rote pieces of the process and to really try to automate that, rather than just doing it yourself manually.

Joe Magnotti:                    Yeah, from a design standpoint, I’m thinking of something like Optimizely. So, let’s say you make a website, and they say, “Well, I want to have … I want to test a blue button versus a red button,” and you say “Look well, we have this great service called Optimizely.” And you show them how they can make the changes themselves, and you automate that piece for them. So, they can make small little revisions and test those [crosstalk 00:16:34].`

Justin Cooke:                     Well, you still do it for ’em, but you’re using a SaaS-

Joe Magnotti:                    Even better.

Justin Cooke:                     That will make it much easier, and you’re still running it. You take that headache away from them, but you’re making it a lot easier. And you’re not adding all this extra additional work to yourself or whatever. So, you’re not getting squeezed as much.

                                                Our fourth point, we want to talk about happy hour being canceled. Meetings and deadlines. This is particularly important with client work. They’re going to want to meet.  They’re going to want to get on the phone, see how things are going. They’re going to want to have meetings. You going to have deadlines for delivery. I need to have it by this date and that can … For me, I don’t like meetings, and I don’t like deadlines. I don’t like having a set okay we have to do it this time, we have to do at that time. It’s not great for me, and so I can see that can be bothersome. I feel a lot better about it though, when I know exactly what the expectations on delivery is.

Joe Magnotti:                    Yeah, so beat you up a little bit on this, and say, I think deadlines do a very good thing … Is that all of a sudden, they squeeze down in the amount of time that a normal task would take. Maybe, normally, it would take you 15 hours. Suddenly, it takes nine hours, because you knew you had a deadline of 10 hour. But as long as that’s reasonable and clear expectation up front, and it’s something that you know you can agree with, I think that could be a good thing.

Justin Cooke:                     Alyssa, our editor, here at Empire Flippers on our posts and some of our guest posts on Flippa. I saw her put something up funny, that was pretty funny, recently. Where it talks about deadlines and all this work that kinda take your time, procrastinate all the way to the very end right before the deadline, and then work your ass off to try to get it done right before. That’s definitely my process.

                                                That’s something we do for the podcast too. We generally record the podcast right before they’re due. We don’t have a ton in a can. We put a few in the can sometimes on the body, but normally, we’re doing it right before.

                                                Another thing you can do is have defined hours of operations. So, these are the hours that I’m available for meetings. I forget, there’s a bunch of different tools you can use to do this. Where basically, it sends out a time and basically, it has a block of time for you to use. And your clients can then pick the times from there that they’d like to meet with you. There’s a ton of tools that do that. They automatically add it to Google Calendar or Outlook Calendar or whatever.

Joe Magnotti:                    Man, you and I are the worst at this. Maybe, we should start having our own hours of operation. The Joe and Justin hours of operation, because yeah, it seems like work can definitely start to expand into a 10-hour day, and then a 12-hour day. And then all of a sudden, it’s pretty much all day. Especially in the electronic world that we live in, you don’t even realize it’s work anymore. It just seems like you’re keeping up, and-

Justin Cooke:                     Or not.

Joe Magnotti:                    Or not or falling behind, right? And so, I think having a clearly defined hours of operation at least in so far as communicating with your customers, and that your customers understand, here’s a reasonable timeframe for me. It’s going to take 48 hours to get back to your request. I only work Monday through Friday, and so, if they get something on the weekend or they get something back before that, hey, that’s a bonus. But at least you set expectations to be right.

Justin Cooke:                     I think all of this is kind of wrapped up under the making sure that you’re not over promising or making sure the expectations are clear. So, when you’re bringing on a new client, the sales cycle, you bring on a new client, it’s easy to say, to overpromise and say, “Oh, we’re going to meet this time. We’re going to do all this. We’re going to do this for you.” You have to resist that urge on the front end, because the pain’s coming on the back.

Joe Magnotti:                    That’s a real rookie mistake, right? To do that total over promising just to make the sale only to have to deliver on those over promises and realized that it costs you more than you made.

Justin Cooke:                     We’ve done that. I think everyone’s done that, but it is a really painful one to deal with. Because you’re like, Aw man, now you have to deliver and either you don’t or the client is unhappy, and it can cause real problems.

Joe Magnotti:                    So that’s why be clear up front, and if they don’t take the deal, at least you knew that wasn’t a good client.

Justin Cooke:                     So our fifth point is the pimp my ride problem or the West Coast customs problem. With a service-based business, a lot of times they want custom work. You just … a lot of it just happens to be custom, especially if you don’t have a process for productizing that.

Joe Magnotti:                    And why is that expensive?

Justin Cooke:                     Well, it’s expensive, because you have to learn every single time, all these different … you have to try to put it all together, and you don’t have a background or model to work off, because every single time it’s custom.

Joe Magnotti:                    Yeah, and then you have to sit there and train your crew to do it. Maybe, you have to learn new tools, new UI. You have to work with new people. You have to figure them out, new clients, and then to go back to point number one, if they only stay with you for two months. Now you have a client retention problem, plus this extended learning implementation phase-

Justin Cooke:                     You lost money. Oh, that sucks man. I know, I know, it’s really frustrating. So, our answer to this is pretty straightforward, but it’s productized services. So, let’s talk a little bit about what this looks like in other industries, right. So, you have builder, the real estate building industry, and if you go to any suburbian home in California or other states, as well, you’ll see that they have six or whatever, six different types of homes, six different models. But what they do is they have all this work on the outside of the home that makes it look much more personalized. It makes it when you drive down the street the homes look different. The way they do that is just … The people that are building it have a blueprint to follow, and it’s the same. There are six models that they follow. What they do instead is they put stucco on the outside, or they put rocks or bricks to make it look different, different colors, slightly different facades on the outside that makes the homes look personalized. And, you can do the same thing with a service-based business.

Joe Magnotti:                    Yeah, I think … I love this analogy, and you were talking a little bit about it before the show. And it reminds me of a factory. A really good factory can do customization, but they don’t do it until the end. Everything, until the very last step, is the same, because that makes the production process very, very cheap. But then the little tiny details which make each thing look customized and makes the customer very happy with the product they get delivered, that’s customizable.

Justin Cooke:                     I think this is an important one, because there’s a value in having the clients feel like it’s personalized, and it’s customize. You don’t want to lose that value, because I don’t want to go in and buy something that is just standardized. I want something that’s personal and is done for me. I want that feeling of being done for me, and the best way to do that, I agree, is through personalization not through customization.

Joe Magnotti:                    So, getting back to the information technology field, you were talking about a book before the show.

Justin Cooke:                     Yeah, yeah, yeah, so, this is a great, great read. If you haven’t read it, buddy, you absolutely should, but it’s called Built to Sell. I forget the author, but basically, it takes a guy that’s in an agency, a marketing agency, and all his work’s custom. It’s always custom, and he’s … they’re making money, but he is just overworked by his clients. They are putting him through the ringer.

                                                And he’s working with a guy, who has built a bunch of businesses, very successful business guy. And he explains to him look, here’s how you do a product, and so what the guy does is he ultimately dumps a lot of the customized work he’s doing and focuses specifically on logos. And there’s a set process for delivering these logos, and he just start selling the shit out of logos. And because it’s a very … It’s a process they can knock out and do over and over again he becomes very successful. You have to read the book, but it’s a great way. It really explains how to take services and put them into products.

                                                Someone who’s been great at this is James Schramko, if you look at some of the products that he delivers, and I use him as a model for some of our productized services as well. Because I think that it’s a great way to improve your margins and really deliver for clients.

Joe Magnotti:                    Yeah, and match the skills that you have internally, right. I think that’s one of the problems that we were having with our outsourcing services was everybody would call us up, get on the phone with us, email us and say, “I want you to do SEO for me.” Well, what does SEO mean for you? Well, for me it means this and this, and then another guy says it means that, that and that, right? Well, we know internally what it means for us. So, why not offer that exact product and service, and you have a great idea what that costs. You have a great idea what the delivery is in that, and you can put that out as a good service to your people.

Justin Cooke:                     Yeah, well, James does this with this SEO business. So, it’s basically productized SEO. It says you can get this for this monthly package. You can get that for that monthly package, and I think it’s just a much better way of going about that.

                                                Our sixth point and our last point is that if you’re a consultancy, you’re generally doing work for someone else that’s making someone else rich. You’re making the money. They’re basically using your skills or the services that you’re providing them, and they’re making money off of you. And so, let’s talk about the problem with that, Joe.

Joe Magnotti:                    The problem? Well, isn’t that the point?

Justin Cooke:                     Yeah, yeah, that’s not a problem. There’s no problem with that. That’s actually the point, you’re supposed to be making them more money. You’re supposed to be helping them where they are getting more value out of you then they’re paying. And so, it’s a mindset shift to really get to this point, I think, where you realize that the referrals you get from this, the empire of connections that you build, by delivering more value for your clients then you’re costing them, is fantastic.

                                                So, I don’t think that such a problem, in fact, that’s something that we want to do. When we get iTunes reviews that talk about, “Oh, I started making so much money,” we don’t sit around going, “Oh my God, why do we make them money? Why didn’t we find a way for them to make us money?” I don’t care about that I’m happy to deliver value for them, because they’re then telling friends. They’re tweeting us. They’re mentioning us to other people.

Joe Magnotti:                    Yeah, we always talk about these win-win situations, and I think, that’s what this point comes back to. Look, it can’t just be all one-sided. You can’t just be the only one making money in the situation, when you run this kind of consultancy, service-based business. You have to be able to provide a win to your customers, in order for them to stay with you long term and to refer them to other customers which is going to therefore reduce the sales cycle on gaining new customers, right? So, in order to do that you have to provide value.

Justin Cooke:                     That’s why I think … especially a marketing agency or whatever but a lot to content marketing, whatever it is, if you’re trying to help that business either, let’s say A, either make more money or B, save money, you have to have a plan to show how that’s working due to your efforts. So, your efforts have to be making them more money than you’re costing them. The amount of money you’re saving them has to save the more money than you’re costing, and there has to be some direct correlation. And it’s your job as the provider to determine that from the onset or to put things in place to track that and be able to show that to them. That’s your job there, I think.

Joe Magnotti:                    Agreed.

Justin Cooke:                     Alright, well, let’s get right into our tips, tricks and our plans for the future.

Speaker 1:                           You’re listening to the Empire Flippers podcast with Justin and Joe.

Justin Cooke:                     So, our first tip comes from the guys and gals over at Flippa.com. I’ve been noticing they just change the way that they do their guest posting and their content management for guest posts, and it’s fantastic. So, they’re using Trello.com. It’s basically a task management system, but the cool thing about it is you fill out a card. And they have like five or six different buckets. You put it in on the left side. It starts with idea, content idea and then writing and progress, and then ready to be reviewed, ready to publish and then published. And so, they got a bunch of different guest authors in there filling out these cards and just dragging and dropping them to the right place, uploading the content when it’s ready to go, and it’s being reviewed. It’s a really fantastic system. If you have a content publishing schedule that you need to keep, especially if you have multiple authors, I’d really suggest checking out Trello.com. It’s fantastic for this.

Joe Magnotti:                    Yeah, sounds like it’s more process-oriented than Asana. So, Asana is great for task management and maybe more the development side of things, but I could see how … And I haven’t used Trello, but I could see how were something’s more process-oriented, especially around content. And there’s many little sub steps that could get quite annoying, and in Asana, you can do it, but you have to create subtasks. And everything has to be mapped out. This might be a lot easier.

Justin Cooke:                     Yeah, it’s great for tasks that are collaborative that have a process they need to go through and different buckets you need to put them in. So yeah, I’m really digging it. I think Ophelia over there has got a great process lined up, and it seems to be working out really well.

                                                Second point I want to mention is there is a podcast where I just absolutely beat up our friend, Damian Thompson. So, it’s over at Linchpin.net. It’s his first release of the new podcast the Linchpin podcast, and I want to talk with him. It’s his podcasts, but I actually end up interviewing him for the podcasts and beat them up a little bit about his new business idea. And so, what he wants to do is become the Ontraport guy. He wants to be the guy you refer when you know anyone that works with Office Autopilot or Ontraport. He wants to be the guy to help them set up their system, put everything in place, and I think it’s an interesting niche, especially if you’re going to be a service provider. It’s tough when you’re, well this guy that does some marketing, and then he can help you with kind of content strategy, and he’s the … I’m never going to refer someone, if I have to … if I can’t even explain it simply what they do. Do you know what I mean?

Joe Magnotti:                    Yeah, but it’s really funny that you’re on his first episode beating him up, huh?

Justin Cooke:                     It’s fun dude. I beat him up. I dig into him a little bit. It’s a really good episode though, and we’ll definitely link to it in the show notes. It’s worth checking out if you’re in a service-based business, I think you can get some value out of it.

                                                 Well, that’s it for episode 60 of the Empire Flippers podcast. Thanks for being with us. Got a great episode lined up next week, and we’ll see you next time.

Joe Magnotti:                    Bye-bye everybody.

Speaker 1:                           You’ve been listening to the Empire Flippers podcast with Justin and Joe. Be sure to hit up EmpireFlippers.com for more, that’s EmpireFlippers.com. Thanks for listening.

 


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  1. Interesting episode. You have a very valid point about structuring your hours to suit, IE. we’re available for meetings between 9 – 11. I’m in a service based industry now, with standard 9 – 5 work ours, supplying materials handling services to a wide range of industries, that work all sorts of hours. If we have to supple a out of hour service, ie. Breakdown repairs, – Charge for it. We charge a minimum 4 hours, so it might be $400… Once you explain that to a client, they usually are happy to wait, until normal working hours to save themselves a few dollars.

    Its these times, you need to be able to structure your business, to be able to handle most client demands. because that’s what your opposition will do. but you nee to be smart and charge accordingly for it. Giving things away for free is a great way to go broke…

  2. sebi 20 says:

    You guys loosing energy by the time. I need more energy on the new podcast please !!
    I saw you are more motivated to speak about niche websites and outsorcing in general and that is ok :)
    also…good podcast. thank you !

    • Justin Cooke says:

      Hey man,

      Yeah, a little less energetic on this one, eh? I had a bit of a cold and neither of us were 100%, I think…but the content still came out ok. (I hope)

      A friend mentioned to me the other day that, although he really liked this episode, it’s probably not as helpful/useful to our core audience. I’ll keep that in mind for our future episode topics, I think. It’s useful for contractors and service-based entrepreneurs, but that’s not our “main” audience, hehe…

  3. Really enjoyed this episode. Nothing bonds like lamenting about bad clients :)
    I think the customization problem is the biggest by far and I would love to hear a whole episode about dealing with it – how to tell clients “no” or “that’s too much work” or “would you just shut up and accept the design?”. From where I stand it seems like webdev clients think of themselves as patrons of art, assuming their websites will get to museums somewhere in the future, while not having a clue about what’s efficient, good in user experience (UX) terms or suitable for the Internet. How would you tell them “it’s not your bathroom or kitchen to decorate. leave it to us and make peace with standard solutions and designs that work best”?

    • Justin Cooke says:

      Thanks, Chris!

      I definitely hear this argument from designers and UX guys all the time – it’s a difficult/touchy situation to have to both deliver on the clients needs AND make sure that you’re following best practices, delivering something that will WORK, etc. Sometimes the client’s design changes are not congruent with their long-term goals and it can definitely be challenging to point that out in a way that keeps everything working, heh.

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