Mike Zipursky: Hey, it’s Michael Zipursky from Consulting Success and today’s consulting interview is with Tim Grahl.
Tim’s a consultant, author of Your First 1000 Copies, coach and owner of Out:think where his company helps authors launch their books and manage their brands online. His clients include Dan Pink, Charles Duhigg, Pamela Slim and many others.
Tim is a guy on a mission and I’m looking forward to our call. So Tim, a massive welcome to you.
Tim Grahl: Thank you! Thanks for having me. I’ve been looking forward to it.
Mike Zipursky: So Tim, before you started Out:think, you were running a web marketing company that wasn’t really doing that well. What’s the background on that?
Tim Grahl: I kind of come into it to two different ways. I was a programmer by trade and by schooling so I was doing a lot of web development, and then I was also running my own blog network and so that kind of got me started in the marketing world because I had to get people to pay attention to what I was doing in order to make it successful.
After I sold off the blog network, I was starting to just do web development and marketing for kind of anyone that would hire me. And so that’s how I got started and just started kind of picking up clients here and there.
Mike Zipursky: Right. And when we were talking, you mentioned that that business, it wasn’t prospering and really moving forward in the way that you would have liked. Why do you think that you weren’t seeing the level of success that you kind of set out to in that business?
Tim Grahl: Looking back, the biggest thing that was causing me trouble is I didn’t have any one area of expertise and this kind of hurt me in several ways.
One is it’s hard to refer somebody when they kind of do all kinds of stuff. It’s not very clear. I couldn’t tell people I’m looking for this exact type company or this exact type person to work with. And then the other side is I wasn’t able to become an expert on anything. When you’re jumping from random project to random project to random project, you’re constantly having to learn something new from scratch. You’re not becoming really good at anything. And so each job is this really hard overhead of stuff to learn, and get up to speed and mistakes you don’t even know you’re making.
And so I think both those together, I wasn’t easy to refer so I wasn’t getting as many clients. And then the clients I was getting was such a random smattering of jobs that I wasn’t able to get really good at helping any one person or any one type of company.
Mike Zipursky: Right. That makes perfect sense.
Thinking back to that time when you decide to launch that business, did that idea of specializing ever cross your mind? And if you did consider it, why did you initially not go down that road?
Tim Grahl: When I started, one of my clients is Pam Slim and she likes to say ‘Hating your current job is not a good business plan.’ I wish I had heard that advice back then because basically, I hated my job so I quit my job and started doing my own thing.
I didn’t really plan like I should’ve and I didn’t really have any kind of business training either. All of my classes at university was basically math and computer programming classes so I didn’t have any kind of marketing classes or any classes on how to run a business or make any good decisions and I didn’t really know many people that was doing it. So I was making all of these types of mistakes.
It never really crossed my mind that that was even a question. To me, if your business, you’ll take any client that comes through the door. That’s what I was thinking. It wasn’t really anything that crossed my mind because I didn’t even know it was a question I should be asking.
Mike Zipursky: Okay. That makes sense. A lot of consultants when they’re first getting started, the biggest kind of fear factor that they have around choosing a specialization is that they’re going to be shutting the doors to all those potential business that they could otherwise receive if they were more generalized. Time and again, I’ve seen it with accountants, consultants and in my own business that specialization is really the key.
Around December 2010, you decided to start working with authors and to develop your specialization in that area. Why did you choose specifically to focus on authors?
Tim Grahl: And to your point – and I’ll answer this question, but I want to mention one other thing is it’s hard to choose especially when you’re starting out because you don’t really know what you want to do or what you’re good at.
When I started looking at my own business and I was working with a business coach at the time that was helping me think through some of this stuff – because again, I didn’t even know these were questions I should be asking – some of the things we were looking at was like ‘What kind of contacts do I already have?’ If you already have contacts in the industry or have a few clients that are similar, that may be a place that you can niche because you’ve proven that there’s people that are willing to give you money for what you do because you have clients. You now have a few people that can refer you.
What I tried to look at was both where do I think I can make money because I’m not in business just to ‘follow my passion’ or whatever. I’m in business to make money. Where do I think I could make money? But also, where do I think I would enjoy my work? And it’s a balance of both.
Looking at my current client base, I had three different clients that were authors. I had really enjoyed the work, and was actually looking for more clients like them because I enjoyed it so much and so that really helped a bit make the decision easier to just focus on that niche.
But I think early on if you’re just getting started, it is kind of a path you have to take. Just take all kinds of different work because that’s how you’re going to figure out if you like it is actually getting the job and there are so many jobs where I would get the job and then halfway through them like “Oh, I hate this job.” And I would like finish it and say “I’m never doing that again.” And that’s fine. That’s part of the process.
But at some point, once you’ve done enough, you should be able to start getting a hand on like ‘This is where I should focus. This is where I can really help people and I can start telling people these are the type of people I’m looking for.’ And for me it’s really easy. If you’re an author, or you’re writing your first book, or you need help in that space, I’m a good fit. If you’re not, I’m not a good fit.
Mike Zipursky: Right. So when you were kind of considering those directions, you said one part of it was to do with where you enjoy what type of projects and clients that you really enjoy working with. And so around that time you had worked with three authors, and so you have those experiences and thought that you’d like to have more of them. But the other side too, you said, that there’s also the business side; the financial and monies component as well.
Were you very aware at that time that working with authors could be lucrative for your business or was it really more the enjoyment, and your kind of level of comfort and just kind of passion for those types of projects and clients that pushed you into that direction?
Tim Grahl: It’s a little of both and it’s an educated guess. So if I had never worked with any authors, I don’t think it would have been good for me to say ‘You know what? Authors seem cool. I’m going to do that.’ and just throw everything else away.
If you have an idea of something, this idea that entrepreneurship or starting your own business is like this huge risky thing, it’s like for most people I know, it’s not. It’s a series of small risks that if they fail, it’s not that big of a deal.
When I decided to switch my business to working with authors exclusively, I didn’t call every client that wasn’t an author and say “You know what? We’re done.” I kept that other work and phased it out over time. And I also waited until I had enough clients that were paying me well that proved that there was a market. I didn’t just decide to work with authors out of the blue. It was from after working with a few.
That’s where like if you have something that you think you’d be interested in doing, go out, try to get some work in that area, pick up a few clients. You might find that it’s lucrative but you hate it and so don’t do that. Or you might find that you really enjoy it but there just doesn’t seem to be enough money there, and you can tweak it and try again.
I do very, very little like all-or-nothing decisions. It’s very calculated guesses. And even if after I change my website and said “I only work with authors.” 6 months later if everything was taking, I could just change my website again and say I do something else. There’s so few decisions in your business that are completely irreversible. It’s these series of calculated small risks that have potential of small rewards, and you stack those up over time and you’ll get a great reward.
Mike Zipursky: Right. I like how you said that.
Tim, one thing I want to kind of pick up on here is that you mentioned that during this process, you were working with a business coach. And I’m interested to hear from you why were you working with a business coach and what were you getting out of that arrangement?
Tim Grahl: At the time, Josh Kaufman who wrote ‘Personal MBA’ and ‘The First 20 Hours’ he was doing business coaching and I had met him at a party I was at in New York. He was a friend of mine and I was basically reaching this point where my business was driving me nuts. We had all these clients, wasn’t making enough money, all the stuff we kind of talked about at the first of the call. And so I reached out to him and just said “Hey, what is this business consulting coaching thing? Do you think it would help?”
What I find is that the best way to learn anything is to find somebody who’s already done it or is doing it, and come alongside them and learn from them. And it can look a hundred different ways. I have kids so I’ve sought out guys that look like they’re really good fathers, and they have grown sons that are well-adjusted and good people, and I go to them and I say “How did you do this?” so I can learn how to be a better father? And I think it works like that in business; is finding somebody or multiple people that you can come alongside and learn from. It can be mentors. And in my case, I knew if I was paying money, if I was actually paying money every month for advice, I was going to take it because I didn’t want to waste that money. I was already low on money.
It also meant that like at any time, I could call him, email him, we talked every week. I wanted something that was very structured because sometimes, mentor relationships, they kind of – there’s nothing like in place. You start meeting for coffee every other week, and then before you know it, it’s 3 months and there’s really nothing structured. So I wanted something structured where I could come alongside somebody who I felt like knew what they’re talking about, and get some advice, and keep me accountable to actually put that advice into practice.
So that’s what I did and that’s why I went after having a business coach.
Mike Zipursky: That’s good to know.
Let’s now kind of – for everyone listening – kind of clear up here and just provide a little more detail to where you’re at at this stage. So you’ve decided that you’re going to make the switch to focusing more on working with authors and to build up kind of your authority and specialization in that area. You mentioned that you changed your website. What else did you need to do in order to make that switch? I mean, was it a very big process?
Because we have all kinds of consultants listening to this call and some are getting started. Others have been consultants for 5, 10 or more years. And for people that are wondering ‘I have a client base already. Maybe I want to work with another type of client and change my area of focus (for whatever reason), but I’ve made so many investments into where I am already.’
What would people need to do and what did you do in order to make that switch?
Tim Grahl: I want to say first that if I can do what I’ve done in the publishing world, you can definitely make a switch into a new market. I worked with one author, and then I picked up two other authors as clients and when I decided to move my business 100% into this industry, I knew nobody else. I didn’t know anybody in publishing. I knew no editors. I didn’t know any agents. I didn’t know anybody.
And so I came in completely cold to what is well-known as a kind of a ‘good old boy network’ like people in publishing love to work with people that have been in publishing. And so what I did is just went on basically a networking blitz where I was already attending a conference called ‘South by Southwest’ down in Austin, Texas in March, and I already had a ticket and I was planning on going. So before I went, I did tons and tons of research about who was going and I basically stalked anybody in the publishing industry whether it was authors, editors, agents and I would set up coffee meetings, and I set up meetings after workshops and I just met as many of them…
Mike Zipursky: When you said that you stalked people, what do you mean? Were you just walking up to anyone? Did you have a list that you created of people that you wanted to meet or would you just kind of walk around and asking people ‘What do you do?’ and if someone says they’re in the publishing industry then you would pretty much make sure that you had their attention? Specifically, what did you do at that time?
Tim Grahl: I actually developed a very step-by-step process for taking advantage of live events to get business. The first thing I did was I researched who was going to be at the conference and I do that in a couple of different ways. The first is I just look at who’s speaking because a lot of times, those are people that would be good clients for me – at least good contacts. I look at who’s speaking.
Then I look at some conferences are doing more and more of like creating a social network around their conference. And so I was able to go in and look up people that had listed their occupation as editor or I just searched publishers. I basically looked at everybody that I could find going to the conference, searched social media. And then I also emailed the event organizers – anybody that I could find contact information for – told them that I was looking to talk to people in publishing and asked for recommendations on who was coming that I should speak to.
And then ahead of time – I started this about a month before – I started emailing everybody that was in publishing that was going to be at the conference and tried to set up meetings with them. And I would set up meetings first thing in the morning, 7 o’clock in the morning for coffee all the way until drinks at 11 o’clock at night and everything in between. And I tried to set up as many meetings as I possibly could so when my plane hit the runway in Austin, I already had a pretty full roster of people to meet with.
And then I also keep a hit list of 10 or 12 people that I wasn’t able to connect with beforehand that I’d really like to meet. I actually look for their pictures online so I’d recognize them. I’ve even like been walking down like the hall at the conference, and seen somebody and I’ll just stop them and introduce myself. Because I know if I can meet somebody in person even for 5 minutes, it makes the follow up after the conference so much easier because you have that personal connection.
And then outside of live events, I also would just email people. I’d email agents and just say ‘Hey, this is the type of work I’m interested in doing. I’m wondering if I could talk to you for 10 minutes just to get your advice on what I should do.’ And I would just try to talk to anybody that would talk to me and share what I was doing. That would lead to other things. So then I would take anybody I met, and any clients and just ask them for other people I should talk to, other people they think would be interested in working with me.
A lot of times I think with all of the social networking and online marketing tools, we kind of blind ourselves from the fact that just straight guerilla networking works the absolute best; getting in front of people, getting people on the phone, talking to anybody for a long, long time. Any author that wanted to talk to me, I give them an hour of my time even if they couldn’t hire me because I knew that they would know other authors down the road that they would then pass my name along.
Mike Zipursky: So you were really hustling at this time. I mean, it sounds like – did you change your website already? Did you have new business cards or brochures? Do you have any materials like that that you had kind of switched to update focusing on your new specialization? Or were you doing all those networking before you had even updated those materials?
Tim Grahl: Yeah, like I update the website and then I order new business cards for the live event.
But, you know, I live in Lynchburg, Virginia – I don’t have a single client probably within 100 miles of me. The closest one is D.C. I don’t need brochures. I don’t have letterhead. I don’t have shirts with my logo on it. Most of the time, I even forget to bring business cards along.
I found just talking to as many people in the field, in the industry that you want to be in and just getting to know them and sharing the way that you’re trying to help people, you stack that up over time – so I’ve only been in this industry for 3 ½ years. I have some of the biggest name clients. I don’t think anybody is really even close to my roster of clients and I haven’t had a prospect for work in over a year and a half. It just __[19:42]. And I really think it was because for that first two years, I just would talk to anybody, and tried to get everybody on the phone, and would show up in person at events that I thought would be good for me to meet people and I’m there like hawking my wares and saying “Hey, you got to hire me. Hey, you got to hire me.” It was just getting to know people, and of course, they’re going ask what you do so you can share what you do, and share the different things you do and sure enough, people are going to say “I know so and so. I should pass along your name.” And then I’d get on the phone with them, and talk to them, and ask them “Is there anybody else you think I should talk to?”
Mike Zipursky: What’s interesting with what you’re saying here, Tim, is that a lot of people when they’re starting their businesses, they spend that first year and sometimes even longer just getting things ready. Like you’re saying, you really didn’t have a brochure. You didn’t worry too much about any other types of materials, and fancy promotional items and all that kind of stuff.
A lot of people spend so much time building their materials and they don’t get out of the building. They don’t do what you did where they’re constantly just going after networking with people, hustling just to be known and to make connections with their ideal clients. It sounds like that was kind of the main focus of what you were doing. You update your website, but aside from that, you just have feet-to-the-floor and were out there meeting as many people, connecting with as many people to build up.
I think the other thing that’s important about what you’re saying, too, is that if you would have just done all that hustling, but if you were just kind of a typical marketing guy or just running a typical web consulting business, you probably wouldn’t have received the same level of interest or attention that you did because of the specialization that you chose and your real focus on meeting and connecting with your ideal clients, right?
Tim Grahl: Yeah. Let me address both of those things. So the first is, yeah, it makes it really easy to refer – anybody I talk to I say “I only work with authors. If you know any authors, you should have them talk to me.” So that really makes it easy for people in their mind to say ‘Do I know any authors?’ and it makes you so much easier to refer. So yeah, absolutely, like we talked about the niche-ing.
The other thing that I constantly think about as far as like basically putting off the real work – coming out with brochures or messaging’s perfect. There are times where that’s important, but for 99.9% of us, it’s not that important. I constantly am changing my tagline of what I do because I feel like it could be a little bit better, but nobody really cares.
I am constantly looking at what is the shortest path between me and money? How can I – especially, I have a wife, I have two kids, I have employees – if I’m in a position where I really need money coming in like now, the quickest way to do that is just going out, and meeting people and telling them how you can help them. Again, I’ve never had a brochure. The only printed thing I’ve ever carried around is a business card, and like I said, I usually forget to even bring those along.
Mike Zipursky: Yeah. It’s great message.
Tim Grahl: And really just meeting people, letting them get to know you, shaking their hand, giving of your time, helping them any way you can – like I said, I’d talk to anybody for an hour and I would tell them everything. If they ask any questions, I basically try to help them as much as I could in that hour knowing that if I do that, they’re going to like me because I’ve gone out of my way to help them. They’re going to see me as the expert because I’ve shared everything that I know how to do. And so when it comes time for them to hire somebody, I’m going to be the one they hire. And if they can’t hire me when it comes time when their friend says “Hey, who should I talk to about author marketing?” my name’s the first one that’s going to come up.
And at this point, I can’t remember the last time I bid against anybody else on a job. Like, people come to me and I’m the one they want to hire. Yeah, niche and then just meet as many people. And yes, a website’s important. You should have a website.
Before, when I was doing it just on my own, it was just doing web development for anybody that would hire me. I didn’t even have a website for a year and a half. It was just all doing this kind of stuff; just meeting as many people as possible.
Mike Zipursky: So Tim, let’s kind of get into today’s action byte because you use a strategy that I generally recommend that consultants don’t do which is working for free. But you took a bit of a different approach to this; one that I would say is very targeted and that helped you get more and more clients. Can you tell us a little bit more about what you did and how you made that work?
Tim Grahl: Yeah, I’m going to walk you through exactly how I did it. The basis of this is actually from a short e-book that a buddy of mine, Charlie Hoehn, put out a few years ago called ‘The Recession-proof Graduate’. And he basically wrote it for kids that are getting out of college, and can’t find work, and this is how to kind of build your resume and get work. But I started using this when I was 28 and 3 years into my business or whatever.
The idea is that you look for your ideal clients, so in my case, it was authors. I looked for authors and then I do free work for them to get my foot in the door. Now, the important thing here is that you don’t just email somebody and say ‘Hey, if you need anything done, let me know.’ because the important thing is that you show your expertise and how you can help them.
So I would email clients and I would say ‘Hey, I really like what you’re doing. I think your work’s really interesting. I was looking over your website and I found these three things that I feel like are holding you back that I could fix.’ And I would just list them out and I would say something like ‘Your speaking page isn’t doing a good job converting people to connect with you. I could fix that. I can redesign your site and it’ll increase your speaking engagements.’ And then say something like ‘You don’t have an email newsletter. Here’s how an email newsletter will help you sell more books. I can get that set up for you.’
So it was identifying problems, showing them how those problems were hurting them and then letting them know I could fix it. And I would shoot for myself, I would basically pitch to do about 5 to 15 hours worth of work. I didn’t want something that was going to be a whole week’s worth of work. I wanted something I could get in, and make a difference and get out. And then at the end of the email I said ‘I’m going to do this completely free. No strings attached. The only thing I ask is that when we’re done working together, you’ll at least look at a proposal of continuing to do work together.’
What this does all kinds of stuff. It shows that you’re an expert. It shows you know what you’re talking about because you were able to point out specific things that are wrong and how you can fix them. I got huge response to these emails. Not everybody would respond, but I would say over 90% of people would respond and then most of them would let me do it. A lot of them ended up hiring me to continue to work for them.
Mike Zipursky: What percent of people do you think you’d say are the ones that you actually did the free work for became paying clients at one point or another?
Tim Grahl: About 2/3
Mike Zipursky: About 2/3, okay
Tim Grahl: Going back over that lower track because I’m much more data-driven than I was then, but at that point, I just wanted people to hire me. So I was doing it as much as I possibly could.
But once you’ve worked with somebody, you show that you’re responsive. You show that when you say you do something, you’re going to do it. When you show some follow-through, who else are they going to hire?
But even the couple of people that didn’t end up hiring me, several of them actually referred me so it does all kinds of stuff. So first of all, it gets you a client base that you can put on your website, and you can tell other people ‘Look at these people I’ve worked for.’ Nobody has to know that you didn’t get paid. You did work for them. They were a client. And so you were able to list these people as clients. And then, of course, it turns in the work in a large majority of cases and even the handful of people that maybe don’t hire you, they’ll come back later and hire you or, again, I’ve had them refer me other authors to come work for me.
This is how I went from basically a nobody – nobody knew who I was in the publishing world – to getting a very nice roster of clients as I would go to best-selling authors that I knew were already successful, I would pitch them on helping them do a little bit of free work to make what they were doing better and now several of them, still, 3-4 years later are still clients. This is how I got started.
Mike Zipursky: It’s interesting, again, because as I mentioned at the top of this – we started this action byte – that really, generally, I don’t recommend that people do free work unless they’re just getting started but what I like about what you’ve done here, Tim, is that you thought through this and you have a methodical approach to it. You didn’t just say ‘I’m going to do some free work to people that I talk with.’ or ‘If someone asks me can I help them, I don’t just say ‘yes’.’ You actually clearly identify the criteria for your ideal clients, and then engage with them and had a very compelling offer for them. Yes, you had to do some work, but at the end of the day, your ROI on that – if you look at that investment that you made of time and energy as your marketing spend, pretty much, otherwise, maybe you would have used that for something else – the return that you got was very positive, and obviously, it worked extremely well because I know now you’re pretty much booked solid and your business is growing like crazy.
Tim Grahl: Yeah. Again, like I said, it does all kinds of things and it also just puts you in a position where you can flip them into bigger work. That’s what I think helped the most is I was able to now, just a couple of months into doing this, I was able to go out and say “Look, I work for Dan Pink – #1 New York Times Bestseller. I work for Pam Slim. I work for Dan Ariely.” I work for all of these people who are like well-known in the industry and I can go to other authors and say “Hey look, they work with me. You should work with me too.” They want to flip them into other paying clients as well.
And again, asking for referrals and all that. But it works really, really well and I think it can work in almost any kind of industry anywhere. I had a buddy of mine that he’s starting a business for hood cleaning for restaurants; basically, cleaning out the hood over the stoves. They have to be cleaned out every so often or they could be a fire hazard. Very blue collar work, very kind of homegrown stuff and he’s like “I could do this, too. I could go in, offer to do a free hood cleaning to show my work. While I’m there, I can point out a couple other things that I could do while I was there. Fix a couple of problems for them.” he’s like “And I’d bet they’d hire me because not only did I do what I said, but I helped them in some other ways.” I’m like “Exactly!”
Constantly looking for people that you can help and doing it in this very defined way that builds your resume, shows that you’re an expert and it’s going to turn into work down the road.
Mike Zipursky: It’s great.
Let’s switch up for a minute and talk a little bit about pricing because I know that you said that raising your prices is almost always one of the best things that you can do. So I’d like to find out from you, in your opinion, when should people consider raising their prices?
Tim Grahl: Almost always when I talk to somebody, I encourage them to raise their prices because so many people are under-pricing themselves. In this, I’m making an assumption that you know what you’re doing and you’re good at what you do. You can still be young. You can still be new. You can still be learning the ropes. But if you’re a hard worker and you’re good at what you do, you should be constantly playing around with raising your rates.
The way that I think about this is if I’m charging $50 an hour for something – and I don’t necessarily encourage charging hourly for things – but say…$50 an hour for something and I’d double my rates to $100 an hour, if I can get just half the people to pay that rate, I’m going to be making the same amount of money working half as much. And so that’s the first thing I look at; is every time I raise my rates, even if I lose some clients, I’m probably going to be pretty much breakeven and that’s what it’s been for me. Then over time, you’ll fill those people up with new clients. And what I found is I have run into a ceiling before but it’s always much, much higher than I originally thought it was.
And so I encourage to always be playing around, and I still constantly looking at can I charge more? And because it’s behind-the-scenes and you can just play around with it client by client throwing out some higher numbers and seeing what happens. Almost always you’ll be surprised what people will say ‘yes’ to.
There’s been so many times that I’ve thrown out a big number and people will just say “Okay, that sounds good.” and I realized I could have gone even higher.
Mike Zipursky: Yeah, right.
Tim Grahl: Go ahead.
Mike Zipursky: You mentioned at one point that you actually charged too much and it didn’t work then you had to kind of go back to charging a little bit less. So many people have maybe some concerns of if they charge too much and the client says ‘no’ to it. In that situation, what do you do? How do you prepare for a client saying ‘no’ to your new higher price?
Tim Grahl: Again, I take small risks. Say I decide I want to raise my prices. I decide the next 2-3 potential clients that come in I’m going to raise my prices and see if they’ll pay me. If all of them say ‘no’ then I know maybe I went a little bit too high, and I’ll scale it back and the next couple of increase that come in I’ll try again.
I always say I do work for two prices: I do it for full price or I do it for free. I do very, very little work for free but I don’t do discounted work. It never turns out well because if people pay you $1, they’re going to expect you to do your job and they should. You normally charge $1,000 and you give somebody a cut rate of $500, nobody ends up being happy because you feel like ‘Well, I should be able to take my time.’ or ‘If this doesn’t turn out great, they only paid half.’ That’s not how they feel. They feel like they paid you.
If I do pitch a price, say, I pitch $1,000 for something and people say “Oh no, that’s too high.” I say “Okay. That’s fine.” And they don’t hire me. And then the next person maybe I’ll try $900.
But you got to remember, if you normally charge $500, and you wratch it up to $600, and you’ll get 3 out of 4 people that say ‘yes’, and then you wratch it up to $700, and you still get 3 out of 4 people that say ‘yes’ and then you wratch it up to $800 and you get, say, 2 out of 4, and then you wratch it up to $900, and everybody says ‘no’ and you go back to $800, you’ve already added like 60% to your rates.
Mike Zipursky: You’re the math guy, so I’ll let you figure out exactly what that was.
Tim Grahl: I think that’s 60%. So all of a sudden now, you’re making 60% more than you were. Yes, you lost a couple clients at that $900 rate but now, every client that comes in, you’re at that $800 rate, you’ve added $300 per whenever to that client.
When I even look at a project, I’m starting at $7,500. You start adding at a thousand dollars to that and play around with that price and then play around with $9,500. What you find is that you’ll find where people are willing to pay and then you look, and all of a sudden, you’re making 50% more. It makes a really big difference long term.
Trust me, I was in the position where I wasn’t getting enough work. And that’s kind of like the person that almost starved to death once and now, even though they have plenty of money and they have plenty of food, they still kind of hoard food in their closet. I feel like that sometimes. So whenever a potential client does say ‘no’ because I’m too expensive, I start to freak out. But what I remember is more clients are coming in behind them and if I could keep my prices higher, and higher and higher, I don’t have to…this hard down the road. And sure some people are going to say ‘yes’ or ‘no’ here and there, but again, these are small mistakes, these are small risks that down the road will stack up to if I had stopped with my original pricing because I was afraid to play around with it, I’d still be charging $1,500 to do a project. I would be out of business because I can’t run a business on those kind of margins.
I’m always playing around with stuff, and always testing new ideas and seeing if I could run things more efficiently, make more money, charge more, get more clients, get less clients, constantly looking and I think that we should just be in a constant mode of experimenting and being willing to try anything. And down the road you’ll look at all of these great decisions you’ve made that have added up and anything that doesn’t work, you just say “That doesn’t work. That’s some experiment that failed. Let me try something new.”
Mike Zipursky: Yup. Great lesson, Tim. Let’s end on that note. I just want to thank you again so much for making the time, and sharing your experiences, and some of your strategies and approaches that you’ve used to build your business. And I know everyone listening to this, I mean there’s so much that I think all of us can take away from this, and think about and many people will be able to apply some of these lessons right away. Again, a big thank you to you.
Tim Grahl: Sure! It was fun and thanks for having me.