074: Tim Conley on scaling a consulting practice
Tim Conley is a business coach, was the host of the Foolish Adventure podcast, and is a high-level consultant, helping B2B entrepreneurs, agencies and consultants (from $0.5 - 5M) scale their businesses.
In the first half of this episode, we discuss the businesses Tim works with, which range from $500K - 5M, and what it takes for them to grow and level up.
In the second part, we discuss Tim's business model, which is quite similar to my own business, Outbound Creative, doing high-level consulting and selling group training programs. Find out how to scale your own solo consulting practice, making upwards of $200-500K a year, while only working 9 months a year and having incredible freedom while you work.
Highlights:
[4:30] Tim is ADD and works all over his house, moving around with his phone and laptop.
[7:45] Tim’s company does leadership coaching, and he does executive leadership coaching with entrepreneurs to help them transition from founder (creating) to CEO (leading), and grow $½ M companies into multimillion dollar companies.
[9:00] There are three barriers for these companies wishing to grow into multimillion dollar companies: 1. No consistent marketing system 2. No sales system 3. Operations are complete crap. Tim fixes these issues in reverse order. First thing is to make sure the margins are good. Then tweaking the sales system to better convert existing prospects. Then find out what the best marketing channel for the business is. Once a company reaches $1M, you have to do this process all over again, as things get more complicated. And then again after $5M.
[12:20] Tim’s been a marketing consultant for 17 years. He thought he’d make it big during the Dot Com boom, by building websites and attracting eyeballs. He didn’t make it rich, because eyeballs to a site did not lead to sales. So he studied direct marketing and copywriting, in order to learn how to actually acquire customers. He used this stuff on himself and on friends, and friends started hiring him to make sure that what happened to his business did not happened to theirs.
[14:00] In the early internet days, it wasn’t easy to turn website visitors into paying customers. The companies Tim worked with could acquire leads but not customers. And they blamed Tim. Tim discovered that their operations did not allow them to take on more work.
[15:20] Tim does not have an MBA. He learned by doing and reading tons of books. He found that the companies we was working with associated more customers with more work, so they were sabotaging their marketing campaigns.
[16:30] His transition from marketing to full-fledge consulting was accidental. He found that these operational fixes could allow companies to take on more customers and thus make more money.
[19:15] For companies under $1/2M, the main operational problem is that the founder is doing the deliverable. They need to be the authority that attracts the job to your company, not doing the deliverable itself.
[21:00] From $½-1M, companies are still working on the above problem and still figuring out the message to market match, product-market fit, and optimal selling strategy.
[21:55] To grow beyond $1M, the founder needs to become a leader, not a manager (technician → manager → executive). Professional management needs to be put in place, if you want to grow to $5M. If you don’t want to grow beyond $2M, keep a small team and work in your business
[23:20] Don’t look for perfection, but a semi-workable sales system (closing 30-50% of prospects). This allows you to figure out the product-market fit, message-to-market match and the optimal sales strategy.
[24:20] If you are under $1M, you don’t have enough data to optimize systems.
[25:00] Once a workable sales system is in place, then it’s all about marketing, ie getting the target market to identify and prequalify themselves, so you can start converting leads and making cash. This requires testing multiple channels, which smaller companies often fail at, because they don’t put people in place to run marketing channels for them, freeing up the founder to experiment with other parts of the business or life.
[29:00] Some want to turn their business into a sellable asset. Others want to be able to take a lot of time off and still make $200-500K in personal income.
[31:15] Tim gets paid to help companies make millions. But he himself is satisfied with making several hundred thousand a year, traveling the world with his family and doing awesome things.
[32:15] Many entrepreneurs have the limiting belief of resistance to scale. They think more customers means they have to work harder, which prevents them from getting more customers.
[34:30] Is the reason you do not want to grow because of this limiting belief, or that you want to remain a craftsman/artist? Tim is a craftsmen - he’s really good at, and loves, changing people’s business with a small team of helpers
[36:30] To double your income, increase your rates; price according to market value not self-worth; add a 0; if you can provide 10X value to a client than what they pay you, they will be happy to throw big bucks at you. “Little hinges [money] swing big doors [clients]” - Dan Kennedy
[39:00] Don’t change your work, change your market. Go after clients who are happy to pay well for your services (because it helps them make more money).
[40:50] To add a 0 to your rate, read Al Ries’ books Positioning and The 22 Immutable Laws of Marketing. Use them to set yourself up as an authority. Also, change your view of yourself. Pricing is almost always a reflection of self worth, not what the market will bear. Don’t let your view of yourself limit you.
[42:20] Often the difference between getting paid $1,000 and $10,000 is a straight face. Get in front of a mirror and practice negotiating a higher rate.
[43:45] Do whatever it takes to deliver the result you promised to your client...and have the confidence that, if you can’t deliver, you will give them their money back. That way you will never be a fraud.
[45:30] The key to any business is high margins on the core service. To scale and increase margin, find other ways to transfer your core service (training, courses, books, webinars, software ). Tim’s core service is an exchange of intellectual property from his company to his client companies.
[50:15] Big clients will pay handsomely to fly you out and train 20-50 people at a time (corporate training is multi billion dollar industry). Think about what IP you have that you can train your market on. How could you package that in a way that clients would pay lots for? Currently, Tim is turning his coaching material on Team-Mapping into a product, that might allow business to predict hiring needs over a 1-2 year span.
[53:30] As long as you have your mindset right, you will be able to fix your pricing and find the target market that will pay you handsomely. Before you start taking too much action, make sure you understand why you’re not growing (you want to be a craftsman or you are afraid growth will mean more work) and what you really want.
[56:00] As a consultant, figure out how your core service fits into Jay Abraham’s three ways to grow a business: 1. Get more customers 2. Increase transaction value or 3. Increase transaction frequency.
Resources:
Getting Everything You Can Out of All You've Got, by Jay Abraham
Positioning, by Al Ries
The 22 Immutable Laws of Marketing, by Al Ries
Fake it until you make it without being a fraud, episode of Consulting Fuse podcast).
This episode is sponsored by Outbound Creative
Outbound Creative helps agencies and consultancies win their dream clients through eye-catching outreach campaigns. Learn more at OutboundCreative.com.