I woke up just before Christmas with an invoice in my inbox for $2,447… And no money to pay it.
That’s jumping ahead a bit, so let’s rewind for a bit of the back story. Just before Christmas at the end of 2012 we were getting finishing up the design of the new LivingforMonday.com. Our designers were working with the developers to get everything squared away and ready to transfer over to our main domain.
Our contract said that we owed our last payment on the site before it would be transferred over to our main site. I knew the rules and I knew we were going to owe close to $2,500 before we could launch the site.
I took a look at our bank accounts and I knew we were going to come up way short on funding… As in we didn’t have the money to pay our bills. I went to our source of funding for the site and asked if they would be able to float us with another cash advance or another investment. After a ton of consideration they decided it wasn’t a great time to invest more money in us, which I completely respected.
But that didn’t change the fact that we owed $2,500 for services that had already been performed and we had no way to pay, no money coming in from our business operations, and no prospects on the table for money to be coming in.
I didn’t want to freak our design team out, so I signed off on the final look and feel of the test site a week before Christmas, which meant we were ready to go live with the new site. They sent me over the last invoice, and according to our contract I had 7 days to pay.
I spent the first two days freaking out. I had no idea what to do and I knew we didn’t have the money. The simple fact of the matter was that I had counted on a source of funding that wasn’t confirmed, wasn’t within my own control, and wasn’t coming from the operations of the business.
In other words, I had been a complete idiot and lost focus. I had mismanaged our cash flow, ignored the sales process, and ended up with nothing in the pipeline as a result. At the end of the day, I was more focused on getting someone else to solve our cash flow needs than on solving my own problems.
After two days of freaking out, my designers emailed to see what was up with paying the invoice. I decided it was finally time to tell them the truth: we had no money and we weren’t sure if we were going to have money. Let’s just say that despite their friendly nature, the undertones of the conversation were of frustration, disbelief, and probably a bit of questioning my business sense… And rightfully so.
I look myself in the mirror and I issued a challenge: “Barrett, if you want this business to run, you’ve got to start taking responsibility for bringing money in the door and tackling your obligations. You’ve got five days to come up with $2,500. Go make it happen.”
At some point in your life, if you’re doing challenging work or taking a risk going after your dreams, you’re going to find yourself in a situation like this. You might be seeking a way to make some extra money outside of your job, wanting to test the waters of entrepreneurship without diving in all the way, or you might be a full-fledged entrepreneur trying to generate revenue… But some day you’ve got to face the music of bringing in business if you ever want to be an entrepreneur.
Regardless, the system I used to land a $5,000 contract in five days is one that can work time and time again if you put it to good use. (I’m not an expert and not guaranteeing results, yada yada.) I used a three step process to solve my cash flow problem:
- I tackled my psychological barriers and changed my mindset
- I focused on my personal sweet spot
- I researched the best in the business to find out how they have tackled similar issues
Mindset
When I really faced the facts, I knew that my lack of funding wasn’t due to my lack of ability to create money through my work. It was because something was holding me back from really going after revenue-generating activities.
To address the psychological barriers I was putting up, I did three things:
- I recognized the fact that making money enables me to make an even bigger impact with my work
- I recognized that I have everything I need to make it happen, I just need to stop making excuses
- I settled on a specific objective
Money increases my impact
It’s fairly common amongst entrepreneurs that they love their work, they love helping people, and therefore the end up wanting to give their work away to help as many people as possible. I’ve suffered from the same feeling on a regular basis, and if you ever set out to start a business I suspect you will too.
Here’s the thing: research shows that people commit more to something when they have to make a sacrifice to get it. So, for example, my consulting clients are more committed to the projects at hand when they pay a fair value for the work than when the work is being done for free. I know this is a recognized fact, and yet still I’ve hesitated to ask for money for my work in the past.
With my back against the wall, I decided it was finally time to stop sabotaging my own business and actually ask for fair value for my work. That was the first step to adjusting my mindset, and it is the first step you will have to take if you ever want to make money from side-gigs, your own business, or even to get a raise in your current job.
I am my only obstacle to making money
Secondly, I looked myself in the mirror and I knew that there was absolutely nothing holding me back from making money but myself. I needed to create a system that I could rely on to generate revenue over and over again. Landing one contract would be great, but landing contracts repeatedly would be even better.
When I came to the realization that a system would allow me to get over my childish fears of selling my talents, I knew I had made the second required mindset shift. If you want to grow a business or build experience by getting paid, then you’ll have to commit to creating a system to help you succeed. Otherwise, you’ll wake up one day and you won’t have any prospects and that will truly suck. Luckily, I’ll give you a repeatable system at the end of this post.
I need a goal and a system
I completed my mindset shift by focusing on one specific objective: land a contract of $2,500 and take care of my cash flow issue. Anything over and above that was icing on the cake.
I know from my coaching work that big goals can be so overly intimidating that my clients won’t take the first step unless they are broken down into manageable tasks. Considering a goal of making $60,000 this year makes me want to crawl in a hole and hide, while trying to make $2,500 this week is much manageable and more defined.
I focused on that goal exactly: $2,500 in one week. You will need an equally clear goal that is measurable, has a deadline, and is within your grasp. The first time you set out to make money like this, make it something that doesn’t completely intimidate you.
Personal Sweet Spot
Luckily, I’ve been developing coaching concepts for a while now, and one of the main things I do is help students and young professionals figure out what they want to do with their careers. One of the concepts I teach in our Career Kickstarter course is called the personal sweet spot, and it consists of the intersection between the answers to three questions:
- What gets you excited?
- What skills or experience do you already have?
- How can you provide value to the market?
What gets you excited?
This question essentially means: what are you interested in and what can you be passionate about? I’ve explored that question often, dating back to before I left my first job. I know that helping people reach their goals, realize their full potential, and solve interesting problems are my realize passions. That’s why coaching, consulting, and experimenting are so attractive to me.
When I sat down to determine how I would deliver value of $2,500 or more, I knew that consulting was probably the ticket to success. In a pinch, you need to focus on the interests you have that don’t require explanations to get your potential customers to understand what you “do.” If you’re building towards something more long term, you may have more room to move here.
What skills or experience do you already have?
I knew that leveraging my background in consulting was going to be my best bet. At least 80% of people in the business world recognize the name of my first employer, and I recognize that as a major advantage when pursuing consulting contracts. While I often note that the first job I had was not a great fit for my aspirations, I also know that just mentioning the name of the company has a powerful psychological effect.
Your job will be to figure out what skills or experience are potentially valuable, as those are the assets you have working for you in the eyes of others. If it’s not a big name, then it is certainly something. You have a skill or background that someone will value, so you just have to put your finger on it.
How can you provide value to the market?
In a former course of mine, I taught that there are essentially seven ways you can provide value to another person in an employment situation:
- Building a product
- Delivering a service
- Selling someone else’s product or service
- Creating content
- Customer service
- Managing/performing processes
- Managing/coaching people
In this case, I had no time to build a product; it would take too long to sell someone else’s thing and make the money I needed; creating content could be valuable, but I’ve produced no proven results in that past; customer service is typically an hourly type deal that happens in house, and managing people or processes are not exactly quick turn-around activities.
That left me with delivering a service, which matched up well with my interests and experience. The intersection between the three – my interests, skills/experience, and providing value to other people – was my answer as to how I would make my money. You can use the exact same three step process to determine how you want to make money, develop a product, start a business, or anything else.
One disclaimer: if you pick an intersection of interests, skills, and value that isn’t valuable to anyone else, then you’ve done it wrong. All of this should be with the intent of providing something that the end customer truly values. To do that you have to play to their hopes, fears, and dreams, which we’ll hit on in the next section.
Research
I always defer to research. My girlfriend makes fun of me because when I bought a coffee pot, I researched the best coffee pot and the various potential features for hours… But I’ve never regretted buying that coffee pot because I knew exactly what I was getting, and what I was giving up in terms of features when I ordered it.
My point is that research is a valuable tool if you know how to do it right. In the case of solving my cash flow problem, I went looking for people who had experience with producing large amounts of income in relatively small periods of time. With that in mind, I ended up focusing on Dane Maxwell, Ramit Sethi, and Chase Jarvis.
I learned a valuable three-step method for selling:
- Decide on a target market
- Generate a list of prospects
- Use a one-two punch to land the deal
Decide on a target market
I learned that the more specific you can be with your target market, the more likely you’ll be to actually generate revenue. Specifically, I learned to ask three questions:
- Do they have a felt need?
- Can they pay?
- Can I deliver?
The basic idea here is that I needed potential customers who had a problem or challenge that needed to be taken care of as soon as possible. They needed to be able and willing to pay. Finally, I needed to know that I could deliver on what they needed.
My mother has been in the property and casualty insurance business for a long time. I interned for her when I was 14, and I’ve continued to learn about the insurance industry second-hand ever since. That was an advantage because she could not only connect me to her network of insurance professionals, but also tell me more about what typical problems insurance agencies face.
What I learned is that insurance agents have many unmet needs in their businesses, just as many small business owners do. Even those that are growing and thriving have needs because they are so deep in the weeds that they aren’t able to take advantage of high-level strategic opportunities in their business.
I knew I needed to target agencies who were well-established and growing. Ideally, I would find agencies that have 4-10 employees, have seen a decline in growth rates, but that still have substantial revenue coming in the door. Why? Because those are the agencies with the ability to pay, and I knew that I could handle or learn whatever was necessary to tackle the problems in such a small business.
Generate a List of Prospects
The second thing I learned from this group of expert marketers and business builders was that I had to have a way to generate a list. In this case, I only needed to land one contract, so I could use my personal network to generate my leads list. (However, I also knew that it would be very easy to generate a larger leads list by searching for insurance agents in my area and then looking for award-winning agents, which indicates growth and revenue.)
I generated my list of prospects by:
- Thinking of people close to me who were in the insurance business
- Searching my email contact list
- Checking on my LinkedIn connections
When you go to build your list, you’ll want to be sure you have a reliable source of information to use to your advantage. That might be simple Google searches, local publications, or awards lists in your area. Ie “Best Places to Work in Atlanta” or “Largest Insurance Agencies in Atlanta.” Look for prospects that meet your target market and keep track of them in a simple spreadsheet.
Once you build your list, send an email to the contacts with enough information about what you’re up to that they would be intrigued if they have a felt need. For example, if I were doing employee engagement consulting work, I might send something like:
Hi {Name},
I hope you are doing well.
I came across this article on employee engagement the other day, and I thought you might find it interesting. You can check it out here:
I would love to get together and learn more about how you motivate and reward your employees. It would be interesting to discuss how the ideas in the article might be beneficial to your business as well. Do you have any time over the next couple of weeks?
Sincerely,
{Your Name}
Assuming the article was related to the work you want to do, the people who respond are the people who are interested in discussing how employee engagement could improve their business. I learned from the masters that we can call those qualified leads.
Use a One-Two Punch to Land the Deal
The one-two punch is a two meeting sequence that will allow you to close the deal with the right customers with confidence.
In the first meeting, your job is to understand, as Ramit Sethi says, the “hopes, fears, and dreams” of your potential customer. You are not selling anything, and you are not trying to prove how valuable you are by talking too much. No, the point of the first meeting is to get the answers to a couple of key questions:
- What are business activities that are most important to the success of your company?
- What are your biggest frustrations related to {name one of the answers to the first question}?
- What are your biggest challenges related to {name another answer}?
- What are your biggest frustrations related to {your expertise}?
- Where do you want your business to be in five years? What is your ideal lifestyle if the business reaches that point?
The hopes and fears will come out as they talk about their challenges or frustrations in the business. Their dreams will come out as they describe their ideal business situation and lifestyle.
That is your entire goal of the first meeting: ask great questions, understand their business, and get to their hopes, fears, and dreams. Your job is to do a whole lot of listening. This is the exact process that opened the door to my $5,000 contract. I went into the first meeting thinking I would sell social media services, and I left knowing that I would help the business owner completely restructure his business – all because I asked the right questions.
When you get to the bottom of these things, go home and prepare for your “briefcase technique” meeting. The briefcase technique is a method from Ramit Sethi again, and it goes something like this:
- Go home and brainstorm solutions to the problems your prospect talked about in the first meeting
- Organize your thoughts into 3-5 core solutions
- Arrange your proposed solutions into a 30, 60 and 90 day plan for implementation
- Create a word document with your proposed organization plan (make it look good and print it out)
- Arrange another meeting with your prospect
During the second meeting, begin by asking some of the same questions from the first meeting. However, this time focus in on the problems you are proposing to solve in your proposal document (but don’t show the document yet). After your future customer reiterates the problems he is facing and tells you about how he wants them to be solved, you tell him you are the person to solve those problems.
He will say something like, “Well, how much will it cost me?” Without saying a word, respond by puling your proposal out, sliding it across the table, and asking your future customer if you can walk him through how you would solve his problem.
That was the exact point when my prospect asked me, “How much will it cost me for all of it?” And that was where by biggest point of failure came – I didn’t expect him to want all of it! I had put together a detailed, 6 month plan and I was only hoping to sell $2,500 worth of the work. I almost blew the deal as a result.
My prospect said to go home, think about it, and get back to him… That’s code for: “Good try, but now I’m going to have to think about it.” That was NOT an acceptable outcome, especially with that invoice sitting in my inbox.
Luckily, I recovered quickly, and said, “Great, I can have a contract ready by tonight. When would you like to make a final decision?”
And that’s how I closed the deal. He agreed to make a decision two business days later. We agreed to a 6-month contract worth $5,000 ad he agreed to pay 50% up front, which gave me my $2,500 of cash flow just in time to pay my bills.
The Repeatable Process
I promised you a repeatable process for generating revenue for your side project, entrepreneurial test, or full-blown business. It may have gotten lost in the shuffle, so here it is one more time:
- Face your limiting beliefs and realize that making money is ok
- Specify your objective
- Clearly define your target audience
- Generate a list
- Meeting one: Get to their hopes, fears, and dreams
- Meeting two: Present your proposal that “magically” addresses their challenges
- Be ready to make the ask and close the deal
Photo: Calendar Card – January by Joe Lanman on Flickr