Let me set the scene...
It's late February 2000. I had just failed at my DotCom business and was doing some copywriting and marketing consulting to try to pay my bills.
I was consuming everything I could about how to be successful and a book just came out by this guy, Jay Abraham. I'd heard his name in a bootleg copy of a Dan Kennedy course so when I saw it on display at Powell's Books in Portland I bought it immediately.
It was expensive. $24.95 was a lot for a book back then. Especially for a failed startup founder with a wife, a brand new baby girl, and a mortgage, car payment and student loans. (I just did the inflation calculation: that book cost $50 in today's money)
On page 5, I saw this...
This formula became the foundation of my first successful business.
Here's how I used it to double my income within a couple of months:
I focused on the three ways to grow a business for myself.
The obvious one is "Increase the number of clients." We all do this. We all try to get more of them, but the other two made the biggest impact for me.
I increased the transaction value per client (aka raised my rates) and the number of transactions per year (I got them to buy more than once).
I didn't know how to double my income immediately but I could increase it by 25% like Jay's book showed.
I didn't yet know how to get clients to pay me every month, but I could figure out a way to get 1 out of every 4 clients to hire me again.
Just follow Jay's formula. Genius plan, right?
I was still charging hourly for consulting and small project fees for copywriting ads. So I raised them by 25%. Then I set out to get a couple more clients.
A week or so later while Jay was doing the book tour for Getting Everything You Can Out Of All You've Got, he did a teleseminar (for you youngsters this meant calling a phone number and listening to the presentation).
At the end he opened up for Q&A and I somehow got a chance to speak to him out of the hundreds of people on the call.
I asked him how I could use this formula to build my marketing consulting business.
He told me to offer it as a service.
He said to show my prospects how I could increase their business by 33% by increasing the three levers by just 10%.
That week I pitched one of my recent clients who was happy with the results of an ad I did for them. They said "Yes!" so fast because no one had ever shown them how they could grow in such a simple way.
I quickly increased my prices by another 25%, then another 25% and another until my closing rate dropped to under 30%.
Jay's advice led to me growing from a one-man consultant to a seven figure agency within a couple of years.
The same formula works for you...
Maybe you've got 10 clients right now and they're paying you $2000/mo. $20k is pretty good money, but if you pull these three levers you'll nearly double your income in a year.
You need just 2.5 more clients (the 0.5 is a partial year of working together). Your fee goes to $2500/mo.
And here's the creative part since they're paying monthly -- you get your clients to do a sprint -- a short project that solves a specific problem for $7500. This will increase your revenue to $468,750/year.
Now run it for yourself:
Current
# of Clients _____ x Transaction Value _____ x Transactions per Year _____ = Total Income _____
Target
# of Clients _____ x Transaction Value _____ x Transactions per Year _____ = Total Income _____
Pick one lever this week. Not all three. If you haven't raised your prices in the last six months, that's your lever. Raise your price for the next client you sign.
Once that's done, go to your lowest paying current client or your least profitable one and tell them your rate is going up. If they stay, your profit goes up. If they leave, you've already replaced the revenue with a higher paying, more profitable client.
Now take Jay's formula to a client.
Pick one and run their numbers through it. Find out how many clients they have, what they charge, and how often clients buy. Show them what happens when each number goes up by just 10% and put it in a one-page proposal.
Then incorporate it into your pitch for every new prospect.
When you start using Jay Abraham's Three Ways To Grow A Business for yourself and your clients, your income will double faster than you thought possible.
t
PS. Jay also told me I had it in me to become successful even though my first business was a failure.
Maybe he said this to all young, aspiring entrepreneurs, but that encouragement gave me the belief in myself I desperately needed.
I write The Monetize newsletter each week to hopefully pass on that encouragement to you.
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