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3 Mistakes Hindering Your Professional Services Business’s Growth

Published

1 month ago

August 1, 2024

3 Mistakes Hindering Your Professional Services Business's Growth

Opinions expressed by Entrepreneur contributors are their own.

Professional services firms make up a majority of the small business universe in the U.S. Most never cross the seven-figure revenue mark or even see it on the radar. They tend to be dominated by a few loyal clients. Hard-driving founders work 24/7 to get projects done and, if a client asks, they will sell the few minutes they have free every week to breathe. They depend so heavily on the owner’s time and talents and are notoriously hard to scale and monetize.

My partner and I ultimately scaled our professional services firm to nearly eight figures when we finally figured out that larger opportunities tended to go to larger businesses. We were good at selling and delivering for our clients. But with just the two of us playing all roles in our business, we were overburdened — and clients knew it. They saw us juggling multiple tasks and companies and got used to receiving emails at all hours of the night when we finally had free time to answer their questions. They often gave additional consulting engagements to other firms because of our limited bandwidth. We lost millions of dollars in opportunities when we thought small.

We broke through the million-dollar mark and kept right on going when we started thinking like a larger firm. We talked a bigger game at the beginning and took on debt to hire consultants and salespeople to get there. It was nerve-wracking, and there were some sleepless nights. But pretty quickly we started to see more opportunities in the pipeline, current clients expanding their scope of services with us and competitive opportunities we had never been included in before.

Here are three ironclad rules that drove our success:

1. Start selling your firm, stop selling yourself

Unless you can charge tens of thousands an hour or clone yourself a few times over, you will never consistently make that much money selling your personal skills. You need people — or at least the illusion of more people (until you get bodies in place) to get real revenues. Our approach? We figured out what clients liked about us most and we rewrote our sales materials to include words like “our team” and “our approach.” Behind the scenes, we created a training guide and videos for new employees to learn our hows (and our whys) and then be able to sell them.

2. Resist the temptation to save salary expenses by hiring less experienced consultants

Our success ultimately was tied to our willingness to hire well ahead of the curve and put the expert team in place that our new sales materials promised. A big rookie mistake we didn’t make was to hire part-time or less experienced people than the business needed. Instead, we hired experienced heavy hitters who were bored in corporate America and looking for a new challenge.

We couldn’t quite meet their sky-high salaries, but we made up for it with flexibility and independence. In a few cases, we granted equity in exchange for work quality, tenure and sales. But we took most of the hit personally by staying at far reduced salaries for almost two years. It was a slog, but it allowed us to make a few key hires who were critical to driving the business and helping us hire more superstars.

3. Don’t skimp on sales

We fancied ourselves our firm’s best salespeople. Unfortunately, we also were the chief recruiter, head editor, lead administrative assistant and accountant. We just didn’t have enough time in the day to sell. But if you aren’t selling at a services firm, you’re dead in the water. Our only other option was to invest (heavily) in the sales function.

We hired someone to uncover and tee up opportunities, giving us more time to focus on closing bigger deals. Keep salespeople’s compensation risk-based. We used a highly motivating tiered compensation plan and built in hefty bonuses for achieving sky-high numbers. Our first salesperson doubled earnings year over year when he finally crossed the $2 million threshold. We made money, he was a happy employee, and my partner and I forgot (almost) about giving up several months’ salary to bring him in.

These days, it might make more sense to invest in a marketing platform like Hubspot, Salesforce or a myriad of other new competitors to do the heavy lifting. By the time we sold our firm, nearly 50% of new opportunities for our $100,000-plus consulting agreements came through these tools. Be sure to save some money in the budgets for marketing platform consultants. It took us a while to tweak our system and stop nearly two-thirds of our emails from getting snagged by spam filters.

Generally, the larger your team and the more it can run without you, the higher your revenues and profitability. Put your time and talents into increasing your company’s valuation — not tying yourself to it — and you’ll be rewarded with milestone sales and a payout that more than makes up for any sacrifices you make along the way.

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Invest in Yourself with a Lifetime of StackSkills Courses for $29.97

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17 hours ago

September 8, 2024

Entireweb News Bot

Invest in Yourself with a Lifetime of StackSkills Courses for $29.97

Disclosure: Our goal is to feature products and services that we think you’ll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.

As a busy professional, finding time to invest in your education can be challenging. But what if you had lifetime access to an online learning platform that lets you learn whenever and wherever you want? That’s exactly what StackSkills offers—and right now, you can get lifetime access for just $29.97 (reg. $600).

StackSkills is an intuitive, user-friendly platform that’s perfect for anyone looking to enhance their skills without committing to a rigid schedule. Whether you’re a parent returning to the workforce, a business owner looking to gain new skills, or simply someone looking to keep up with ever-evolving industries, StackSkills provides the tools and flexibility you need to stay ahead.

With instant access to a pre-selected library of more than 1,000 courses—with new courses added monthly—there’s something for everyone. The platform’s range of beginner to advanced courses covers professional topics like IT, development, graphic design, finance, business, marketing, and more.

There are even personal growth topics like mindful meditation. And with more than 350 of the web’s top instructors, you’ll be learning from some of the best in the business.

One of the greatest advantages of StackSkills is the flexibility it offers. Instead of being tied to a specific time or place, you can access the platform from anywhere and learn at your own pace. Whether you have 15 minutes during your lunch break or a few hours on the weekend, StackSkills is designed to fit seamlessly into your busy life.

Consider a business owner looking to improve their finance skills to better manage their company’s growth. They can browse the available finance courses, find what suits their needs, and immediately start building the expertise necessary to take their business to the next level. And with course certifications, they can demonstrate their newly acquired skills to clients and stakeholders.

Whether you’re starting from scratch or looking to take your knowledge to the next level, StackSkills has something for everyone.

Get lifetime access to all of StackSkills courses for just $29.97 (reg. $600) through September 29.

StackSocial prices subject to change.

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Best US Cities to Start a Business, Entrepreneurship: Report

Published

2 days ago

September 7, 2024

Entireweb News Bot

Best US Cities to Start a Business, Entrepreneurship: Report

What city is best for starting your business? While several factors should play into a decision, a new report from fintech company SumUp has identified the top 10 for entrepreneurship based on tax data, the number of millionaires in the city, and even Google searches.

New York topped the list because of the opportunities it offers across industries, from tech to fashion, and its 4% sales tax, which was the lowest of the group. New Yorkers also frequently Google “how to get rich” and “how to make it in business,” the study found. The city also offers access to over 30 WeWork coworking locations, the most of all the cities in the report, which theoretically could help startup employees collaborate.

Chicago came in at No. 2, with SumUp researchers highlighting its 120,500 millionaires and high interest in entrepreneurship through tracked Google searches. They also found that Chicago stood out for finance startups.

Rounding out the top three was Miami, “where the weather is warm and taxes are low,” according to the study. Travel, tourism, and commerce startups thrive in this city, which has 0% personal income and capital gains tax.

Here’s a complete list of the top ten cities for entrepreneurship, according to the report.

1. New York

Number of millionaires: 349,500

Personal income tax – highest income: 10.90%

Sales tax: 4.00%

2. Chicago

Number of millionaires: 120,500

Personal income tax – highest income: 4.95%

Sales tax: 6.25%

3. Miami

Number of millionaires: 35,300

Personal income tax – highest income: 0.00%

Sales tax: 6.00%

4. Los Angeles

Number of millionaires: 212,100

Personal income tax – highest income: 13.30%

Sales tax: 9.50%

5. Dallas

Number of millionaires: 68,600

Personal income tax – highest income: 0.00%

Sales tax: 6.25%

6. Austin

Number of millionaires: 32,700

Personal income tax – highest income: 0.00%

Sales tax: 6.25%

7. Houston

Number of millionaires: 90,900

Personal income tax – highest income: 0.00%

Sales tax: 6.25%

8. Seattle

Number of millionaires: 54,200

Personal income tax – highest income: 0.00%

Sales tax: 6.50%

9. Washington

Number of millionaires: 28,300

Personal income tax – highest income: 10.75%

Sales tax: 6.00%

10. Boston

Number of millionaires: 42,900

Personal income tax – highest income: 9.00%

Sales tax: 6.25%

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What Is Founder Mode and Why Is It Better Than Manager Mode?

Published

3 days ago

September 6, 2024

Entireweb News Bot

What Is Founder Mode and Why Is It Better Than Manager Mode?

Paul Graham, the founder of famed startup accelerator Y Combinator, coined a new term this week that has taken over social media: founder mode.

In an article released on September 1 and publicized on X over Labor Day weekend, Graham separates “founder mode” from the traditional “manager mode” route by noting key differences in management styles and organizational structure. Graham’s X post has over 21 million views at press time.

Founder mode means that the CEO interacts with employees across the organization, not just their direct reports. The startup, even as it grows into a large company, is less hierarchical; the CEO could do “skip-level” meetings with employees, for example. Graham gave the real-world example of Steve Jobs running an annual retreat for who he thought were the 100 most important people at Apple — regardless of where they were on the corporate ladder.

Manager mode, meanwhile, is less hands-on and involves more delegation to other people. Founders can grow companies and run them effectively without switching to manager mode, Graham stated.

“Hire good people and give them room to do their jobs,” Graham wrote. “Sounds great when it’s described that way, doesn’t it? Except in practice, judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them drive the company into the ground.”

Graham gave the example of Airbnb CEO Brian Chesky, who tried to follow conventional “manager mode” wisdom to hire good people and let them do their jobs.

“The results were disastrous,” Graham wrote.

Chesky had to pivot to a different “founder mode” style of management and explained in an interview last year that founders have multiple advantages over managers: They have owned every part of the process of building a company, from start to finish; They have built the company up, so they can rebuild it; and they have permission to rebrand the company or make major changes.

This is it: @bchesky on founder mode.

Three reasons why founders differ from managers:
1. Being the biological parent
2. Full permission to make change
3. Knowing how to rebuild the company pic.twitter.com/VhuQ70B8FK

— Yana Welinder (@yanatweets) September 2, 2024

In the past few days since Graham released his essay, the social media world has begun exploring what it means in humorous and insightful ways. One post drew a comparison between micromanaging and founder mode.

founder mode pic.twitter.com/LWOlaFq4UJ

— ST (@seyitaylor) September 2, 2024

Other posts from women founders addressed the question: Can women be in founder mode too?

Chesky wrote on X earlier this week that women founders had been reaching out to him since Graham released the essay about how they can’t run their companies in founder mode the same way men can.

“This needs to change,” he wrote.

Remember when the female founders did founder mode and all got cancelled for it?

— Sara Mauskopf (@sm) September 3, 2024

It happened to me first — headlines portraying me as a “toxic leader” when I had to make the same, often unpopular, decisions that my male peers did without critique.

For them, it’s called Founder Mode, and it’s celebrated (a proper noun! With its own merch! And trademarks… https://t.co/rF0IM1huy3

— Sophia Amoruso 3.0 (@sophiaamoruso) September 5, 2024

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