Cash Flow, Generating Leads, and Clients #AskSwenk Ep 1
When I was starting out, I didn’t have anyone to go to with my questions. As a result, I ended up making a lot of mistakes. I decided to start doing Ask Swenk, so you don’t have to go through what I went through.
Question # 1 – How can I generate new leads?
Angus Watts writes, “The biggest challenge I have right now is generating new leads. I have a high conversion rate once I get in front of a prospect, but I have trouble getting new leads to send proposals. I run a small, local-based web design business in Australia.”
Answer #1 – Know your audience.
The biggest thing on generating new leads is to know your audience. Know specifically who it is that you’re going after and laser-focus in on them.
A lot of people make the mistake of saying “I’m going to target small business,” or “I’m going to target B2B,” and just stop there. That’s not laser-focusing. You need to break it down a couple of more levels, really identify that audience, and figure out their specific challenges.
Once you know their challenges, you can start writing content that can help them. That’s the kind of stuff they’ll be searching for online. Figure out what publications they read, what technology they use, the associations they belong to, trade shows they attend, etc. That’s laser-focusing.
Laser-focusing is also how you get people to start looking at you as an expert. Specialization and having a niche will open up so many more opportunities for you. It separates you from everyone else.
Shameless plug: Check out my Generate Leads Everyday program 🙂
Question #2 – I struggle with cash flow and profitability.
Peter writes in, “The biggest challenge we’re going through right now is cash flow and profitability. We have a decent-sized portfolio of clients on a recurring retainer and we do over $1.5 million in revenue. But as we grow, ramp up more staff (we’re over 30 now) – cash is always tight. It’s been tough to push out our margins to a comfortable level.”
Answer #2 – Switch up your payment terms.
I suggest trying to change payment terms. Being on retainer is great but a lot of times it means you’re front-loading all the work and then gradually not doing too much on the backend. So the first 3-4 months are when you’re really doing everything.
That’s why I like to do four month engagements. Say I was charging $5k on retainer. I would bump it up to $40k for the particular project then ask for 50% up front before we even start (cash flow infusion!).
Halfway through, I would ask for 25%, and ask for the other 25% either by a certain date or at the end. Occasionally, this would allow us to be paid for 100% of the project before it was even complete (cash flow infusion!).
You can also try to negotiate new term agreements with your vendors and contractors and do cash flow projections.
Question #3 – How do I keep the high-paying clients?
Migel says, “Lately, I’ve had issues keeping my high-paying clients. In return, it causes me to end up with more lower-paying customers who want one-shot services, small campaigns, etc. which generate less income. How do I keep the high-paying clients and get to the next level?”
Answer #3 – Retaining and leveling up.
In this situation, you need to find the right person, either an account manager or project manager, that will be able to take it up a level and make sure that the work that needs to be done is actually getting done.
Right now, it’s just you and your contractors but your contractors don’t care about you. The just care about delivering the work you assigned and getting paid for it. You’re left running everything else.
My advice is to definitely get a project/account manager in order to keep the big accounts happy.