✔️ You have no consistency or predictability in your cash flow.
✔️ You have to re-invent the wheel for every client you work with.
✔️ You have to start from scratch every month. Even if you sold a $30K project last month…next month you start from zero and have to go land another project just to pay the bills.
⁉️ You can’t scale or build a team around that.⁉️
And worse, because you are SO busy trying to keep up with the projects you can’t focus on building stable, predictable recurring revenue!
Hey, this is Josh with the seven-figure agency and I got off a call with one of our coaching members and a recurring topic seems to come up. And that’s people were kind of stuck because they’ve got the wrong business model. A lot of them are kind of stuck in this mode where they take a lot of projects, you know, projects being website projects, mobile app design projects, some of them have even gotten good about charging a big fee, like 15, to $30,000, to do projects. And they know, they want to get residual income, they know that they want to get recurring retainers, but they think, Oh, you know what, I’ll take these projects and eventually it will turn into retainers, or I’ll, you know, sell projects, and I’ll get some hosting and some maintenance on the back end of that.
And what I really believe is that this project work is killing your business. The reason is, you get a project, it’s a one time fee, and that one time fee usually has a deposit. And then you gotta hustle to get the work done, and you get paid one last time to complete the job. And if you sell a project, usually that the client is in the mindset of project, right, I’m going to pay to get this done and that’ll be that, as opposed to a program, which is something that’s like, this is what we’re going to do, and it’s going to be an ongoing business relationship.
My first business, my first digital marketing agency, was project-based. It was called Develacom, we sold websites, we sold hosting, we tried to get, you know, as many clients as we could. And it felt like no matter what we did, even if we sold seven or eight clients in a month, and we usually only sold like five or six, you know, we would only get, five to $10,000 for the month. And every month, we’d have to start from scratch, right. So really what happens is, you wind up getting paid, and you have to restart every single month, you got to go land another five or six clients, you got to crawl your way to make enough money just to pay the bills, and to try and cover your expenses. And to me, that’s the recipe for failure.
That was the reason my first business after about three years had to be shut down. When I relaunched back in 2011, as click Inc, serving the plumbing and HVAC world, I had one program that I sold, and it was a recurring based model. Everybody that I sold was going to pay me between $1000 and $2,000 per month, and by doing so every single month, our base recurring revenue grew, we know how much money we’re going to get, we knew that that number was growing. And by doing so we could really build scale, we could build systems, we could have some predictability to the way our business operated.
So you know, if you’re taking project-based work, there’s a couple of challenges that go along with that. First of all, there’s no scalability to it, right, you get a project, it’s different from one time to the next, you’re constantly reinventing the wheel. And if you’re constantly reinventing the wheel, there’s no consistency, there’s no way to put a team around it. The second thing is there’s no predictability to your cash flow. Right, you might get paid for a project one time, and then you know, that’s that. You can’t really build a team around it, you can’t plan your business organization around it.
So what I found works best working with a lot of digital marketing agencies and I’ve seen a lot of them go to multiple six figures, seven figures and beyond is to sell recurring projects, right? Go in, have a very specific methodology that you’re going to bring to the table. Here’s what we’re going to do, here are the results you can expect. Here’s what you’re going to pay on a monthly basis to have us implement this for you. There are lots of companies willing to do that. There are lots of companies willing to spend between $1000 and $5,000 per month. I want to encourage you, you know if you’re kind of jostling between project work, and recurring work, you’re killing your business.
Let me know in comments if you agree, disagree, what your thoughts are, we’d love to hear from you. And just post in comments and let’s continue the conversation there. I’ll talk to you later.
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