HOW TO 5X YOUR REVENUES WITH 1 ACTION PLAN

By Leonard H. Grape

Revenue growth is a critical metric for every service business.

It's a shared aspiration among agency founders and freelancers to earn a higher income.

But what happens when you reach a revenue plateau?

How do you overcome strong inertia when you can't figure out how to drive momentum and increase your sales?

It happened to me with my agency.

I was getting good strides until I wasn’t.

My client base is increasing but the revenue growth is not at par with my targets.

Then at one point, I managed to 5X my revenues.

Looking back, I had 1 action plan that made it possible.

INCREASE MY RATES.

I’ve encountered many service professionals who fear increasing prices would turn prospects away.

They feel they need to be "the best" before charging higher.

They are also bound by a perception that there must be a superb price justification.

I want to share a different perspective with you, one that’s more driven by business acumen than emotional biases.

I reviewed our financial statements after running my agency for about 18 months.

Usually, I keep my focus on 4 key financial metrics:

1. Topline Revenue

2. Profit Margins

3. Operating Expenses

4. Net Income

These are influenced by different variables within an agency or service business, such as the number of new clients, project extensions, and average contract price, to name a few.

So back in those days, I saw that we had a promising start. We have signed 7 clients, and we’re targeting to double that number during that year.

But I assessed the revenue we could generate if we retain our pricing model. It’s not going to drive a lot of growth. Even if we increase our client volume, it will require much more effort, manpower resources, time allocation, and handling different clients.

That’s when I decided that if I wanted to 5X our revenues, I should look not only at volume but also at the economics behind how we close and run our projects.

So, my number 1 action plan was to increase our engagement price with every client opportunity.

By doing that, we will reinvent our firm 1 client at a time, improve the quality of the projects we do, attract better prospects who can pay higher fees, and avoid low-paying, time-consuming, and usually demanding cheap clients.

Here is a rough snapshot of how I accomplished our price increase ladder from month 0 to about month 18:

• First project - $1,500

• Second project - $500 plus x-deal

• Third project - $2,200

• Fourth project - $4,500

• Fifth project - $6,000

• Sixth project - $10,000
  

• Seventh project - $18,000

By the time we hit our year 2, I’ve increased our average engagement contract to about $15,000 after signing multiple $20,000+ projects.

We grew our revenues by 5X because we anchored our growth plan on improving our prices, elevating our work, and enhancing our sales and marketing.

Obviously, this was not a linear journey, and it required a lot of trial and error, pricing testing, rethinking our service design offering, sales approach, and proposal framing.

However, the main force that moved the inertia for us was the clarity on the importance of regularly increasing service fees.

If you keep delaying it or wait until you've clocked in 24 to 36 months, it might be too late because you can get tired of waiting or become burnt out from working on several financially unfulfilling projects.

Churn rates are part of the growth process, and you will have some churn.

Some clients will decide you’re no longer a fit with the pricing, and that’s okay.

Some prospects will not even decide to work with you after you reach a specific price point.

That’s a good sign for you because it only means you’re moving to the next growth level. Having a healthy churn rate is essential to growing your business.

I’ve always believed that pricing is risk-taking.

And as Peter Drucker would say, all profits are derived from risks.

It’s also influenced mainly by your perception of money and your self-esteem.

So, if you genuinely want to break the revenue plateau and increase your sales, you should take this one action point: raise your prices with every client opportunity.

It doesn't necessarily have to be a massive jump from where you are. Depending on your current average price and comfort level, it could be a 20% to 50% increase.

But if you're aiming to 5X your revenues, like I did, you need to work on increasing your prices by about 50% and up.

If you need help navigating this with your service business, consider checking out my The $10k Legend where I help you add $10,000 to your business in 90 days, where I help agency founders and freelancers increase their revenues while working less.

Or if you’re looking for an impactful but without a long commitment to boost your sales and address your burning business challenges, my 60-minute growth business coaching might be a better fit for you.

Either way, my coaching action point in this article is to increase your price by at least 20% with your next prospect. Start at the base so you won’t have much of an excuse for not doing it.

Cheers and good luck!

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