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The original high-leverage business model

Posted byIan Brodie on January 23rd, 2022.

This is the second in our short series of posts about building a “life-friendly” business. A business that can stay small and low maintenance, but reward you richly.

I mentioned in last week's post that the first thing you need is to build your business around a high-leverage business model.

In other words, a business that is set up to give you the highest return on your time rather than the highest return on investment or overall returns.

Let's look at some of your different options…

Perhaps the easiest and fastest way of getting leverage is simply to charge more.

You often hear people with limited real-world experience of professional services castigating others for falling into the trap of “exchanging time for money”.

But if you're exchanging your time for a heck of a lot of money it's rarely a problem. In essence, it's the business model that ultra high paid sportspeople, film stars and rockstars use.

It's the simplest business model. It doesn't need a big staff or complex technology or mass online marketing.

But you can't just decide to charge rockstar level fees and suddenly expect high-paying clients to come rolling in. Well, not unless the stars align and you happen to be in the right place at just the right time.

In the real world, if you want to charge super high fees then your clients have to see you as the very best or only way they can get what they're looking for. And that thing has to be urgent and high value to them.

That means you have to be smart about the area you focus your services on. And you need to invest time in becoming seen as a real leader and expert in that field.

Being seen as a leading expert means just that. You have to both be a leading expert, and be seen as one. It means you need to publish, speak, come up with fresh ideas, appear on podcasts or engage in any one of a myriad of ways of getting your expertise visible.

Years ago the Hinge Research Institute studied the impact of perceived expertise on the fee rates professionals were able to charge and how in demand they were.

They found that being well-known for your expertise in a region or an industry was enough to get you 4-8x the fee level of a typical professional. And you would get 2-3x the demand for your services.

The impact of that on income and quality of life is huge.

For example, a “low leverage” consultant might try to bill 5 days a week but only get an average fee rate because they're not particularly known for anything outside their client base. And they might well not manage to get booked up for all those days anyway.

On the other hand, a “high leverage” consultant might spend 2 days a week working on marketing to increase their visibility and only 2 days a week billing. But that marketing means they become known as a leading expert and they can charge 5x the fee rate of the “low leverage” consultant. Net net they work less and earn more.

That's a hypothetical example, of course, but very much achievable. If you invest time in marketing to become seen as a leading expert or authority.

And that's the thing most people miss. Authorities don't appear out of nowhere. You've got to work at becoming seen as an expert.

Skip that marketing work and you'll find yourself forever frustrated by the feeling you deserve much higher fees, but rarely getting them.

Next time we'll look at the second high-leverage business model: leveraging other people.

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Building a “life friendly” business

Posted byIan Brodie on January 16th, 2022.

This is the first in a short series of posts about building a “life-friendly” business.

One that's not all about massive growth, scaling and empire-building.

But instead is about earning a good living without working too hard, and focusing on the things that make life worthwhile.

A business that can stay small, but reward you richly.

I'm not saying this is the best way to run your life or business. And certainly not that I've got it all figured out. I'm just sharing ideas and thoughts on what's working for me and what I'm learning on my journey.

My hope is that you find it useful and it connects with what you're hoping to achieve yourself.

I'm going to start by summarising four big pillars that I think you need to build a life-friendly business. In future posts I'm going to expand on each one and talk about some of the principles and practices that make running this type of business easier.

And I really must stress this is a bit of a “learn as you go along” stream of consciousness rather than a polished guide. But I hope it helps.

The first key pillar is that you need to be following a high-leverage business model.

It sounds obvious when you think about it, but if you want a business where you don't have to work long hours to make a decent living then your business needs to be set up so that you can earn what you need in a few days a week. 

There are three tried and trusted ways of doing this:

1. Charge rockstar level fees – so you only have to do billable work for a few days a week to hit your targets. Value based pricing or payment by results are essentially variations of this – you're disconnecting your fees from your hours to allow you to earn more while delivering great ROI for your clients.
2. Get others to do the delivery work for you. This is the classic professional service firm “pyramid” where the partners sell and supervise the juniors, while getting the majority of the rewards for the work delivered.
3. Create and sell “products” (like online courses) that aren't dependent on your time to deliver them and so can earn more without stretching you timewise. This is my personal preference and as I'll explain in an upcoming post, fits best with the “life friendly” approach. For me at least.

The second pillar is that you need to be selling a “high want” product.

It doesn't matter if you know your client really needs what you're offering. If they can't see it, if it's not a big, urgent “close to the jugular” problem for them then it will take lots of time and energy to persuade them to buy.

And if you want to earn a great living without burning yourself out, you don't want to be spending half your time persuading people they really need something they don't think they need.

Your third pillar is to nurture a fan-level following.

What I mean by that is you need enough people who already trust you, like you and want to buy from you that when you offer something they want, half the battle is won.

It's the complement to having a high-want product. A fan-level following means you have people who would prefer to buy that product from you. 

You don't need millions of them. But you need enough of them so that you're not forever scrabbling around trying to find an audience and trying to convince them to buy from you.

The fourth pillar sounds a bit boring, but it's vital. It's to be productively prolific.

That fantastic leveraged business model, super attractive offer and wonderful people who want to buy from you all gets sabotaged if it takes you months to get a product out of the door or days to create a little marketing video.

High leverage needs you to be able to do the right things (for you) fast and effectively. Otherwise that lovely free time you've earned gets burned up while you agonise over an email or a blog post.

I'm sure there's more than these 4 of course. And I'm sure that you've got your own experiences and insights too.

But I've found that focusing on a small number of variables helps to get a grip on things and make big improvements. So my next posts will expand on each of these pillars and give some tips on how to make them work.

I hope they'll help.

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An Alternative…

Posted byIan Brodie on January 9th, 2022.

Is it too late to say Happy New Year? I hope not. I kind of enjoy it.

I've been thinking about the year ahead, as you do at this time. And I've been reflecting on how so little of what others seem to be writing and advising about the upcoming year connects with me at all.

I don't know about you, but all this talk about scaling and massive growth and building an empire just leaves me cold.

It reminds me a bit of how ambitious I was when I was younger. About how I was going to get promoted and run my own division. Then when I became a consultant I was going to make partner super fast, and then become a practice lead and then…

…and then I kind of grew up.

At some point, it just dawned on me that all of that was about proving myself to the world. About what others thought of me. All of it was unnecessary. And none of it made me happy.

What made me happy was time with family and friends. Doing things I enjoyed. Working with good people on projects I felt meant something.

When I grew up a bit my goals shifted away from all those big, bold ambitions and focused more on earning a good income without working too hard or for too long, so I could spend more time actually living.

I've done pretty well at that. And this year I've been thinking about the sort of business and the sort of activities that allow you to do it.

An alternative to the “scale your business” dogma that seems to dominate entrepreneurial advice these days.

In the next few weeks I'm going to be sharing more about this kind of approach to business that's worked well for me and for others.

But until then, I wish you all the best for a brilliant new year.

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At Christmas: Avoid Silver Bullets

Posted byIan Brodie on December 19th, 2021.

It's that time of year when we look back at how things have gone and think about what we might do differently next year.

And obviously, it's the time when people try to sell us their latest “best year ever” silver bullet.

I've bought my share of silver bullets in the past. But my experience has been that it's not the big things (that often we never implement) that make a difference for most of us.

It's doing a handful of things consistently better.

Keeping in touch with a few more people a bit more often.

Making sure our products and services are just that bit more focused on the biggest, most urgent issues our clients face.

Making it a bit easier for people who are close to being ready to buy to take a first, low-risk step with us.

Sharing our content a bit wider and a bit more often.

Cutting out some less effective things you do out of habit to make room for things that work better.

Changes like this can be the difference between a so-so year and a great year for many of us.

And they don't need a silver bullet, some huge complex “funnel”, massive expenditure or doing stuff you don't feel comfortable with marketing-wise.

They're easier. But they're also harder because you have to stick at it consistently rather than just shelling out some cash and hoping it will all change overnight.

I'm sure silver bullets work for some people. But my money's on consistent implementation of small improvements for most of us.

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Do you make the same mistake as my coffee bean supplier?

Posted byIan Brodie on December 12th, 2021.

I'm really frustrated by the firm that I get my coffee beans from. More of that in a minute.

Last week I talked about how I really don't enjoy self-promotion and gave a couple of strategies for promoting without being self-promotional.

I got a lot of lovely replies to that email and a lot of empathy.

So in this message, I'm going to talk more about things you can do to promote your business without being pushy or self-promoting.

And my coffee supplier is a great example of what not to do.

Every couple of weeks I get a parcel from them through the post with a couple of bags of freshly roasted coffee beans in it.

The coffee's great and I drink way too much of it.

They rotate through different varieties and always enclose a little card with a bit about where the beans are from and what the taste is going to be like.

A bit pretentious perhaps, but fun.

But what they never do is attempt to sell me anything more.

I don't know whether they think it's impolite or wrong somehow. Or if like me they don't like being self-promotional.

But the reality is that I would be quite keen to get more from them.

A special Christmas variety would be nice – I'd buy that.

As I would pretty much any special blends they offered.

Maybe even some nice biscuits to go with the coffee. Or nice coffee cups. Or any of a ton of different coffee-related products that someone who's demonstrated they like coffee would appreciate.

But instead, nada.

They actually make it difficult for me to buy more from them even though I'd be very willing to do so.

I've just been to their website and it turns out they do compostable nespresso pods I could get as a gift for my brother. Or gift subscriptions for beans so I could get him to convert to the real stuff.

But have they told me about this or the other new products they've introduced recently?

Nope.

And truth be told, most of us fall into the same trap too.

How often have I sent out an email newsletter without a link to one of my products you can buy?

Lots.

How often have I produced great content for my website or social media without a call to action to take our relationship further?

Lots.

How often have I helped someone with ideas and insights but not followed up by asking if they wanted to discuss it further – maybe on a paid basis?

Lots.

We're all taught we need to add value in our marketing. That's a given.

But the purpose of adding value is to generate pull for our services. And we need to make it easy for people to connect with us or buy from us when we trigger that pull.

So whenever you create something or do something that adds value, ask yourself “how can I make the next step to working with me easy?”

Who knows. Maybe my coffee supplier will read this and drop a little leaflet about a special new blend I might like in my next delivery :)

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How to market if you hate self-promotion

Posted byIan Brodie on December 5th, 2021.

I got interviewed for a podcast this week.

It was slightly weird because instead of talking about an area I was an expert on, I was asked to talk about my “entrepreneurial journey”.

I have to admit I didn't find it easy. I just don't see myself as an entrepreneur.

Calling me an entrepreneur is a bit like calling someone who jogs twice a week an athlete I feel. 

Anyway, we were talking about mistakes I'd made during my business career and I mentioned that one thing I struggled with (and still do) is self-promotion.

As I talked I realised that the reason for “not putting myself out there more” wasn't some kind of fear of failure or rejection. It was simply that when I see people who self-promote a lot I just cringe. Frankly, I don't like them.

Sorry.

So the reason I don't humblebrag or plaster my Linkedin feed with gushing testimonials isn't that I don't think it works. It's simply that that's not the person I want to be.

Maybe it's just me. Maybe it's a British thing. Or maybe you feel the same?

Maybe you don't want to be the business equivalent of the boorish guy down the pub telling everyone how brilliantly he played at 5-a-side. Or the over-competitive parent telling everyone who'll listen how smart little Johnny is and how he's way ahead of everyone else in his class.

Maybe you want to be a humble person. A person whose achievements speak for themselves.

Unfortunately, achievements tend to be quite quiet. You need to do something to get noticed and to get the attention of clients.

So are we faced with a choice between feeling good about ourselves and getting noticed?

Luckily, I don't think so.

One thing I've found that works even for those of us who hate self-promoting is that instead of promoting yourself you promote your ideas.

Promote your expertise. Your breakthrough thinking. Your better way of doing things.

I'd find it impossible to talk to a stranger about how great I am at marketing and how they'd benefit from working with me.

But I'm very happy talking to them about Value-Based Marketing and how it can help them. Or the 3 steps to building authority. Or the keys to successful email marketing.

In fact not only am I happy talking to them about those ideas that could help them – I feel good about it.

Which means I'm likely to do it and to do it well.

And if those ideas click for them. If they implement them and get results…

…then it's done a lot more for me than any claims I might make about how great I am or any testimonials I might wave in front of their face.

It's easily enough to fuel a successful business. Maybe even to the level where I'd consider myself an entrepreneur :)

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Me and Jackie Weaver down by the Schoolyard

Posted byIan Brodie on November 28th, 2021.

Christmas has arrived here in Handforth.

It's snowing today. And last night we went up to the village to see Jackie Weaver switch on the Christmas lights.

Jackie who?

If you're not from Handforth you might not remember, but back in February a video of a disastrous Handforth Parish Council Zoom call went viral.

There was name-calling, shouting, swearing, all sorts of misbehaviour. And Jackie Weaver was the calm-headed clerk who'd been called in to sort out the toxic mess.

She was famous for 15 minutes (well, more like 15 days) and interviewed by all the national newspapers and TV. She even has a book out for Christmas.

Of course, the world moved on from Jackie and sweary Alan's iPad. Other things grabbed the headlines.

But if you're from Handforth, you're not going to forget. And thankfully we had the good humour to invite her to be our celebrity Christmas-light-switcher-onner.

By now you're probably wondering “is there a marketing lesson in this Ian?”

And I think there is.

Because it shows that while fame is fleeting, “local” celebrity is a lot longer lasting.

Handforth remembered Jackie Weaver because she's relevant to us.

And if you can stand out in some way to your audience, they will remember you. As long as you're relevant.

There are three big triggers that get things to stick in our memories:

• Novelty and Difference
• Repetition, and
• Relevance

We remember things that are a huge surprise or really stand out because our initial impression is so vivid.

We remember things that are repeated because the memory gets reinforced with each repetition.

And we remember things that are relevant to us because they're important, and they connect with our pre-existing memories.

If you want to be remembered by your clients these are the variables you can play with.

A lot of focus in marketing is put on being different and being new. But don't overlook the power of just keeping in touch regularly. And that by being relevant to your clients, by focusing on them specifically rather than the world in general, you'll be more memorable to them.

Jackie Weaver made a big splash nationally. But it's Handforth that remembers her, because she's more relevant to us than anyone else.

How can you make sure that you seem more relevant to your ideal clients than anyone else they might be talking to? It's a big key to having them remember you when they need help.

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Familiarity breeds?

Posted byIan Brodie on November 14th, 2021.

I drove Kathy to the train station early doors yesterday. She was meeting up with some of the folks she'd done her masters with a decade or so ago.

I haven't done much driving recently for obvious reasons.

In fact, I went over a year without needing to fill up the tank. And it's been nearly two years since I drove this particular route to the station.

I was mildly shocked at how much I'd forgotten the route.

I couldn't remember which lanes were right turn only and which were straight ahead. Or quite where the semi-concealed entry to the station car park was.

And I found myself having to concentrate much harder than usual just to drive. I was quite worn out by the time I made it home.

It's a bit like that with marketing.

If you only write emails once in a blue moon, each one is hard work and you forget the shortcuts and the right buttons to press to get things set up.

If you don't do Facebook Ads week in, week out, then the interface and algorithm will no doubt have changed since the last time you did them.

If you haven't done a webinar or live presentation for a while then the next one you do won't be anywhere near as effective as when you do them regularly.

It's why trying to do too many different things in marketing is always a mistake. You end up being rusty and less than effective at all of them.

Of course, you have to experiment a bit and try a few things to find out which works for you.

But once you've got something that works, stick to it.

Don't get grass-is-greenered by the latest shiny technique or because some marketer somewhere tells you they're “crushing it' with a tactic you're not familiar with.

It's almost certain that the fancy new approach won't work as well for you – and especially if you split your focus and try to do too many things.

Much better to do one or two marketing things really well than be mediocre at 3 or 4 of them.

Because familiarity breeds competence.