How To Give Yourself A Raise This Year (In 4 Steps)

[00:00:00] Brian: In this episode, I'm going to walk you through how to give yourself a raise as a freelancer, because freelancing is nothing like having a day job and a day job.

[00:00:06] Brian: If you want a raise, you have to suck up to your boss. Do a great job at work. I don't really know what you do to get a raise. Cause the last time I got a raise was when I worked at GameStop for two years. And I went from five 15 an hour up to 50 cents an hour. So a whole 35 cent raise, something like that.

[00:00:23] Brian: So I don't really know what you're supposed to do to get a raise as a career man, but I am sure that's how you do it. Suck up, do a good job, your annual review, and then hope that you get that three to 5 percent bump in your pay, or maybe you're just Maybe you get a promotion to that next level up in your career ladder

[00:00:36] Brian: in broad strokes. That's what it's like to get a raise in a day job. You just do your best work. You hope they give you a raise and you have no direct control over whether or not you get a raise or not. It's literally up to your boss or your boss's boss.

[00:00:49] Brian: freelancing, however, freelancing is amazing because you actually get to reap the benefits of doing a good job. You have direct control over what you were paid. And so if you have an amazing performance, and you do a [00:01:00] great job at executing all the things you need to execute as a freelancer.

[00:01:02] Brian: then you can get amazing pay.

[00:01:04] Brian: On the flip side, we can also just coast, like many people do with their day jobs, and then you start to see your incomes stagnate or go down.

[00:01:10] Brian: So the caveat, obviously, as a freelancer is, if you want to give ourselves a raise, we can at any point. As long as we know how to, in this episode, I'm going to walk you through a whole framework that is not from my brain.

[00:01:20] Brian: It's from people way smarter than me on how you can give yourself a raise, how to actually figure out what you need to do.

[00:01:25] Brian: If this is your first time listening to this podcast, first of all, welcome. Hi. Hey, hello. Glad to have you here. This podcast is for you. If you are a. Creative freelancer, you offer creative services and you want to make more money without selling your soul. And maybe you want to give yourself a race today.

[00:01:37] Brian: If that sounds like you, you're in the right spot

[00:01:39] Brian: from our returning listeners. You've probably heard bits and pieces of what I'm about to talk about today, but I want to bring it all into one nice, neat package in one episode for you. Because we're going to be talking about the least sexy sounding thing on earth, but it gives you the sexiest thing on earth, which is a race.

[00:01:52] Brian: So let's see if we can stomach the unsexy so that we can get the sexy. And that's, business in a nutshell. It's doing a whole bunch of stuff. Some of which we like to do some of which we don't [00:02:00] like to do, but we all have to do it because when we sign up for freelancing, we sign up for a whole bunch of stuff, whether we like it or not.

[00:02:05] Brian: And the sooner we can admit that to ourselves, the sooner we're going to have a stable, reliable, profitable business. And it doesn't mean you have to sell your soul. It just means you have to do stuff you don't like to do sometimes. So that thing I'm going to talk about today is something called the Theory of Constraints.

[00:02:17] Brian: I first learned about the Theory of Constraints from Alex Shamosi, love him or hate him. He's a smart guy. He knows how to build businesses. and I think he's learned about through multiple sources.

[00:02:24] Brian: Like many of us have. I think he turned me on to a book called the goal a process of ongoing improvement, and it is the worst book cover you'll ever see. We'll put the link in the show notes

[00:02:33] Brian: and if you see this ugly book cover, it just says the bestselling business novel that introduced the theory of constraints and changed how America does business over 10 million copies sold.

[00:02:41] Brian: The theory of constraints was first created for manufacturing businesses, as far as I know. But we are not manufacturing businesses. We are freelancers. So I want to dumb this down as best as I can, because I didn't fully follow all the things in that book. And it ultimately doesn't matter because the theory of constraints, if you just boil it down to simple freelance terms It's to say your income is capped [00:03:00] by one limiting constraint at a time.

[00:03:02] Brian: if you flip that phrase around or that terminology around, it also means that if you can identify and relieve that one bottleneck, that one constraint in your business, you can see a pay bump in your freelance income.

[00:03:11] Brian: And that's what we're going to talk about today is how do we identify this? How do we actually fix these things?

[00:03:15] Brian: And the best part about this, in my opinion, is that as freelancers, we have very limited resources and time and energy and money to fix things in our business. And so when we see the millions of things we could fix in our business, which will never be a small list, it will always be this massive list of all the things we know we're supposed to do.

[00:03:33] Brian: We've got to do social, got to run paid ads. If you're going to do paid ads, you're going to do a new website. You got to get funnels up, maybe a lead magnet. Maybe you're going to do a website revamp. Maybe you're going to do cold outreach, warm outreach.

[00:03:43] Brian: Pricing revamps, packaging revamps. I'm going to launch a recurring revenue thing. The sky's the limit. There's a million things we could do at any given time. However, with a theory of constraints, only one thing matters. and that to me brings simplicity and simplicity is something we all need as freelancers because we can get quickly overwhelmed with this long list [00:04:00] of things that you hear from other people, including this podcast.

[00:04:02] Brian: And instead it focuses on this one thing, this one constraint in our business that if alleviated will raise their income.

[00:04:08] Brian: now there can be a whole lot of different constraints in your business.

[00:04:11] Brian: and I want you to just think through in your business, which one of these constraints do you think is the thing that's literally holding back your income right now? What's this one thing that if we were to fix this one constraint, you're able to actually increase your income, AKA give yourself a raise this year.

[00:04:24] Brian: This first constraint is for my high earners. You are making over six figures. You're usually booked solid. that first constraint you're going to have to find a way to fix if you want to get your income up is time.

[00:04:34] Brian: when we are successful, when all cylinders are running, time will always be the limiting factor in every field in this business because typically we are the ones doing all things. We are the ones having the sales conversations. We're the ones generating the leads.

[00:04:44] Brian: We're the ones fulfilling all the work. We're the ones communicating with clients. and you can quickly see that even a. Quote unquote, perfectly run freelance business, which doesn't exist that has all things lined up well for clients to go through a wonderful marketing journey, a wonderful sales journey, a wonderful onboarding journey, a wonderful [00:05:00] fulfillment journey, and a wonderful follow up to get them back working with you again, or retaining on your roster.

[00:05:04] Brian: If it's a recurring revenue, all these things can be running well, but eventually you will run out of time as a freelancer. So that is one of the major bottlenecks that freelancers will run into. And we actually have a whole episode on this. way back in episode 216, which came out back in September 2022. Jeez. It's called how to spend less time doing the stuff you hate. It's called the easy eights framework. It's kind of the subtitle of that episode and walked you through a framework. That you can do to get more of your time back.

[00:05:29] Brian: So that's the first of what will be many constraints in this episode, but time is a huge one for people, especially the higher earners.

[00:05:35] Brian: The next area to look to is what I call the five core functions of business. You've heard this in many episodes before in various iterations, and I've even had entire series on almost every one of these core functions. But the five core functions of business are lead generation, lead nurture, sales, fulfillment, and retention.

[00:05:52] Brian: These are the five major things. And it's generally in that order. Assuming you have time to work on your business, you have time free that you can do other things in your business to [00:06:00] fix things, to bring on more, clients, assuming you have that, and that's not your limiting factor. The next we look to is these five core functions.

[00:06:06] Brian: And we can look to, again, top to bottom lead generation, how many leads are coming in the front door? How many people are filling out inquiry form or how many people are downloading a lead magnet you might've created? How many of those you're generating every month? For many people, this is the actual constraint in their business.

[00:06:19] Brian: They are doing nothing for lead generation whatsoever. And if you don't have leads coming in, AKA seeds planted in the ground, you're not going to have anything sprouting on the back end, AKA money in the bank. So that's the first of the five core functions, which is lead generation.

[00:06:31] Brian: We have a whole series on this

[00:06:32] Brian: called the lead generation series. This starts back on episode 277. the title is the secret to consistent clients and it has the lead generation series. You can just search the title and you'll find it. You can also go to any show notes page for any episode ever, just by going to six figure creative.

[00:06:45] Brian: com slash episode number. So that episode number is slash two seven, seven. The episode you're listening to right now is slash three Oh eight. And that's probably the best place. I'm going to mention a bunch of links, a bunch of series in this episode, books, things like that. So instead of trying to write it all down or go to it all right now.

[00:06:59] Brian: just [00:07:00] know that you can go to six figure creative. com slash three zero eight, and it'll have links to everything I mentioned in this episode, including that ugly book cover that I mentioned a second ago. So lead generation, we have a series on that.

[00:07:09] Brian: That's one big constraint in freelance businesses. Next is lead nurture. We get leads, right? get leads in the front door. Unfortunately, not all of those are ready to buy right now. So what do we do for those who are not ready yet? We nurture them over a long period of time. They can take. Days, weeks, months, sometimes years before that person can be ready to buy for many reasons.

[00:07:27] Brian: And if you are not nurturing that lead, building trust, building relationship over a long period of time, then you're going to miss out on clients. So Many times this can be the bottleneck in your business the constraint and I see this a lot less than lead generation being the issue But this can sometimes be an issue, especially if you are generating leads at a high volume We need to take lead nurture a lot more seriously for many people likely not your bottleneck right now, though So I'll move forward

[00:07:48] Brian: just note. We do have a whole series on this back starting at episode 281 The the four building blocks of turning strangers into clients the lead nurture series it starts there. It's a three episode series

[00:07:56] Brian: So core function one lead generation core function two lead nurture core function [00:08:00] three is sales of all the inquiries and sales opportunities that we have how many of those do we actually close many of you struggle to close clients you get a lot of pricing objections people beating you down on pricing trying to go to negotiate with you going with other competitors and so if close rates are not 30 to 50%, that's generally a big bottleneck in your business. I've seen people that have really low, 15 percent close rates and that's not good. And then I've also seen people that the close rates really high, which is actually also not good. So if your close rate is too low or too high, this is a problem in your business that needs to be addressed.

[00:08:30] Brian: we have a series on this starting in episode 285, starts the sales series. The episode title is the entire freelance sales process from beginning to end. And there's two follow up episodes on that.

[00:08:39] Brian: And if you're wondering why I say having a high close rate is a bad thing, we actually have a whole episode on that on episode 224, it's titled why your high sales conversion rate is actually a bad thing. I'm going to say something really quick. I've just noticed this. I did not plan for this, essentially just to be an episode where I talk about other episodes.

[00:08:54] Brian: But I've got a lot more to talk about in this episode. So I'm trying to just breeze through some of these constraints that I've already covered. And when [00:09:00] you're 308 episodes in, I've got to refer to the backlog. There's so much content out there that many people have never heard. And I want to make sure that, you know, it's there so that when it comes time, if this is the bottleneck in your business, you know where to go as a, first step, a first resource to start fixing and working through these issues.

[00:09:12] Brian: So lead generation, lead nurture sales. Those are three big areas. That could be a limiting factor on your business. That could be the constraint that if alleviated, if you get your, close rates up, if you're able to nurture leads, so you, the more of them reach out to you with, genuine interest and are ready to buy, or you generate leads in the first place.

[00:09:28] Brian: people even know you exist. Those things can be fixed to give yourself a raise. The fourth of the five core functions is fulfillment. you do to actually fulfill on the thing that you're, hired to do?

[00:09:37] Brian: can, this can be anything from your skills as a creative, the actual ability to do the work and do it well to efficiency, to processes, to systems, to teams, to help onboarding, revisions.

[00:09:47] Brian: This is. An underappreciated part of freelancing, because if you listen to the show, you tend to be more entrepreneurial. You want to listen to all the things about sales or lead generation or client acquisition, and you forget that there's a lot to be done [00:10:00] in the actual fulfillment process in order to. Impress your clients make them want to come back to you again and again and again and refer all their friends to you wouldn't you know it we have a whole series on this as well it's called the infinite client series it's actually our longest series we've ever done it starts on episode 291 and ends on episode 299 Long series and the first episode is called How to Create a Viral Freelancing Business That gives You Infinite Clients.

[00:10:22] Brian: Spoiler alert, it has to all do with fulfillment.

[00:10:24] Brian: Now, the last part of the five core functions, and I have way more than just the five core, that's why I'm breezing through this, but the last potential bottleneck in your business constraint that needs to be alleviated in order for your income to go up is retention. Retention is something I don't talk about much on this show because retention is usually referred to for recurring revenue businesses like software consultings with retainers membership sites, anything where it's like a monthly recurring thing.

[00:10:46] Brian: And I did have a series on this where we talked about recurring revenue as a freelancer and how powerful that can be. And some of my most successful clients are the ones who actually have recurring revenue in their business.

[00:10:55] Brian: But retention is more than just for recurring revenue freelancers who have subscription or retainer [00:11:00] packages. This is for any of us who want Who clients come back to us again and again,

[00:11:03] Brian: retention is literally just how long does the client stay with you on our subscription or recurring package? Or how often do they come back to you as repeat clients? if it's a service, they're going to need more and more and more in the future. An easy example this is podcast production is usually a recurring service every single month or every week.

[00:11:18] Brian: A podcast is putting out episodes and if you're a podcast producer and you're helping record and edit the show and master it and release it make social clips, all those things, that's a recurring revenue thing. How long does your client stay with you on average, how many months or how many years?

[00:11:30] Brian: That's what we're talking about. Retention here. The longer a client stays with you, the more that client is worth and the less you have to go out and pay for through marketing or pay for via time more clients. So that means you have a better, more efficient business. If clients stick with you longer, and it could be way more profitable, especially if you're hiring out help.

[00:11:45] Brian: The worst thing possible is to have a recurring revenue business where clients churn after three, four or five or six months. A good rule of thumb is 5 percent or less monthly churn on a recurring revenue business, means you're retaining 95 percent or more of your clients every month.

[00:11:58] Brian: A churn rate between five and [00:12:00] 10%, meaning you're losing five to 10 percent of your clients every month. Is red flag and then a 10 percent or more churn means stop everything you're doing and let's figure out what's going wrong in your business. Now, most of you don't have that. So if we look to the other side of things, my background is a music producer.

[00:12:14] Brian: I don't have recurring clients that are with me every month. I have reoccurring. That means they're coming back to me again and again in a timeframe that I can't plan for necessarily, but it doesn't mean that I don't get recurring clients. So a good way to measure this is

[00:12:27] Brian: how many of your clients each year are repeat clients. So what I generally see is a really good freelance business that has a good fulfillment. The clients are happy with, generally speaking, 50 to 70 percent of your clients will come back to you again and again and again. So any given year, at least half, usually more than half of your income is from clients that you've worked with previously. That's a really good sign. It also is a really bad sign. If that means that you're just not getting any new clients and the only people you get are the old ones coming back to you, but a good healthy business has a mix of brand new clients that came to you this year and old clients that came to you from before that are coming [00:13:00] back again and again and again.

[00:13:01] Brian: So that is retention for freelancers. And that is the summary of the five core functions. Generally speaking, you work on it in that order. You first want to make sure you're getting leads. And once you're getting leads that you're actually nurturing those leads. And once you're nurturing those leads that you can actually close those leads on a sales system that you have set up, whatever kind of sales process you have and then you can fulfill on the work in a timely manner that keeps the clients happy.

[00:13:21] Brian: So they are retained for life, preferably. Those are the five core functions, very powerful stuff. And generally only one of those is the bottleneck in your business. However, there's way more constraints in this because it's freelancers. We have a lot of things to worry about, and I have to throw a bunch more things at you because if you start identifying. One of these things you say, Oh, lead generation is the thing that I struggle with. I need to fix that. You rush to that ignoring all the other things like time or some of the other stuff I'm going to talk about today. You're just going to ruin your business. You're going to be putting a lot of time, effort, energy of what you have very little because you are a freelancer with very few resources.

[00:13:53] Brian: And so you're working on the wrong things and then you're not going to get results. Okay, you're not going to get a race in your business. So that leads me to the next potential [00:14:00] constraint in your business. And we call it AACV. What is AACV? Average annual client value. What is one client worth to you in a year?

[00:14:07] Brian: And usually we like to compare this to not just average annual client value. How much does the client worth, But also how many clients can I actually work with in a year? because of a client's worth a thousand dollars to you, but you can only work with 10 clients a year because of capacity issues. Okay. How much time it takes to fulfill on a client. That means you can only ever make 10, 000 a year.

[00:14:25] Brian: So this is kind of a give and take the reason I look looking at this average annual client value Aka, how much is one client worth on average in a year span for your business and the easiest way to get this number? By the way Just look back on your last year's income Look back at how many clients you work with that year and divide those two numbers together if you had a hundred thousand dollars of income and you work with ten clients Then we know that every single client's worth on average about ten thousand dollars in a year and it won't be perfect But it's directionally accurate and that's the number I care about is just the directionally accurate number of your average annual client value.

[00:14:54] Brian: This number matters a lot because we know that if your average annual client value is 500. But you can get it up [00:15:00] to 2000 that's a 4x increase in your business. If nothing else changes and you 4x your average annual client value, you just 4x your income as a freelancer. If you even raise it 20 percent that's a 20 percent pay bump.

[00:15:11] Brian: This is one of those one small thing that can have a massive impact in your business as a freelancer. And there's a number of ways to do this. We can talk about this maybe another time,

[00:15:19] Brian: but if this is an area you think you need help with, go back to episode 265. It's called make your clients worth more money by avoiding these six mistakes. And that was our freelance fuck up series.

[00:15:29] Brian: So that's another additional constraint in your business to consider when we're looking at the theory of constraints. Remember, only one of these is a true constraint, only one of these. And if you can alleviate that one constraint in your business, you can say a usually sizable pay bump. I'm talking 20, 30, 40, 50 percent in a year span.

[00:15:45] Brian: The next constraint in your business is something I call whales. What do you mean whales? Whales are what I call big clients. Many times freelancers fall into this trap of working with whale clients because it feels like a lot of money and What they don't realize is many [00:16:00] whale clients clients signify Anywhere from 10 to 50 percent or more of your annual income.

[00:16:05] Brian: That is usually a trap It's a trap for a number of reasons one is at that level when it's like one clients worth half your income That is not a client. That is a boss. You just essentially have a part time job with no benefits

[00:16:15] Brian: You're a contractor not a freelancer. The next is If you lose that whale, you can see a massive, not raise, but a massive drop in your income. So when we consult our clients on this, we don't want to see any one client represent more than 10 percent of your annual income. If you have your business set up this way, you have more diversification so that if any one client leaves, you're not going to see a massive pay reduction.

[00:16:34] Brian: So whales represent a risk. Constraint and I can tell you I've seen this more times than I like to see people coming to me for coaching to help their business for client acquisition when they lose a well client and a well client makes it so that they lose 20 30 40 50 percent or more of their income in one fell swoop and they have no idea how to fix that that is too much risk side note This is Brian rant now a day job is even worse a day job is one source of [00:17:00] income you lose that one source of income you have zero dollars so that's another win for freelancing because you can have ten or more clients in a year And so no one client represents more than 10 percent of your income.

[00:17:09] Brian: Wonderful place to be. those are some of the big ones here. The ones that everyone likes to latch on to. The tactical stuff, the tactile things, time. I can, understand that. Lead generation, lead nurture, sales, fulfillment, retention. You can understand all those things.

[00:17:20] Brian: Average annual client value. You understand that. Wales, you get that. there's a few more and these are a lot less interesting, a lot less sexy, just as important and just as relevant and probably even more so for our freelance listeners.

[00:17:34] Brian: And these are the three things you're going to run up against when you have identified what you think is the bottleneck in your business, what you think is constraint that you need to alleviate to get this https: otter. ai

[00:17:47] Brian: I am in this point regurgitating what I have learned from Alex Ramosi,

[00:17:50] Brian: and as actually a matter of fact, by the time this episode airs,

[00:17:53] Brian: I will be in Vegas at their headquarters for an event, which is awesome.

[00:17:57] Brian: But there's three things that Alex Ramosi says that if you don't get what [00:18:00] you want, it's usually One of these three things is missing, if not all of them, skills, beliefs, or character traits. I'll talk through all three of these. I'm not saying I'm an expert in this, but I'm just telling you that these are real that will hold you back as a freelancer that are worth considering when we're talking through this theory of constraints thing, because it's more than just the tactical, tactile numbers and sense.

[00:18:18] Brian: These are the things that hold so many of us back. So let's talk about skills first. Obviously, your creative skills can hold you back. That can be a constraint that if fixed, improved you've gotten better at Photoshop, better at, After Effects, better at Pro Tools, better at whatever software, whatever, creative skill whatever it is you do.

[00:18:33] Brian: You get better at that. People recognize that. People come to you more. You make more money. But what other skills are there? We have a whole series called The Full Stack Freelancer.

[00:18:42] Brian: This is back in episode 235 and 36. why you don't need to be a better creative in 2023. It's called The Full Stack Freelancer. It just talks through All the other non creative skills you need to have as a freelancer in order to have a successful business. So there's all those skills. Great.

[00:18:55] Brian: Wonderful. But there's also things like this. How do you identify what the bottleneck is in your business? That's a skill. [00:19:00] That's a learned thing. Being able to actually critically analyze and have the self awareness of knowing what your limiting factor is, what the actual constraint is. That's a skill

[00:19:08] Brian: knowing how to fix things what you've identified something and what the actual constraint is, even knowing how to fix that is a skill or a series of skills. For example, if you find that sales is the weak point in your business, you should probably get better at sales and sales has a plethora of skills that you have to get better at and improve and acquire before that's going to be something that you are ever good at.

[00:19:27] Brian: So that's the skills portion of this Hormosy holy trio here of things to look at for constraints. The second one is beliefs. you've heard term limiting belief. It sounds fluffy. It sounds woo.

[00:19:38] Brian: But our beliefs are the assumptions and perceptions that we have about us, our surroundings, our environment, our industry, our niche, our clients. And when we have limiting beliefs that will genuinely hold us back. So when you say I suck at sales. That's a limiting belief.

[00:19:54] Brian: It can hold you back from ever even trying to pursue it. it can hold you back in a way that even keeps you from taking the steps necessary [00:20:00] to get good at sales. It doesn't mean it's not true. It doesn't mean you don't suck at sales. You probably do. No offense,

[00:20:04] Brian: but these limiting beliefs to progress in a meaningful, positive way. Another way of looking at it suck at sales, sure, would it be reasonable for me to believe?

[00:20:14] Brian: That I would be good at sales, given how much experience and time and effort and energy I've put into the skill. Or another way of looking at it is my sales numbers suck. I should get better. Sales is a slightly different approach. Here's another limiting belief. This is a genuine limiting belief. If I'm good at what I do, I shouldn't have to market myself.

[00:20:32] Brian: If you genuinely believe that you are never going to invest time, effort, energy, money, skills, into Anything in the first of the three five core functions lead generation lead nurture sales because you'll believe that my work can speak for itself I see so much of this toxic belief in freelancers that I talked to and it is absolutely a belief that holds you back Here's one more example just to really drive this home and I'll move on but all my clients are broke So I can't raise my rates or I can never charge that much or I [00:21:00] can never make this really work that's your true belief in your business, in your industry, in your niche, then you're not going to progress. you're going to be stuck at this level. You're not going to get to this level up here that you want to be at, and it's because a belief holds you back from developing a skill that will get you where you want to go.

[00:21:13] Brian: The third and final part of this kind of holy trio, I'm just going to name it that. is character traits. This one's a little harder to conceptualize,

[00:21:19] Brian: so I wrote down a definition here. It's, character traits are the aspects of a person's behavior or personality that influence how they manage their business and work.

[00:21:28] Brian: So that may not make sense to you, and that's okay, but I can guarantee you've seen the signs of this. Procrastination is a character trait. Lack of discipline is a character trait. Fear of failure is a character trait. And all three of these things hold freelancers back. Your fear of failure keeps you from ever trying something new because you just know you're going to fail at it or you're afraid to fail at it.

[00:21:46] Brian: You don't want to look stupid. You don't look desperate. You don't look dumb in front of people. And that fear of failure holds you back. Instead of imperfect action, you take perfect inaction. That's fear of failure. Procrastination, similar thing. We procrastinate ever starting the work. Usually due to some of these other things, [00:22:00] lack of discipline, lack of routine, lack of accountability, fear of failure.

[00:22:04] Brian: So these character traits can be true limiting factors in our income, where you might know that lead generation is the area you got to work on, but your skills don't allow you to fix that. And your beliefs don't ever allow you to get to the point where you're willing to fix that and invest the time, effort, energy required to fix those things.

[00:22:19] Brian: and maybe even your character traits hold you back from doing anything altogether because of your fear of failure, because of your procrastination tendencies, because of your lack of discipline.

[00:22:27] Brian: The thing about all of these is they can be undone. Limiting beliefs can be broken. Character traits can be, good ones can be gained and bad ones can be shed.

[00:22:35] Brian: if you struggle with any of these hormosy, holy trails, there is hope here. Don't, feel like you're without any hope whatsoever here, but now. Let's talk about how we can actually fix these things.

[00:22:44] Brian: It's one thing to know that these are the potential constraints in your business it's a completely other thing on actually fixing these.

[00:22:50] Brian: This is the same process I go through with my clients when it comes time to actually do this analysis on their business. The first is identify the constraint, if you're trying to figure out which of these constraints is [00:23:00] your limiting factor, it's usually best to start with time, really look at, do you have time to invest into fixing any of these other things we talked about?

[00:23:07] Brian: If you don't have time right now. It's usually best to fix that first, if you do have time, then start to look at the five core functions. And it's usually one of those is the real constraint in your business. And then later on, if you find yourself unable or unwilling to fix those things or do the things or do the work you need to fix those things, it's likely going to be one of the Holy Trio issues Skills, beliefs, or character traits that are holding you back. But first is just identify the constraint and then be sure to measure it in some way. We need a before state. What's the current state that it's at that we need to improve from. And if it's zero, then just write zero. If it's some other number, maybe you're working with an average annual client value of a thousand.

[00:23:42] Brian: You're trying to two or 3000. Maybe you're getting five leads a month. You're trying to get to 50 leads a month, whatever that number is. Just start measuring it. That's the first thing you cannot fix what is not measured in some way shape or form step two is Find the root cause of this issue This is where skills come in This is where outside help comes in [00:24:00] knowing what the root cause is is how we fix this issue one thing to treat the symptoms, but if we don't treat the actual root cause of it We're never gonna alleviate it for good.

[00:24:08] Brian: So one easy way to do. This is the five eyes exercise

[00:24:11] Brian: Looking through. Why do I have the constraint? You'll come up with a blanket answer. That's a surface level. Why is that an issue? Another surface level answer. Why is that an issue? And you keep going down down, down, down, down. And then you might actually come out to one of those Hormozy Holy Trio answers.

[00:24:24] Brian: I lack the skills I just don't think that will work in my industry. That's a belief or a character trait. I just know that if I try to do this, if I sign up for the gym, I will just never go. That's a character trait. But the five eyes exercise is just a really good first step and figuring out what the root causes.

[00:24:38] Brian: So one example might be that you are looking at your, Average annual client value. And you're saying it's too low because my rates aren't where they need to be. Why? Because my clients are broke. Ah, limiting belief or the market that I'm in genuinely, truly does not support the price that I need it to be at.

[00:24:54] Brian: Okay. So that's a potential root cause. So now we need to look at, is there any otherwise? Why are [00:25:00] you in the market that you're in? Because

[00:25:02] Brian: that's what my portfolio is attracting right now. Ah, so maybe we need to update our portfolio to start attracting a different market who can pay more so we can get our average annual client value up. you see how the problem starts to change as we get deeper and deeper into the true root cause.

[00:25:14] Brian: No, it's not the greatest example, but at least get you through the train of thought that you need to go through to start doing this. So the first step identify the constraint. The second step is find root cause. So the five wise exercise. Step three is develop a plan to fix it.

[00:25:24] Brian: the plan to fix it can be a number of things. You might know exactly what to do top to bottom, make a new portfolio, but many times in order to develop the plan, you need to fix the problem that constrain your business. You might need a bunch of new stuff. You might need new skills that you have to acquire and develop and hone and improve.

[00:25:40] Brian: You might need a new hire, someone to help. Maybe alleviate time in your business so you have more time for you to do these other things. Maybe you need new tools. There's something in your business that could be improved or made more efficient or made better or made clearer to you or even be able to measure something.

[00:25:53] Brian: maybe new projects you need to take on. Many times it's just a big project. It's a number of things you need to fix in your business. it might [00:26:00] be that you need new help. There might be some outside perspective that you need from friends, family, colleagues, peers, mentors, coaches. Any of these things,

[00:26:08] Brian: whatever you got to do to develop a plan to actually fix the root problem, the root cause, and then the fourth step is to implement and measure progress. as you're going through and implementing the fix, you've got to be measuring along the way and just know that massive change in your business can take time.

[00:26:23] Brian: It may feel like it's taking forever, but when you zoom out and look at how long it takes to get a raise in a day job year or years versus how long can take to get a raise in your freelance business. A month or months, sometimes a single decision, especially when it comes to pricing that people mess up pricing so much, just by bumping up your pricing 50 percent you get a massive raise.

[00:26:42] Brian: It can be as simple as that sometimes.

[00:26:43] Brian: But over time as you're measuring this and you're watching what you're doing and how it's affecting the number you're trying to look at. Whether it's your, again, average annual client value or it's your time to deliver a project or whether it's your retention rate or new leads every month, you're trying to create a new [00:27:00] baseline, whatever the old number was.

[00:27:01] Brian: That's the old baseline. Maybe your old client value was two grand. Maybe your old monthly inquiries for your business was eight. Now you're, you've worked it up to 16. You've two extra income in that case, if all other things are equal, or maybe you, your old average annual client value is 2, 500.

[00:27:15] Brian: And you got up to 3, 500 now, that's a 40 percent increase in your income right there, that one change.

[00:27:21] Brian: But if you put in the work, you have the skills, you have the help, the team, the people you around you and you measure and you implement and you measure and implement and you measure and implement, you fix things and you measured over time, over a relatively small time horizon, you can make massive changes in your business.

[00:27:34] Brian: now a reminder, there are a million things you could fix in your business. At any given time, there's a long list in my head and written down in different places for my own businesses that need to be addressed, but there is only one thing in your business right now that needs to be fixed.

[00:27:46] Brian: Only one constraint. That's the whole theory of constraints. And once you alleviate that, another one will pop up. Once you figure out lead generation, eventually you'll learn that you're actually bad at sales and that's the new constraint that you need to alleviate. And if you can continue to go through this cycle.

[00:27:58] Brian: Every year, [00:28:00] find the constraint, fix the constraint, find the constraint, fix the constraint. It's literally whack a mole. If you can do that over time through many iterations, you're going to see your income continuously rise until you hit a true ceiling in your freelance business in which you have a few options.

[00:28:13] Brian: At that point, we have a episode on graduating from freelancing.

[00:28:16] Brian: on episode two 70, the three best ways to graduate from simple freelancer to two entrepreneur. With multiple income streams that only comes whenever you've hit that true bottleneck in your business

[00:28:25] Brian: So if you know what the constraint is and you know how to fix it then just go do it and when you do it, congrats, you will get a raise in your business, but if you can't find the constraint You can't fix the constraint. You're not sure how to fix the constraint. Maybe it's a skill you lack. Maybe it's character traits that are holding you back. this is something we can definitely help with. We've done it with so many people at this point finding these, constraints and alleviating them is what we do.

[00:28:47] Brian: So if you need help with this. Especially when it comes to those five core functions of their business or your average annual client value, just go apply to see if we can help by going to six figure creative. com slash coaching.

[00:28:58] Brian: Fill that out. It's a short [00:29:00] application that gives us enough information to start the conversation with you to see if it's something we can help you with.

[00:29:04] Brian: But that is all I have for this episode. Thank you so much for listening to this episode of the six figure creative podcast. See you next week.