Last week’s post on recurring revenue for freelancers was my most successful yet. It was the most read and replied to newsletter since I started last August, and it netted tens of thousands of visits to my blog.

So why was my article on recurring revenue so successful? I credit two factors:

• Life is expensive. It just takes one stumbling block (a lack of clients, a few unpaid invoices, or getting sick) to screw up our ability to pay our bills.
• The idea of salary — or getting paid $X every month — is really comforting, but most of us don’t have that kind of security freelancing.

You probably know by now that I founded a product called Planscope. Can you guess what the #1 reason for canceling is?

It’s not “This app sucks!” or “I need Feature X.” Nope, the main reason most people cancel is because they go out of business. They get a fulltime job.

A lot of us are scared. We’re scared that our business isn’t sustainable, and that we could be out of work literally any day. And if you haven’t made the jump to freelancing yet, horror stories of client-less freelancers being harassed by creditors might cause you to rethink your move.

I remember back when I was running my consultancy. There were nights where I’d  be staring at the ceiling fan for hours, sweat running down my face, knowing that I probably wouldn’t be able to pay the 10 people who worked for me on payday.

The fear you have isn’t unique to you and your business. It’s the fear just about every business that makes its money off of transactions faces.

So enough of the fear-talk. You know that I think predictable, recurring revenue is the best way to counter the cycles of feast and famine…

…So today I want to tell you how to start making a few thousand dollars of guaranteed income more per month. (And you could probably get your first deal by week’s end.)

1. Your clients will be willing to add you to their monthly budget if you can provide continuous value to them each month.
2. What do most clients value? Insurance and Increased Efficiency.
3. Examples of Insurance: Apply security patches immediately, be a smart-person-with-FTP-access who can jump in should something catastrophic happen, babysitting their website and ensuring backups, etc. happen as expected.
4. Examples of Increased Efficiency: 99.9% of public facing websites can be improved. But improvement takes data, and collecting data takes time.
5. Identify Key Performance Indicators (KPIs) that affect the revenue (or whatever’s important) for your clients. Try to understand the value of their KPIs (e.g., what’s just one new lead worth to a aircraft broker who sells $500,000 airplanes?)
6. Add the right analytics to track each KPI. How many people are buying off their site? How many people are filling out their contact or lead generation forms?
7. Setup split tests (or just make adjustments confirmed by data) that can either improve or degrade each of these KPIs. Keep the ones that improve their KPI, ditch the ones that don’t.
8. Clients are going to want a tangible monthly deliverable. Provide a 1 to 2 page PDF report made for your client (or whoever in your client’s organization feels the brunt of paying you each month.) Satisfy the question that matters most: Is this ongoing monthly expense really worth it? In this report, show them where they were last month, where they are now, and what changes happened in between. Include charts whenever possible.
9. If you keep providing meaningful value, there’s no reason for your client to cut off your agreement. Think about the thousands of dollars our clients throw away each month on Yellow Pages listings, not having any idea about what kind of return on investment they’re getting. Show them that you’re worth it, don’t settle for being a dubious monthly expense.
10. To get started, call up your past clients and tell them about your newest offering. Tout the benefits (insurance and increased efficiency) and what that means to them and their business.

Nothing would make me happier than knowing I helped a few people cover their mortgage with this email. Reach out to me using the email address in the sidebar if you need any help setting up your first agreement.

For almost a year now, Planscope customers have creative in coming up with ways to use Planscope — a tool meant to help you work on projects you’ve already won — to help them estimate and win new projects.

In a few days, I’ll be pushing out native estimating support. The interface is condensed, with the total cost and complexity front and center. Your clients will also be able to toggle off tasks (or entire groups of tasks) until they’re able to put together a project with a scope and budget that they’re comfortable with.

What This Means For You And Your Business

Traditional estimating often involves taking a set of requirements and delivering a proposal that outlines a projected cost and list of features or requirements that will be worked on. The problem with this form of estimating is that it’s, quite literally, you throwing a number over the wall and hoping your client understands how you came up with that figure.

By adding the ability for your future clients to collaborate with you on estimates, the responsibility to come up with a project scope that fits within their allocated budget is up to your client. You just plug in your rate, estimate all the available requirements that you know about, and hand it over to your client. Together, you can work with them to prioritize, setup milestones, and possibly reduce scope until the client is satisfied.

Once the estimate is signed off on and you have an active contract, simply click the big green button to the right and Planscope will convert the estimate to a first-class project. You can start collaborating and logging time in just seconds.

I’d love to hear any feedback or suggestions that you might have. Sound off in the comments section below or drop me an email.

It’s pretty much inevitable that after the realization that “Oh my God, I’m making a ton of money” freelancing, just about every consultant I’ve met soon realizes, “But that money disappears when I stop working.”

This post is going to dive into how you, an idea-less freelance consultant, can build products of your own and develop recurring revenue streams that don’t necessarily require an ongoing commitment of your time.

Why Recurring Revenue?

Recurring revenue is much more than just “money that will come to me as I sip Mai Tais on Waikiki Beach.” Recurring revenue is (more or less) predictable revenue. The catch with consulting is that the majority of us bill for our time, and if no time is logged — either because we’re on vacation or simply just don’t have a project to work on — there’s nothing to bill for. But we still have monthly obligations. We still need to pay for our shelter, our food, and other amenities required to live comfortably.

I can’t speak for you, but if I’m on the hook for paying banks, creditors, or utility companies upwards of $10,000 for the foreseeable future, being uncertain about where I’m going to get that $10,000 is a huge weight to shoulder. Our salaried brethren understand what it feels like to be worried about getting fired and losing their paycheck; but many of us freelancers constantly face that fear, and that’s a fate that can occur despite how successful we are at the work we produce for our clients.

What attracted me to pursuing recurring revenue was that I could offset my fixed liabilities with something that I had a lot of control over. If one of my two current consulting clients bailed, my income might be cut in half by 50%. If one customer out of the thousands that have bought a book of mine ask for a refund, I might need to skip dessert tonight.

Products: An Emotional Hurdle To Overcome

I was in Las Vegas last week for MicroConf, an annual conference for bootstrapped entrepreneurs. And I noticed a trend… Everyone there was aiming to one day live entirely off of product income, but a significant majority was using consulting as a crutch to support them until they hit some critical mass of paying customers that they could cut the umbilical cord of consulting (keep in mind this is a bootstrappers conference — we don’t have the luxury of the massive amounts of cash infusion that can come through funding!)

The jump, however, between selling time for cash and selling a self-serve product to someone you’ve never met is pretty big.

The former just requires you finding a few people like you who can effectively “rent” you for a rate, either because they don’t have whatever skill they hired you for or they don’t have the time to do it themselves.

The latter can require figuring out a problem that people will pay YOU, an Internet stranger, to fix. This means marketing, writing persuasive sales copy, and building a product before anyone’s bought it (which can be a struggle for those of us conditioned to “work now, get paid soon-ish”,) and having the gumption to actually ask for the sale.

Marketing. Persuasion. Building a product. Fulfillment. These dragons are slain through research and elbow grease. But before any of this can happen, many freelancers-turned-product-people need to come up with an idea, which is where most of us stumble and give up.

The problem is the belief that ideas are special, and that “great ideas” will come given enough time (or enough showers, depending on when and where you get inspired.)

But what if you didn’t have to wait. What if you already had the great ideas you need to build up recurring revenue?

Sell What You Know

I want to talk about two different audiences you can sell to right now, and how you can go from trading your time for money to building up a product that literally sells itself while you sleep. As an added bonus, doing this can help you get more clients, which helps alleviate the “feast or famine” problem that affects a lot of freelancers.

To begin, you need to start with a little soul searching…

Why do clients pay you wads of cash? The answer isn’t necessarily “Because I write code” or “I’m good at setting up WordPress.” Most people will hire you because you’re capable of solving some sort of business problem that makes it worthwhile to cut you large checks with the assumption that you’ll deliver something worth more than the cost to hire you.

So if they’re hiring you to, say, get more walk-in customers to their retail shop by setting up some really solid stuff online, that’s at the far end of the execution spectrum (“Here’s my problem, you’re the tech guy, I’ll pay you to fix it.”) You’re consulting. You’re applying your knowledge to solve one person’s pain, which in this case is a lack of customers which is causing a bit of a problem with their cash flow.

Alternatively, the skills you possess that allow you to charge your clients to get them more walk-in customers might be desired by a more junior freelancer who also wants to become more valuable by offering this service to their clients.

How did you get to where you are today? What skills did you need to acquire before you were able to make yourself valuable enough to be hired? And before worrying that you aren’t necessarily an expert and getting the maximum amount of walk-in customers for the maximum amount of retail shops, you just need to realize that you only need to know more than the person you’re trying to teach.

The theme here is education. Consulting is just applied education, and there’s a lot of middle ground between where a client or fellow freelancer is today (“I need more walk-ins” / “I also want to help my clients get more walk-ins”) and having an expert consultant apply years of accrued wisdom to a specific problem, or becoming the go-to consultant for getting retail shops more clients.

Sell To Your Peers

Selling information to other freelancers like you can solicit two types of very vocal responses:

You’re selling tools to the miners. (The idea being that the only people who made money during the gold rush in the American West were the merchants hawking mining gear to upstart miners. The difference being that in this gold rush, the miners are actually making lots of money.)

…or…

All of this is available for free on the Internet [in existing blog posts, podcasts, forums, StackOverflow, etc.]

But for each of these minority voices there are dozens of silent doers who want what you have to teach so they can move on with their lives, becoming more valuable and charging more.

And these doers will buy the knowledge you’ve cataloged, organized, and presented for sale. Because when the doer isn’t doing, they’re not making any money. And if they’re billing $XXX an hour, spending $XX to level-up is a no brainer. They don’t have the time to hunt and peck around Google results to get to the same result that you’re offering with a shiny “Buy Now” button.

A great example of this in action is what Nathan Barry’s done with his two books, The App Design Handbook and Designing Web Applications. He’s produced two products — the former for iOS designers, the latter for designers of web apps — that can help the reader go from just a designer to being able to walk and talk like an experienced iOS or web app designer.

The best part of what Nathan’s done is that his products are sold and packaged as an easy to digest pill. Rather than wading through the good and bad of pages of Google results to figure out how to implement the perfect navigation UI, Nathan’s done that work for you and has it available for sale.

Let’s think like a CEO who hires designers for a second. Jim, an employee of yours, is a good web designer, but now he needs to design our company’s new iPhone app. Sure, he knows how to use Photoshop and splice and dice up PSD files… but Jim’s never designed an iOS app. We could think, “Jim — go and figure out the ins and outs of iOS design for a few weeks.” But Jim costs a few thousand dollars a week, and the idea of spending thousands so Jim can (hopefully) become a competent iOS designer sort of sucks. And you don’t want to hire that high price consultant and risk pissing off your in-house designer, right?

And then you discover that for $169, this guy named Nathan has a complete package of resources that help designers become awesome iOS designers. Businesses pay for things, especially when those things can reduce costs or amplify revenue.

Sell To Your Clients

Remember that spectrum, where at one end we have raw information (“The know-how to help a retail business get more walk-ins”) and at the other application (“The knowledge and the time spent to help one retail business get more walk-ins”)?

As freelancers, we’re used to being paid to apply knowledge for our clients. But we don’t always think about the value we could deliver on the lesser parts of the spectrum.

Think about it this way. To go back to our example, Mary the Business Owner wants more walk-in customers. There are actually quite a few ways to do this:

Learn and act. Mary could read a book or take a training course from someone like you who’s constructed a guide for setting up ads and a marketing site that helps convert visitors to walk-in customers. This requires Mary (or someone on staff) to take the time to do some learning and then actually execute on this new knowledge. The product Mary purchases is probably purely information: an ebook, a training course, videos, …

Get something turnkey. Mary could come across a SaaS vendor who promises a turnkey website and set of marketing campaigns that are specifically built for retail shops wanting more walk-in customers. This is significantly lower risk (and cost) for Mary, because the next option would be to hire a designer off the street and hope that he knows how to 1) build the site and the marketing campaigns and 2) know enough about retail shops and how they get walk-in customers. Chances are, most of the products you’ve wanted to build have fallen into this space. The product Mary purchases is probably a web-based, multi-tenant product that she pays for monthly.

From scratch. Mary needs her problem solved, and she lacks the technical capacity or time and energy to do it herself. So she finds someone like you, is persuaded that you have the skills to solve her problem, and then commissions you after a high-touch, possibly lengthy sales cycle. The product Mary purchases is a one-off consulting engagement with someone (an individual or agency) that she feels can help solve her problem.

An added benefit of educating your client is that you’ll increase your perceived expertise, which could end up netting you new clients who need to hire a consultant who helps retail businesses get more walk-in customers. After all, you literally wrote the book on it.

Patrick McKenzie is routinely hired by software companies to help improve their conversion rates through something called lifecycle emails. Now, Patrick lives in Japan, and just about all of his clients are located halfway around the globe from him. Hiring Patrick involves going through a proposal, possibly convincing partners or a board to hire this guy for $XX,XXX a week, accepting his proposal, negotiating contracts, getting Patrick to fly halfway around the world, getting him in your office for at least a week, and then sending him back.

All because you need Patrick to help you apply the email knowledge he has to your business.

This also limits Patrick to having just a handful of clients. He can do the grueling, cross-Pacific flight only so often, and being a newlywed tends to exponentially complicate things.

So while Patrick could just stop consulting, he could also do it at scale. He could distill his knowledge into a five hour video course, and allow people that couldn’t afford him or win a coveted spot in his consulting schedule to reap a lot of the benefits of having Patrick sit in your office for a week.

The Middle Ground Between Information and Application

Where Patrick hasn’t gone (and where, frankly, I think he and you could) is the middle ground between teaching and doing.

When Patrick is hired to write lifecycle emails for a software company, the hiring company is educated by Patrick, but he’s also going to write and put into place the application of that education (e.g., a 30 day email course.) But what happens when a company picks up his video course and takes a stab at implementing the advice contained within?

Who do you think they’re wanting to get feedback from?

Patrick. Or if it’s an ebook on getting more retail walk-in customers, from you.

And this gives you and Patrick the distinct advantage of being able to charge what might seem an exorbitant rate to spot-check or vet the end result of your customer attempting to take action on your information. And let’s face it — only one person really fits the bill to do this one-off consult… the creator of the content that gave them the skills!

Other middle grounds involve group training or workshops, monthly retainer agreements, coaching, and other services that you can price, rather than bill.

To round out the examples, Joanna Wiebe of Copyhackers offers a No-Fluff Website Review for close to $1,000. The review includes an assessment of your website’s copy and a 60 minute video review. Because Joanna’s established her foothold in teaching people who hate writing sales copy what it takes to write effective sales copy, her 1-on-1 review is a natural upsell to her books. She’d be hard pressed to sell this service of hers without the book, but again — once someone’s spent a few hours in Joanna’s head by reading her book, she’s going to be the only viable candidate that’s capable of conducting a website review.

So before you get dismayed by the amount of time and effort it takes to build a product, realize that products can be as simple as something that teaches just one thing. And instead of waiting for your Eureka moment, reflect on why people have hired you in the past. The road to selling products doesn’t need to be steep and jagged.

You’re familiar with speed dating, right? The idea is simple: Join a bunch of guys and gals in a room with lots of small tables, and everyone pairs up for a few minutes at most. The hope is you’ll find that special someone that you just click with right away, and you’ll save yourself a lot of time by not investing entire evenings with the duds.

Before anyone decides to become your client, you have to date them. They learn about you and decide whether or not to trust you with their money over a series of emails, phone calls, and meetings. But this takes time, a lot of time. And there are duds, sometimes lots of duds.

Over the last few months, I’ve shared with you an automated system for client courtship. You take someone who doesn’t know you, and you prove yourself to them over time through a series of automated emails that enrich their lives. You have one goal: Make them better off than they were before they met you, and get them to realize you’re to thank.

And because this all happens behind the scenes, without you needing to personally write each and every email, you can actually get stuff done in the meantime.

No one’s going to straight out hire you because of your autoresponder sequence, but when you meet about a project a lot of the trust issues will already be out of the way…

They know you. They know your worldview, your tone and language. They know that you know what you’re talking about, and that you’re an expert in a subject that can grow their business.

Once you do begin to talk with them about an actual project, you won’t need to establish the above. It’s already been done for you. You can focus on ironing out the details of their project, not proving yourself.

Is this all starting to come together now?

Next will be the final part of this series. I’ll identify exactly what you need to say and do to convert your list to new clients — you won’t want to miss this.

Have you ever wondered what traits separate exceptional freelancers from the average? You know — people who charge huge rates, work on incredible projects, and just seem to be kicking ass with everything they do?

Well, last week I was at LessConf and heard a talk from Jason Blumer (disclaimer: he’s my CPA.) Jason talked about 20 things that that “rich, creative business owners” (RCBOs) do, and I wanted to relay them on to you.

Now, Jason’s in a bit of a unique position to come up with this list. First off, he only works with creative professionals like you and me. And second, he knows how much each of his clients make. Pretty awesome, eh?

So here are the first ten traits of RCBOs — along with commentary from yours truly

1. RCBOs understand the difference between freelancing and entrepreneurship — You’ve heard me talk a lot over the last few months about how easy it is to fall into the cycle of perpetual client work. You work, work, work and spend very little time strategically thinking about your future. A freelancer / entrepreneur knows where they are today, but more importantly knows where they want to be tomorrow.
2. RCBOs sell knowledge — this implies they don’t just sell time. The difference between a client hiring you as effectively an employee, but with the added benefit that they can ditch you at any time with very little friction, versus a consultant who is hired because of what you’ve got in your head and your ability to execute on that is HUGE.
3. RCBOs leverage teams — When I ran my consulting business, I had a team of employees. Today, I have part-time contractors and VAs who help me get stuff done. My time is limited, and there are some things I legitimately don’t bring any value to — bookkeping, onboarding new students into my workshop, etc. However, there are a lot of demanding things that I can’t (and won’t) delegate out: writing my newsletter, writing blog posts, answering reading email. The next time you do some routine task, ask yourself: Is this a valuable use of my time?
4. RCBOs build a brand — When I was the CEO of my consultancy, it was clear I was running a brand. You weren’t hiring Brennan, you were hiring the company he owns. Now that I’ve decided to focus on products, I’m still running a brand — a brand of Brennan. Branding in this context means a way in which you operate, a tone that your messaging takes, and processes and procedures that you use to get stuff done. A brand-less business moves whatever way the wind blows.
5. RCBOs make time to think, write and learn — Stagnation occurs when you do the same thing again, and again, and again. Thinking big thoughts allows you to clear your head of the immediate and focus on the road ahead. Writing gets those thoughts on paper (tree or virtual), and is just another expression of thought. It’s almost like the act of thinking turns a rough block of marble into a shape, and writing extracts out the details — you need both steps to result in something beautiful.
6. RCBOs know a lot of the right people — Successful people aren’t hermits, but they aren’t mooches either. I know, and consider friends, a ton of people who have helped me grow my business. But our relationship isn’t contingent on “What can they give to me?” When cold-emailing someone you look up to, or invite a conference speaker out for drinks, ask yourself: What’s in it for them?
7. RCBOs recognize their own value — Anyone who’s read my first book knows that I have a huge problem with people who undercharge, especially when pressured. The four weeks you’re about to spend on that upcoming project? They’re irrecoverable — like fossil fuel. Undercharging cheapens a resource you’ll never get back.
8. RCBOs seek out coaching and mentorship — I’ve hired business coaches, and people now hire me to coach their consulting businesses. Truthfully, at first I lumped “coaches” in with “therapists.” I thought they were for those who couldn’t tackle issues and plan by themselves. Wow, was I wrong. Get yourself an advisor who understands your business or hire a coach. Get to know your peers who are a step ahead of you, and mentor those a step behind you. Trust me on this one.
9. RCBOs constantly innovate new products and services — You know what’s great about each new prospective client you talk to? You’re starting with a blank slate. You can experiment based on the successes and failures of the past, and apply them the next time you work with someone. Early on, I raised my rates because I didn’t consider myself to have an actual rate. I had rates that I had charged in the past… but that had nothing to do with right now. Experiment and play with how you qualify new clients, how you conduct meetings, what you charge, how you invoice. Learn from your past and always be improving.
10. RCBOs take risks — If you’re a full-time freelancer, you’ve already taken your first big risk… You quit your job, and went out on your own. Successful people know that the greater the risk taken, the greater the reward. But most of us are afraid of failure. We don’t want to slip. But wouldn’t you rather slip moving up to that next step, and landing back — flat on your ass — where you were before, rather than never moving at all?

The next post will include the final 10 traits of RCBOs.