This promoted content is produced by a publishing partner of Open Mic. A paid-for membership product for partners of The Drum to self-publish their news, opinions and insights on thedrum.com - Find out more
Jared Polites on How to Scale a Sole Proprietorship to $1 million in Sales
24 September 2019 17:13pm
Jared Polites (last on right) on stage at the Japan Blockchain Conference in Tokyo
According to IRS reporting, in 2016 there were over 25 million recorded sole proprietorships in the United States. These represent all non-farm businesses operated by individuals. In this case, the word business can be used informally to represent freelance income. Surprisingly, the average income across all sole proprietorships was just $15,565.
The professional, scientific, and technical services sector reported the largest percentage of total profits of all nonfarm sole proprietorships, with 23.7 percent ($77.7 billion). This group includes legal providers, accountants, and specialized consultants. Building and scaling a one-person business is challenging, but there are industries and specific services that can command competitive retainers that can amount into large sales figures.
To learn more about building and scaling a sole proprietorship, we spoke to Jared Polites. Jared is a consultant that focuses on the blockchain and tech industries, with a specific focus on marketing and strategic advisory. In less than two years, Jared generated $1 million in sales as a freelance consultant and sole-proprietor working around the world.
When asked what his secret was, Jared provided the following 5 principles:
1. Offer Value Without Asking Anything in Return
When I was getting started, I literally took every call I could. Some days I would have 15 calls, with just enough time to grab a quick lunch. This translated into extremely long work days but I enjoyed it. Through this process, I offered free advice on the market, tips on what was working and what wasn’t, and general feedback on someone’s product or idea.
I would never go for a hard sell and still today do not believe in that. When you find a way to offer genuine and authentic value, not to mention personal conversations, you will notice that you end the call with a new contact and sometimes even a new friend.
Naturally, this process was not scalable, so I incorporated a tool called Calendly to manage call slots and organize my agenda. As the market slowed down, call requests calmed down to a manageable and healthy level. The point is, be open-minded and show genuine interest in helping someone. I guarantee that you will see an uptick in sales conversions, even if they come back around a few months later.
2. Communicate. Communicate. Communicate.
This piggy-back off of the first point but it is incredible how bad people have become at basic communication. Solid communication builds a reputation of reliability and in my opinion these can be more important than the actual skill or talent involved in completing a task.
When getting started, I used this organized approach to have a “no surprise” approach towards clients. This meant anticipating what their concerns might be and implementing processes to ease those concerns. I used trackers on Excel, similar to what project managers do, to give status updates, notes, comments, and timelines on all expected deliverables.
With email, I tried my best to answer all emails during the same work day, even late into the night. Clients and people in general tend to get anxious when communication is poor. Unfortunately, they expect the worst and with a new industry, you can’t afford that luxury.
If there was ever an issue, I owned it and communicated that immediately along with a few alternatives to help. To sum it up, be proactive and organized with communication.
3. Be Transparent and Flexible with Pricing
My secret weapon in the early days was to collect all payments 100% after a campaign finished. This would create a “guaranteed” scenario with essentially no risk for clients. That is hard to pass up! This helped me beat out established agencies and consulting firms with dozens of employees as these firms often asked for pricey monthly retainers.
Additionally, I always lay-out the expectations, deliverables, pricing, and terms very clearly before executing a new contract. There are never any up-charges, surprises, or unexpected fees. If something goes wrong, I offer a pro-rated refund on the missed deliverable.
One caveat to mention is this strategy was a great way to build a book of business but did suffer as the market declined. I found myself with a handful of uncollectable contracts. The way to mitigate this is to only do these structures when a client is referred by someone you trust, or simply do a 50% upfront and 50% upon completion split.
4. Find and Collaborate with Like-Minded People
Just because you work as a one-person operation does not mean you can’t find other contractors to work with. At one point, I had multiple writers in different countries that were helping me during peak periods. This can be done on a contract basis and not impact your solo structure or operations.
Beyond contractors, I became close friends with agency owners and other freelancers, some of which were direct competitors. My personal philosophy in business is that there is enough cake for everyone to have a slice. It sounds goofy, but there is no reason to bash competitors. Let your work do the talking and find ways of collaborating with your peers. The network effects can outweigh any kind of marginal gain you might make from winning a contract.
In many of these fields you will find services to be oddly overlapping. The differentiator is usually just the person. Culture-fit is a thing, even with freelancers. That is why the other points hold true. In an ideal situation, you will find clients that you enjoy dealing with. If not, the Pareto Principle works well here. Eliminate the headaches and focus on your top clients.
5. Build a Referral Network of Trusted Service Providers
As a sole proprietor, it will be impossible for you to do everything. There will be asks that are out of your realm of expertise. When this happens, it is highly valuable to have someone you trust and can recommend. With these introductions often comes a referral reward, which is a common professional gesture to say thank you for the new business.
About one year into my consulting business, I noticed a flip where most of my business came from inbound referrals. These included ex-clients, friends, and other service providers who were happy with my work. This helped me eliminate the need for outbound sales completely.
Ideally, your referral network will be people you know and have worked with before. The worst thing you can do is refer someone you don’t know well and something goes wrong. This will reflect back on you and can cause issues with your client base.
To find referrals, think of ancillary services that work well with what you are offering. For example, every CPA should have a law firm they can recommend and vice versa. With highly-specialized fields, these referrals will help add another stream of income to your business.