The number one listed struggle (38%) of freelancers is 'getting enough clients'. This should be a familiar feeling to any solo business, consultant or freelancer reading--even if you're doing well.
The truth is, we often make this struggle more strenuous than it needs to be. We know that there's enough business out there. We know we should be prospecting and looking for leads--but let's face it, this isn't the most exciting part of running your own business.
And so we let it slide.
We let it slide so easily, in part because we do not have clear targets for ourselves. If it's unclear exactly how many leads are needed: we live with the mystery. Some months we have plenty, other months not enough--let the mystery go on.
But by taking a moment to simply forecast how many leads are needed in order to reach the business goals we've set for ourselves, we give ourselves a clear target that:
Can be measured;
Can be tracked (and held accountable); and
Can be updated and adjusted as we learn more.
By modelling and calculating our target leads we're not saying that we will automatically have enough business, forever. We're simply giving ourselves a clear target, that's based in the numbers, and that stands a very good chance of letting us reach our business objectives.
So let's get into it.
💸 Bidding & Revenue
Starting Target Revenue
This is your goal for monthly gross revenue—the total amount of money you'd like to see coming into your business, before any expenses. It's best to set this as the target for this upcoming month, and to make it as accurate as possible: there's plenty of room to be ambitious about where you'd like to end up with the 'Growth Rate' metric, so just start where you are and use the growth rate to forecast future earnings.
Average Project Budget (Small & Large)
For simplicity, we're going to focus on just two average price points for this model: small and large. Your business may vary—perhaps you only have one offering, or maybe you have several price points that you offer. If that's the case, do your best to average out the lower and higher price points, then input those values into the model above.
If you have past data on these points, lean on those—it will help keep your estimates accurate and therefore as useful as possible.
For example: If I'm a website designer, I might have two projects that I commonly engage with.
1) A quick website cleanup/fixup, billed at $750; and
2) A larger full-scale build, billed at $4,000.
In the above model, we can separate these offerings and thereby give a more accurate model of lead generation needed.
This is the rate at which you'd like to see your business grow month over month.
Keep in mind that just a 2% month over month growth rate will see a 27% increase over 12 months—that is, if your target was '$10,000' in January, with just a 2% month over month growth rate, your target would be about '$12,700' for the month of December.
Pricing Increase Rate
This, too, follows a month-over-month curve (though you don't need to literally raise your prices every month).
If you want to steadily raise the price tag attached to your services, this is a variable you can adjust—you'll notice that as you raise the price, naturally the number of projects needed / month goes down, as does the number of leads needed.
Small & Big Project Conversion Rates
These are the respective rates at which you currently (or expect to) convert leads into active clients. If you don't have a good intuition or estimate for this, you can reference the model at the bottom of this page for help.
Existing Contacts Renewed
This is an important one. It's where you get some reward for all the hard work you're doing each month accumulating leads—and it's where you account for tapping into your existing pipeline.
When we say 'renewed contact', we simply mean a lead which either:
A) Rejected a previous proposal;
B) Wasn't ready to speak yet; or
C) Didn't respond;
But on further contact has expressed 'renewed' interest in your offerings.
How you determine this number may vary from business to business, but the punchline is this: the larger your contacts list grows, the higher the number of renewed contacts you're likely to have access to. While this is on a diminishing curve, it is still an important piece of any healthy leads pipeline.
Offers Accepted Rate
This variable which describes how many offers you accept.
There are multiple reasons to reject an offer made—sometimes the timing is off and we can't onboard the project, sometimes we learn more during the intro call which tells us we don't think the client will be a good fit, and sometimes we simply change our mind.
Giving an acceptance rate that isn't 100% simply means we have some wiggle room to be selective in which projects we actually onboard.
Percentage of Happy Clients
Happy clients are more likely to refer. Your input here will influence the total referrals count, and thereby either increase or decrease the number of outbound leads needed each month.
Starting Client Base & Contact List
This is pretty much as it sounds—wherever you are now, starting this process, input your current viable contact list. This list will grow month over month with each new leads prospected and contacted.
Outbound Leads Needed
Now that you've inputted all the above values, you should have a first approximation at precisely how many leads you'll need to go out and generate, each month.
You'll notice that the shape of the curve, and the total values, will vary greatly depending on the inputs you enter. Play around with and finetune those variables until you're happy, then it's time to set those values as targets to hold yourself accountable to.