How to go from mom and pop businesses to bigger companies

Is working with mom and pop businesses holding you back?

When’s the right time to transition to targeting larger companies?

And how would you go about doing that?

Those are some of the questions you might face as you try to grow your freelance business.

Take Gina, for example. Gina’s clients (in her words) “include mostly local mom & pop type businesses with 1-10 employees. While their budgets are typically small, they keep the lights on for me and I have about 10 of them that I’ve been working with for 6-8 years and they use me again and again. The relationship usually begins out of a need for a new logo or website. I charge around $900-$1200 for a logo and around $2500 – $3500 for a website. After that, they come to me with ads, posters, email marketing, brochures, business cards, etc. Those projects typically average $200-$700.”

Gina’s got a nice business going. You might even be envious because she’s got a good base of clients that keep the lights on, are nice and easy to work with, and keep coming back to her over and over again.

But she’s got a problem. She’s stuck. She’s reached her ceiling with this market.

Gina is at or near capacity. She’s busy, but not necessarily profitable. She’d like to grow her revenue, but this market just can’t afford to pay her more.

“I’m lucky to have a base of clients that are really nice, easy to work with and use me again and again, but I’d like to go after clients with bigger budgets and not take everything that comes to me word-of-mouth. While I love my small clients, it does take a lot of time and energy to do the small jobs, track the printing, invoice, follow-up, etc.” 

She gets plenty of referrals, but that only feeds this cycle. Because clients refer like-minded clients. So all her referrals are for more mom and pop businesses.

Worse, sometimes she cuts her price to accommodate those business owners that can’t afford her already reasonable rates—which cuts into her profitability even more.

“They almost always refer me to more businesses like theirs and for the most part, I’ve got really good at screening out the people that aren’t a good personality fit, but I do sometimes take on projects for less when I sense they might not have much of a budget. I feel bad and want to help which has kept my income from growing.”

This is such a typical scenario.

She can only do so much work on her own. For Gina to grow, she’s got two options:

Option 1: Take on a larger volume of clients 

She could hire a junior designer to help with the bigger workload that comes with more volume, but then she’ll have to manage another person, and Gina wants to stay solo.

Option 2: She can raise her prices and go after clients with bigger budgets. 

To do that, she’s got to go upmarket and begin working with clients that have more money to invest.

One way to identify these businesses is by how many employees they employ.

For example, instead of working with mom and pop businesses with between 1-10 employees, she’s got to focus on companies with between 10-20 employees or higher.

Those businesses will have more money simply because—to support that many full-time employees—they have to have enough revenue, and they’ll also have more money to invest in the services that Gina offers.

But Gina’s got the same question you’ve probably got on your mind right now:

How to go after bigger fish

Gina asks:

“I need a marketing method for going after bigger fish. I’ve tried prospecting on LinkedIn and with emails, but haven’t had much luck. Maybe you could do a post about how to make the leap from a mom and pop to how to get the business with 10-20 employees. How do we identify these folks and how to we get more people to refer us to those folks?”

Gina goes on to say,

“I think the key for me (since I don’t want to work crazy hours and I want to stay solo) is to have just 1-2 of those 10-20 employee businesses that refer me to more 10-20 employee businesses. Cold calling/emailing/prospecting is a hard sell, but getting those first 1 or 2 might have a nice ripple effect.”

Ok, so the question is how do you get those bigger fish, right?

The answer to that lies in specializing.

But before we get to specializing, we need to talk about putting together a plan. A marketing plan.

So let’s start from the beginning.

Putting together a marketing plan

A marketing plan is nothing more than figuring out how you will find the people in your ideal target audience and how they will find you.

But before we figure out where to find Gina’s bigger fish, we first need to identify who they are. If we don’t know who we are targeting, how are we going to find them?

So the first place to start is to figure out who your ideal customer is.

Then you figure out where they hang out.

Let’s call these places where they hang out “fishing holes.” The “fish” are your ideal customer.

Going where the fish are

You need to go to the fishing holes to be able to catch anything, right?

So if you want to land these clients, you need to know who those clients are (meaning the type of fish you are chasing after), and where they hang out (certain fish are in certain fishing holes and not others.)

In Gina’s case, these bigger fish she mentions are companies with between 10-20 employees. However, the size of the company alone isn’t quite specific enough to allow Gina to find her fishing holes—but we’ll get to that in a moment.

For now, let’s look at how this marketing plan works on a more practical level.

Let’s take a look at who my ideal customer is at Inside Freelancing.

My ideal customer:

• Freelance designers (I could definitely get more specific, but this is a good start to keep this explanation simple and clear.)

Where they hang out:

  • In FB groups
  • On popular freelancing blogs
  • They listen to their favorite podcasts for freelancers

These are all places that I can go to and get in front of my ideal freelance designer customer.

These are fishing holes.

Fishing holes are anywhere that I can access the attention of my ideal customer.

  • I can go to FB groups and make helpful comments and maybe get someone to reach out and eventually work with me one-on-one.
  • I can write a guest article on Millo.co or the Just Creative blog and offer something valuable to the reader for them to opt into my mailing list and later pitch them on my services or products.
  • I can be a guest on a podcast and do the same thing I described doing in the guest article

This works the same way for any market.

For example:

If I’m a packaging designer and my ideal customer is a Food and Beverage company, where do I go to get in front of them? One place would be a Food and Beverage conference.

So you go where the fish are, and you figure out a way to get their attention.

Sticking with the packaging designer example:

  • Maybe I set up a booth at the convention
  • Maybe I go stall to stall and introduce myself as a packaging designer and leave my card
  • Maybe I talk to the printers and offer to partner with them to bring them my clients needing print work in exchange for them calling me when a client of their’s needs packaging design work

These are all tactics I can employ to get my ideal client’s attention. But the crucial part in this—the strategic part—is that I’m at a fishing hole where my ideal client frequents.

So again, the breakdown is:

->Figure out your ideal customer

->Figure out where they congregate in large numbers (the fishing holes)

->Get in front of them and offer something of value that is relevant to them so it will attract their attention

->Gain their trust and pitch them your services or products

Getting specific to locate fishing holes

The thing that more easily allows us to find those fishing holes is specialization. (Sometimes this can be referred to as positioning.)

As it relates to Gina, going after companies with 10-20 employees is just one aspect of it, but it’s not specific enough to locate those fishing holes.

So let’s get more specific:

I know from working with Gina that she works with companies or “conscious brands” that offer “eco-friendly, organic, sustainable solutions that reduce our impact and our footprint on the planet.

Okay, now we are starting to narrow things down a bit.

However, I still won’t be able to find good fishing holes using this company profile because it’s too broad. The pond is too big.

We need to get more specific.

Are these eco-friendly cosmetic companies? Are these natural foods companies?

In other words, what type of eco-friendly business?

Once we know the type of business, then she can start finding those fishing holes.

How to tell if you’ve chosen the right specialization

One good measure of specializing is if you can locate a conference for your ideal client. If you can, it means there are people interested in what you offer, and you probably have a viable market.

So, sticking with my example from earlier, are there food and beverage conferences? Yes, there are.

Are there packaging conferences? Yes, absolutely.

Are there food and beverages packaging conferences? Surprisingly, yes, there are.

That’s how I’ll know there is a viable market for specializing in packaging design for food and beverage companies.

Note: There is a line you cross with your positioning where it becomes too focused and specific, and therefore there are too few opportunities to sustain you. But being too general makes it much harder to find your fishing holes. So I prefer to err on the side of specific over general

Two ways to specialize

Here are two ways to get more specific.

Specialize by the market (for example, food and beverage), and/or specialize by discipline (for example, branding).

For example,

Let’s say you are a designer.

At the very least you need to define what type of design (the discipline) you do.

  • Is it UX design?
  • Is it web design?
  • Is it identity design?

And then you throw in the market:

  • Is it UX design for Fortune 500 companies?
  • Is it web design for female entrepreneurs?
  • Is it identity design for sports teams?

A subset of positioning by discipline is to throw in a technology platform without specifying the market.

So for example, your specialty could be:

Web Design for WordPress sites

Or,

Email Marketing for Shopify store owners.

When you start any marketing endeavor, you need to always start with WHO your ideal customer is and make sure it is specific enough so that you know where to find them.

If you can’t find them, there is no way to get in front of them.

But there’s another problem.

Finding your ideal client—when the market is big enough—is the easy part, getting their attention and consideration is another story.

Luckily, that’s another issue specializing helps solve.

How specializing gets your client’s attention

In the movie Almost Famous, about the fictitious band Stillwater, Jimmy Fallon plays the part of a big-time rock band manager who sees the opportunity to guide this up-and-coming band and show them how to get the most out of their new stardom.

Before the band hires him, there is a scene where Jimmy’s character pitches the band on replacing their existing in-house manager. The scene shows the power specializing has to get your client or prospect’s attention and earn you their consideration.

Let’s look at Jimmy’s positioning:

What he does: Management and tour operations (the discipline) for arena headlining rock acts and touring bands (the market).

He specializes in managing headlining bands. He’s got experience in solving the problems big touring bands face.

The comparison Jimmy makes in the scene is to the in-house manager whose experience is limited.

In three sentences he makes it clear why he is the better choice for them.

The scene plays out like this:

The Band: Why should we pay you for something we can do ourselves?

(They’ve already got a manager after all.)

Jimmy: Do you know how to keep from getting charged for the ice below the floorboards of Chicago stadium? Do you know how to do a headlining tour? Do you know how to get a record not pressed, but played? 

With these three questions, he’s established himself as an expert by pointing out problems they didn’t even know they had or would face. And it leaves the bandmates with raised eyebrows and makes a huge impression on them.

And of course, Jimmy knows how to solve these problems.

Jimmy: I didn’t invent the rainy day, man. I just own the best umbrella. 

He’s pitching himself as an insurance policy against the problems big rock groups like them face.

It’s incredibly powerful.

To translate how you can do something similar, imagine for a second that Jimmy’s character had a website with a blog to show his expertise in management and tour operations for rock bands.

Let’s suppose there is a rock band with a big North American tour coming up and they are worried about things going wrong. They search for answers to some of the questions they have and come across Jimmy’s blog.

(That’s right, I’m asking you to imagine that rock stars use Google search queries to help solve their problems.)

Now let’s take those questions Jimmy asked the band in the movie, and turn them into article titles:

How to keep from getting charged for the ice below the floorboards of Chicago stadium

How to do a headlining tour

How to get a record not pressed, but played 

You can see how these articles could get the attention of that particular target audience—because these issues are so relevant to them.

They are super specific, and if the articles can prove Jimmy knows what he’s talking about, it will help earn the consideration of these Google savvy rock stars and build their trust in Jimmy as a candidate for manager of their upcoming tour.

They don’t just need any band manager. They need a band manager with experience and know-how to deal with the type of issues arena-touring rock bands deal with.

You can do the same thing by specializing and understanding what your particular market’s struggles are and show them that you know how to solve them.

“But what if I don’t have that kind of experience?”

When you are starting to specialize, you might not feel you have the expertise and experience to claim that you are a specialist like Jimmy’s character does.

And you are probably right. You don’t have all that experience.

But you probably have more expertise than you think you do.

Because some of your expertise IS transferable across markets and disciplines.

By focusing, you will, over time, gain insights that only a specialist would know and understand.

But just by claiming publicly that you serve X market in Y discipline, you’ll be able to attract the attention of that market.

For example,

If you think of a restaurant that offers a particular type of food, let’s say Japanese cuisine, for example. A customer in the mood for Japanese cooking, will consider trying that restaurant.

The restaurant is claiming to specialize in Japanese food. Whether the sushi is any good, is another story.

But just by specializing, a customer seeking Japanese food is attracted to the restaurant.

It’s the same for you. Just by specializing, you’ll attract a certain type of customer.

Specialization as a tiebreaker

So can Gina go to a conference for businesses that offer “eco-friendly, organic, sustainable solutions that reduce our impact and our footprint on the planet?” Yes, absolutely. There are tons of conferences for these types of businesses.

But it’s not necessarily specific enough for her as a service provider to target this large of a market and gain their attention and consideration.

Focusing in on precisely who Gina serves within that group of eco-friendly brands, and knowing what their problems are is what will give Gina access to their attention and consideration.

So when Gina says, “Cold calling/emailing/prospecting is a hard sell” she’s absolutely right.

However, it becomes far easier for Gina when she gets on the phone or emails that prospect and tells them she serves exactly the type of business they operate. She specializes in helping businesses like their’s and can show them she understands and can solve their problems.

Note: Even if the problem Gina is solving can be done by an agency that doesn’t specialize—like for example, identity design—if the company is a natural foods company, and that’s Gina specialty, she’s got an advantage over a competing branding agency that has no experience with natural foods companies. Specialization can help be that tie-breaker in this instance

“If I specialize, do I have to quit offering my other services?”

Why send a client down the road when you can upsell them other services, right?

One fear freelancers have about specializing is that they’ll limit themselves. And yes, that is the point of focusing. When you go deep, you gain more knowledge and expertise than you would by being a jack-of-all-trades.

Here’s the thing though, you don’t have to 100% limit yourself. You can, at least in the beginning, while you are transitioning towards specializing, just use it as a client attractor.

Let’s go back to the restaurant analogy for a sec.

You’re the chef, and your restaurant specializes in a type of food (Japanese, Italian, French, etc.).

To the outside world, you are an expert on the type of food you serve. But that is not the only type of food you can cook. When your friends come in, or when you cook for friends over the holidays, they know you can cook a specialty, but they are more than happy to eat the other types of food you might want to cook.

You’re a chef, after all, and many of those same skills transfer to other cuisines (akin to different markets) and positions in the kitchen (akin to different disciplines).

Your specialty is what attracts people towards you. It’s your client attractor. But once you’ve connected with your client, you CAN sell them other types of services that aren’t necessarily what you specialize in.

But you’ve got to have a specialty to attract a certain type of client. Otherwise, there is nothing that stands out to the client in a sea of sameness.

But only do this with existing customers where you’ve got an established relationship. With new or recent customers you’ll destroy the little amount of trust or consideration you’ve built up attracting them to you by saying, “sure I could also do that. I also can do in A, B, C and X, Y, and Z.

Note: In the long run, yes, you’ll want to only offer a specific service because of the in-depth knowledge that comes with focusing. But in the short-term, you can still get some of the benefits of specializing without having to turn away your existing customers.

“What about other agencies? Some of them seem to be thriving without specializing.”

Just looking at other agencies, it’s hard to say how they are targeting clients.

It’s true that the larger and more well known you are, the less your positioning matters. Or rather, the positioning becomes “a one-stop shop” type of positioning. They are big enough that they can have a specialist with deep knowledge in travel, another in food, another in sport, and so on. Or, they can bring on a specialist to execute the work if needed.

This comes into play with the big creative firms like Landor, Ogilvy, Saffron, Wolf Olins, etc. They are big enough that they don’t need to specialize because they specialize in being a big agency. And that attracts a certain type of client.

But when you are a small shop, the better way and one of the few options you have available to compete is to specialize.

You’ve decided on a market. But can you access them?

Now, how you reach your market varies and matters a lot.

For example, there’s no conference for arena-style touring rock bands Jimmy Fallon’s character wants to work with. However, there IS a tiny yet highly lucrative market there to be had.

The question is how to access that market.

You obviously won’t be reaching that market via thought leadership on your blog.

So you’ve got to consider that when you are specializing.

Do you have access or can you gain access to the market you are looking to specialize in? If you can’t find them now while you are putting together your marketing plan, how will you find them when you are ready to sell to them?

The reality of accessing that market might mean you have to get out of your comfort zone and do more than you are willing to do.

For example, if you want to specialize in brand identity design for professional sports teams, how would you access that market?

Even if you can do amazing design work for this market, the reality of getting in front the buyer for this market might mean first working at an agency that already has a piece of this market and then going out on your own once you’ve made contacts in the industry.

Is that something you are willing to do? That’s a huge obstacle—obviously—and one you need to consider carefully when deciding on a specialty.

Summary

So if we go back to Gina’s question: “I need a marketing method for going after bigger fish… How do we identify these folks and how do we get more people to refer us to those folks?”

The marketing method she chooses will depend on the market.

First, she’ll need to figure out who that ideal client is. Then, where they can be found (and if she can gain access to them).

She’ll use specialization to more easily identify where they hang out and to attract them to her and gain their attention and consideration.

She’ll also gain more referrals than she otherwise might have because she is a specialist.

Al Ries, who coined the term “positioning” in 1972 said:

“Think of a position as a knife. It’s hard to cut into a mind with a dull knife. In other words, a position that encompasses almost everything.

It’s much easier to cut into a mind with a sharp knife. A narrow position.”

What he’s talking about starts with specializing. If you want to leave a lasting impression on your ideal client or prospect and gain their attention and consideration, you’ve got to start by specializing.

So that when you do start cold calling or cold emailing, or whatever marketing tactic you choose, you are well prepared to answer their question, “Why should we pay you for something we can do ourselves?”

Or, “Why should we pay you instead of the competing (generalist) agency we are considering?

The answer to that question should be so self-apparent to them that you’ll probably never hear that question come out of their lips in the first place.