Membership Geeks

Switching From Working with Clients to Running a Membership Full-Time

Switching From Working with Clients to Running a Membership Full-Time

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Are you running your membership on the side while managing an existing client focused or service based business? 

Maybe you’re a web designer who still builds websites…

Or a music teacher dealing with private students… 

And to be quite frank, you’re feeling stuck… 

You want to make the transition from working with clients to running your membership full-time… 

But you’re not sure how to do it… 

Or even if the time is right to make the switch! 

We’ve been there… 

And completely understand that it’s a HUGE decision to make… 

So we’ve decided to help you out… 

Here are some tips on how to switch from working with clients to running your membership full-time… 

Treat your membership as if it were a client

By this, we’re mainly talking about how much time you dedicate to working on your membership…

And your mindset around that time.

If you want to grow your membership it’s not just something you work on when you have a few hours spare… 

You should block time out in your calendar to work solely on your membership regularly… 

So in essence, you’re treating it as you would working with your clients. 

During that time you're unavailable for anything else…

And that’s non-negotiable!

You protecting your time spent working on your membership…

Far too often when working on our own projects and trying to juggle them with other activities in our business…

Client work, admin, marketing and so on… 

They tend to slip down the priority list pretty quickly… 

Which results in them getting attention when the other stuff is done… 

I'm sure we’ve all been guilty of this at some point…

But if you want to eventually work on your membership full-time, you need to avoid doing this.

One way to do that is to consistently dedicate 1 or 2 hours per day or even 1 day per week to your membership… 

So when you start doing the math and look at how much money you’re making from that time spent on your membership versus how much you’re making from the time spent on clients you’ll begin to see a difference… 

So if you’re being paid per hour or per project for the work you do, you’ll find that the revenue generated from the time spent on clients never really goes up…

For example, if you bill $100 an hour, and you spend 30 hours a week on billable client work…

Then that time makes $3000 a week.

Unless you work more or put your rates up, that’s not really not going to change… 

When working on your membership, because it’s one-to-many and recurring revenue…

You should see the money you make increasing with the more time you spend on it…

Presuming that some of that time is being spent bringing in new members of course! 

So keeping on top of the financial gain vs the dedicated time you’re spending on your membership is worthwhile.

How to decide when to start making the move to full-time

There are a few different way you can do this…

1. Pull the trigger and jump right in

If your membership is growing extremely fast…

Or you have a big safety net when it comes to things like savings… 

And you’ve taken the steps to validate your idea…

Then going all-in is an option.  

Obviously this is the riskiest approach to take…

But the potential rewards from being able to focus solely on your membership are greater.

2. Calculate the minimum amount of money you need

This approach is definitely a more cautious one… 

Maybe you can start by making some cuts here and there…

Perhaps forgoing a few little luxuries…

Or deciding not to put money into savings for 6 months and so on. 

Just so you have enough funds to start and run your membership site and get by comfortably. 

And then once the revenue coming solely from your membership exceeds this, you can start the transition.

This is your safest route, but also likely to take the longest.

3. Switch when the revenue from your membership exceeds other sources 

When your income from your membership overtakes what you earn from clients or other services…

It’s a solid enough indicator that if you were to go all in and dedicate your time fully to your membership you’d see even greater results.

Alternatively rather than looking at the total revenue from your membership compared to other activities…

You could instead choose to calculate what’s called your ‘effective hourly rate’.

So this is where you consider all the time involved in the work you do…

Both billable and non-billable hours…

Look at how much revenue that time generates and calculate what that works out as on an hourly basis…

So, for example, if you make $2000 from a project…

And it involves 40 hours of billable work…

But then there’s an extra 10 hours of non-billable time spent on the admin stuff, dealing with emails and so on…

Then it’s taken you a total 50 hours to make that $2000.

So that’s an effective hourly rate of $40 per hour.

If your membership also makes $2000 in a month…

And you’re spending 5 hours per week on it…

Then your effective hourly rate is $100 per hour.

Every hour of input into your membership generates $100 in revenue.

Whereas, every hour of input into your client work generates $40 in revenue.

Working out your Effective Hourly Rate

This is not an exact science…

But it would indicate that the more hours you put into your membership, the more revenue you’ll make in total.

While this may be ‘thumb in the air’ stuff, it is useful in giving you an indication of when it might be time to make the switch.

How do you go about making the switch? 

When you’ve decided the time is right to switch, how do you actually go about it?

Well it’s important to know that it’s not going to happen overnight… 

You’re not going to be servicing clients today and then from tomorrow you’re only working on your membership…

We'd be worried if that was the case… 

Instead we recommend a process that involves steadily phasing out new and existing clients and projects…

This is one we followed ourselves when transitioning to focus on Membership Academy full-time.

Here's the process in more detail… 

Step 1: Grade your clients 

So this process starts by grading your clients A, B and C. 

If you’re not working directly with clients then replace that with projects, revenue streams, business activities and so on.

So grade those clients A, B and C based on factors like: 

  • How much they’re worth to you financially
  • How much hassle they are to work with 
  • Whether it’s work you enjoy, work that’s easy and fulfilling
  • Logistical factors i.e.if they pay on time etc

This will be a gut call…

Use your instinct, judgement and experience to do this grading.

Step 2: Put milestones in your diary.

6 milestones to be exact…

The first is the date on which you’re going to stop taking on new C level clients… 

So these are jobs you know are going to be a pain, not really what you want to do, but you do them anyway. 

I'm sure everyone takes on projects and clients like that, right?

Then your next milestone is the date you stop working with all existing C level clients. 

So you wrap up those projects, cancel any retainers or recurring work with them…

And let them know you won’t be able to work with them in the future.

The third milestone is the date you stop taking on new B level clients…

You see the pattern here… 

Then the fourth is when you stop working with all existing B level clients.

Then of course, your fifth milestone is the date you stop taking on A level clients… 

And finally, the sixth milestone is the day you wrap things up with the last of your existing clients – the final A level clients. 

This is when you end all client work or other projects and activities…

And your focus is 100% on your membership.

Putting your milestones in your calendar…

Following this process is a good way to make the transition as smooth as possible.

By eliminating those types of clients or projects that take up more time than they should…

Or that aren’t as enjoyable…

You’re ensuring that the reduced time you spend working with clients during the transition is time better spent…

And is time that’ll have a better return.

Of course after each milestone, you’d be increasing the time you spend on your membership. 

We also recommend reviewing the financial situation when each milestone comes around too… 

You should check things like: 

  • The balance in revenue between money made from your membership vs money made elsewhere.
  • Whether total revenue or effective hourly rate. Is it growing as expected? Are there any surprise changes?

You might even consider putting a financial target on each milestone. 

Keep in mind that you might need to take some risks along the way…

And you may experience some short-term hardship to clear the path for longer term success.

Should you invite existing clients to join your membership? 

We often get asked this question… 

It certainly doesn’t hurt to let them know about your membership and how it could help them….

But it’s important to keep in mind that they might not be the target market for your membership.

Most memberships give people the training, support and resources they need to do something themselves…

Whereas your clients are likely going to be people who want to pay someone else to do that thing for them.

That doesn’t mean they won’t join your membership…

But it is something to be aware of to avoid disappointment if you're counting on your existing client base for seeding your membership.

If or when you switch is really down to you… 

It depends on your current circumstances… 

Like the stage you’re in your membership… 

Your attitude towards risk…

How confident you are to make the move…

And whether it’s the right time for you – both in terms of your business and your life.

Hopefully after reading this you have some clarity on how best to move forward… 

And a plan of action for making the transition. 

This is a BIG decision and one not to be taken lightly…

But if you navigate it well and follow our advice it’ll be one that’ll pay huge dividends in the long-term. 

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