Grow Your Agency 10% Each Year Without Adding any New Customer or Team Member

Welcome to Peaceful Growth, where you will learn simple tips to grow your agency to $5M without working overtime.

In this issue, you'll learn:

• How to grow your agency by ~10% annually without adding new customers or employees.

• Why "Pricing Creativity" is the most powerful growth lever for your business.

• The key reasons why you should regularly raise your product and service prices.

• How to effectively communicate price increases to customers and handle price escalations (includes a free email template).

Add an Additional 10% More Revenue Each Year

Founders love growth.

When you think about growing a business, the first things that usually come to mind are getting more customers or increasing your team size (especially in a service business).

But what if I told you that you can grow your business by 5 to 10% each year—without adding new customers or hiring more people?

That’s right. Every year, I (and many founders I mentor) use a growth lever that increases business revenue by 5-10%. No new customers. No additional employees.

Want to know what this growth lever is?

Warren Buffet Generated $1.3 Billion Dollars Using This Growth Lever

In 1972, Warren Buffet bought See’s Candy, a California-based chocolate company, for $25 million.

Before Warren bought See's, the company was selling its chocolates for about $1.95 per pound. Instead of focusing on rapid expansion, Warren decided to take advantage of the brand's strong reputation and customer loyalty by increasing the price of their chocolates.

In the first year after the acquisition, they raised the price of See’s chocolates by around 10%, from $1.95 to about $2.15 per pound.

As Warren himself shared in a 2019 interview, these price increases contributed to more than $1.35 billion in total pretax earnings from See’s Candies over time.

The Power of Pricing Creativity

The rate you charge for your product or service is one of the most powerful—and underrated—growth levers available to you as a founder.

Let me explain how you can harness the power of pricing creativity.

Let’s say your agency makes $500K a year at an hourly rate of $100. If you raise your hourly rate to $110, that’s a 10% increase in revenue instantly. And guess what? No new customers, no new products, no extra hires.

I’ve been using this strategy in my company for years.

In 2023, We added an additional $96,000 to our business simply by increasing our rates. We also added 7% more revenue to our WooCommerce Plugin business by applying the same pricing creativity.

You MUST Increase Your Prices Every Year

Price increases are common—and they’re accepted as normal.

Look at your credit card bill compared to last year. You’ll see all kinds of price increases for subscriptions and services you use.

Here are a few reasons why you need to raise your prices annually:

• Everything gets more expensive with inflation.

• You need to keep your team motivated with salary increases.

• The services and tools you use are likely increasing in price, too.

• You’re constantly adding more value to your services, and that needs to be reflected in your rates.

How to Communicate a Price Increase

I’ve heard this so many times that I tried to communicate the price increase to my clients, but it didn’t work.

Well, nothing guarantees success in the game of price revision, but how you communicate this to your client will set you up for success.

Here is a version of an email draft that my team and I’ve been using to communicate this to our clients.

You might face some pushback from your clients, but here’s how to handle it:

• Ask them to agree on the new pricing but offer to apply it in 3-6 months.

• Let them know the revised pricing will only apply to new projects or developers moving forward.

• If they’re really not on board, skip the price increase for this year, but make it clear that it will happen next year.

Won’t We Lose Customers?

I know what you’re thinking: “Anil! If we keep raising our rates, we’ll lose customers, or worse, we won’t get new ones!”

Yes, a few clients might be upset, and some may even threaten to leave when you announce a price increase.

But if your service or product is delivering value, most clients will stay—and many will understand once you explain your reasoning.

If you look at the numbers objectively—without letting fear cloud your judgment—you’ll see that the gains in both peace and profit far outweigh the loss of a client or two from the price increase.

Key Takeaways

One key takeaway I want you to remember: every bit of additional revenue from price increases goes straight to your bottom line as pure profit.

Also, revisit your pricing every 6-12 months to ensure it remains aligned with the value you provide and other cost factors.

As a founder, you should also make sure 10% of someone's time in your company goes into pricing research and revision.

At this point, if you are inspired to level up your pricing creativity and skill, I highly recommend reading this book — Pricing Creativity by Blair Enns.

👋 Until next time, Anil / CEO & Co-Founder of Multidots.

P.S. Please share what problems you are facing while growing your agency so I can write more about those topics.

More Ways to Grow Your Agency

#1: I’ve interviewed founders who have scaled their businesses from $500K to $10M. Want to hear their secrets? Tune in to the Peaceful Growth Podcast for insights on how to grow your agency.

#2: As a founder, you are the most valuable—and most expensive—asset of your business. If you’re not learning and growing, you risk becoming a roadblock to your company’s success. Subscribe to Learn + Grow for tips on leadership, health, and productivity to keep you at your best.

#3: We’re always looking to invest in good and profitable businesses. If you’re ready to take your business to the next level by tapping into my network and expertise, reach out to me at [email protected].