Steal These 8 Business Lessons From WAY Smarter Industries

**Brian Hood** (0:00)
This is the 6 Figure Creative Podcast, episode 381
Welcome to the 6 Figure Creative Podcast, where our mission is to help you turn your creative passions into a stable, reliable income. If you're in audio, video, design, photography, or really any other creative field, and you just want to learn from other successful creatives, you're in the right place. The average freelancer is absolutely clueless when it comes to running a business, and I can only say this because I did some of the dumbest possible things for the first five years that I was a freelancer. I think the biggest issue is that most freelancers, you included me, especially when I first started, we looked to the left, we looked to the right, we looked to our friends and our peers as to how we should be running our business, and this is a massive mistake because this is essentially the blind leading the blind in a lot of ways. I'm not talking about the skill set that you perfect. Obviously, the top 1% of your skill set is gonna know what they're doing. I'm just talking about when it actually comes to running the business side of freelancing. So today, I'm gonna pull lessons that I have learned personally from three other industries that I have worked in. These are industries that are filled with way smarter people than me and you. People that have figured out the best way to do certain things, not because they feel like it might be a good way of doing things, not because they heard it was a good way of doing things, not because they saw someone else doing it and they just wanted to try it, but because they spent millions of dollars, or in some cases, hundreds of millions of dollars, finding the actual best practices. And these are all things that if you just pay attention to what they have already figured out, you can charge more, give you more predictability in your business, have higher close rates, finish projects without tearing your hair out from the stress. And in all the industries I'm going to talk about today, I've built multi-six or multi-seven figure businesses in all three of these industries. So I've learned this stuff firsthand by studying what the best people in the world are doing in these industries. And all the things I want to talk about today, every single one of them, just one of them, could make a five figure difference in your business or more. But the last one I want to talk about is by far the fastest, the easiest, and the most helpful one that you could actually start implementing this month and see a difference in your business. If you're new here, hi, I'm Brian Hood. This is the 6 Figure Creative Podcast. It is a podcast for creative freelancers like you who are trying to sell their services and earn more money without selling their souls in the process. If you're a returning visitor or you've been here before, I'm a little sick today. My voice is just a little rough, so if you're wondering why I sound weird, that's why. But the whole point of this podcast is I bring influences from other industries into this podcast, from my experiences, from other people's experiences, from my team's experience. In this episode, I just realized I don't really think I've ever done a dedicated episode just talking about what I've specifically learned from other industries myself personally. So there's three industries I'm going to talk about today. The first one is SaaS, software as a service. The second one is hospitality. That's an interesting one. We'll talk about more of that in a second. And the third one is kind of the info and consulting world. All three of these I've been a part of. All three of these I've built multi-six or multi-seven figure businesses in. And for all these lessons, I've learned some of the hard way, some of the easy way. But I'm hoping that you'll take what I say today and apply some of these things to your business, or at least look at your business in a different light. So the first one I want to talk about today is the SaaS industry, software as a service. You more than likely pay for some sort of SaaS tool in your business, whether it's your CRM, whether it's your accounting tool, budgeting app, maybe use a workout app on your phone, maybe use a dieting app or a macro counting app. Shout out to my macro factor fans out there. I just started using that probably a month ago and love it. SaaS is a massive industry. It's not a niche anymore. It is its own industry. And much of the world has run off of SaaS. In 2015, I tried to launch my first SaaS tool. It was just to go back in time. This is the first side business I ever tried to launch outside of my recording studio. And it was a business in the Bell Bond industry. It was called Bell Better. And if you know anything about the Bell Bond industry in the US, it's massive. It's a multi-billion dollar industry. But it's all mom and pop Bell Bond agencies belling people out of jail. And they don't have any sort of central tool to actually run their business. Basically a CRM for Bell Bond companies. So me and my best friend Trevor, we hustled, went to different places to try to talk them into pre-buying our software as we started to build it out based on what they were saying and wanting. Ultimately it didn't pan out. But that was my first foray into trying to make that work. And there's a lot of reasons I could go into lessons why that didn't work, but it's largely irrelevant. But the first SaaS tool that we actually built, it was still me and Trevor, that actually worked was called FilePass. And FilePass still around today, still doing great today, still over six figures today. And that is a file sharing tool for the audio industry, specifically. It's kind of like Dropbox for audio, and a lot of specialized tools and use cases around audio, specifically audio engineers, some podcast producers use it, et cetera, et cetera. And straight off the bat, the whole reason the SaaS industry blew up, it's just software. Software's been around for freaking ever. Like Microsoft was selling software in the nineties for like early Windows products. But why SaaS blew up from probably 2010 on until now, and still huge, is because of the power of recurring revenue. This is the first big lesson that I learned in the SaaS world is how powerful recurring revenue is. In the freelance world, one-off projects are the norm. It's almost always the case. There are some cases where just the nature of your world, your niche, your industry, and your service is a recurring revenue thing, like podcast editors, recurring revenue. Great, you already understand this, but most freelancers are one and done. And one-off projects tend to suck because they're inconsistent. They're good because it's usually a big dollar amount. You get big lump sums all the time, so you can have really good months when you get two or three projects or three or four projects all in one together. But then it can be really bad for a long time because there's no consistency. You just have clients that are like paying you once and then goodbye. And this is literally what leads to the feast or famine cycle that most freelancers deal with. But with a SaaS tool, like in FilePass, we had recurring revenue. And with recurring revenue came predictability. And with predictability, it made it easy for us to budget because we knew how much we were going to make every month. And we could pretty well predict how much more we were going to earn the next month based on our revenue growth. It was an easy paycheck for me and my co-founder because we knew how much we could take from the company without bankrupting it. Because we knew how much was coming in. We knew how much was going out and expenses. We knew how much growth we were going to have. So easy paycheck for us. And then easy and reinvestment. We knew if we needed to buy something or reinvest in something, we just did a massive design overhaul. We paid a lot of money for. Easy to reinvest because we know what money is coming in. We know what's in savings. It's just really easy to run a business like that. But it does suck early on when you're first building up your MRR. Again, your monthly recurring revenue is the term MRR. Because generally, file pass, I think the average user is probably like 25, 30 bucks, something like that. When you have a hundred customers, you might have $2,500, $3,500 a month. That's not very much. And when you first launch something like that or when you first move, if you were to go for just a straight one-off projects to just recurring revenue, it can be a bit of a hit because you don't get that big cash influx. You're slowly building this baseline, this floor that's going up and up and up. And for the first while, until you hit your, call it your freedom number or just your bill pay number, it can be very challenging for people to make that transition. And so there's a lot of case studies in the software world. They were on the model where they would release new versions, get a big cash influx one time for that year or however long it took to develop it, and then they're not going to see any more money until the next year when they launch the new version. That's like the waterfall kind of software method. And they were used to these big cash influxes, and when they went to recurring revenue, they struggled, they didn't like it because it was like a small amount of money for a while, and they needed the big cash influx to keep that cycle going. So in freelance world, there are a number of ways to do this. We actually have a full episode on this. Actually, two episodes is a series offering recurring subscriptions as a freelancer, the Holy Grail of freelancing. That's episode 306 Again, you can get to it by just going to sixfigurecreative.com/306 to get to that episode. And then right after it, episode 307 is seven pricing strategies for recurring subscription freelance clients. So it's kind of a one-two punch. For those of you that are looking to get into this, there's a model that I really like that's kind of a hybrid model. And that is where you have an upfront payment and you have a long-term recurring payment. And you can adjust the ratios depending on your niche or your offer. Some industries where like, let's just say you're in web design, it might be a big upfront. You might get $5,000 or $10,000 to make a new website. And on the back end, you might have a very small, relatively small, $1, $200 a month kind of maintenance or maybe even $300 or $400 a month, depending on what you're doing, if you're doing like CRO or some sort of like long-term thing where you're doing stuff over and over again. But you can have the best of both worlds doing a hybrid model like that, where you're getting the big upfront and then the long-term tail. Sometimes you can do a big upfront and a big long-term. Sometimes it's just a small upfront with a big higher monthly recurring revenue. But that's the first big lesson that I learned is just recurring revenue, if that can be fit into your business model in any way, shape or form, absolutely do it because it is a game changer. When you get clients on recurring revenue, it is such a peace of mind that you get because you're not having to go find new clients every month or new customers every month, whatever your terminology is. And software is customers or users. In the freelance world, it's going to be clients. And there's a book, an older book called Automatic Customer. It's basically just talking about the power of recurring revenue. It's basically when you have a subscription customer or client, that's an automatic customer. They're an automatic customer until they decide they don't want to be a customer anymore. So instead of having to sell them every month, they're already sold. They have to decide every month if they want to actually cancel, which is actually, depending on how much value you add, it can be very sticky. The second big lesson I learned from the SaaS industry was the metrics obsession. I think this is one of the coolest things the SaaS industry did to my brain, was just help me understand what metrics matter, why they matter, and why I should track them, and how I should obsess over those things. So now if you saw my master spreadsheet for 6 Figure Creative, it is wild. It is hundreds and hundreds and hundreds of lines of metrics that I update every single day. And I actually have an episode on this on the podcast. I have like an episode of about damn near everything. This is episode 381 So chances are I've talked about this already, but episode 332 is called 7 Must Track Metrics That Will Make You More Money in 2025 And those metrics will still be relevant in 2026, 2027, 2028, and likely beyond, until AI takes all of our jobs. Just kidding, it probably won't, but we'll see. Maybe we should have an episode on that. But the main metrics the SaaS industry obsess over, and the first ones I kind of really learned, the first one is LTV. That stands for lifetime value. And that is essentially how much is one customer or client worth to you over the lifetime of that client. This number matters for freelancers, whether it's a subscription or just a one-off project. If you only have, let's just say you're a wedding photographer, you only really work with one client or one couple and do their wedding, and chances are they're not going to hire you again. And maybe you charge $5,000, $10,000 for a wedding. Well, then your LTV for a client is $5,000 or $10,000. Cool, that's not really going to change. In the music production space, which is my background, there are plenty of people that do recurring subscriptions on that. We can talk about that in a future episode if you guys care. But it was almost all one-off projects for me. But it was reoccurring. So recurring is monthly on an ongoing basis, or yearly, or annually, or whatever. Reoccurring is over and over, but not on a basis that can be tracked. So like when you buy a Coca-Cola, you might buy one today, you might buy one Thursday, you might buy one six months from now. I haven't had a Coca-Cola since I was 17, so I am not a reoccurring customer for Coca-Cola, but I had reoccurring customers or clients in the music production world. And LTV could be tracked by how many times did a band come back to me throughout the lifetime, or how many songs did they record me throughout their lifetime, how many songs did I mix for them throughout the lifetime, how much is one band worth to me? And luckily, I got into my CRM. I used close.io at the time, it's close.com now, and that CRM actually tracked LTV and helped me understand which of my clients were worth way more money. And this is important for a lot of things, but it's really important for this next metric, which is CAC, customer acquisition cost, or client acquisition cost, and that is the cost to acquire one customer or one client. And in the freelance world, there's kind of two costs associated with acquiring a customer. There is time, and then there's money. And then there's referrals. I'm gonna get into that in a second, because that doesn't really cost you time or money, although you can, again, encourage referrals that can cost time, it can cost money, you can send gifts, you can do a bunch of things around getting more referrals. But generally, we're talking about money. If you did YouTube content or social media content, and you're looking at like, hey, I spend six hours on content a month, and my time is worth 50 bucks an hour, then I spend $300 of my time per month on acquiring customers, I get two customers a month, or two clients a month, so my customer acquisition cost is 150 bucks. That'd be a way to factor that in when you just are spending time on it. When you're spending money, it's how much money do I spend to get a client? That would be through paid ads, that would be through referral partners, if you're giving a kickback to somebody for sending you referrals. And this is where these two metrics matter the most, together. What's the lifetime value of a client? What is the cost to acquire that client? This is especially important if you run ads, because in the music production space, there might be a client worth $1,000. They came to me to do one song, it was 1,000 bucks or $1,500 or $2,000, however long it takes to do the single. And if I were doing paid ads at the time, maybe it cost me $1,000 to get that customer or that client. That's not very good. I'm spending all or at least half of my money to acquire a customer, and then I'm spending my time to fulfill on the service. That's just awful. But then I realized, actually, the client will come back to me three, four, five, six, 10 more times throughout the lifetime of me working with them. So that customer is actually worth 10, 15, $20,000. Now, am I willing to trade $1,000 for a $20,000 customer? Yes, every day. And so in the SaaS world, they look at the ratio between lifetime value and customer acquisition cost. And that is one of the most important marketing metrics for the SaaS industry. And for them, it's like a three to one. And there's some caveats with that that don't really matter for this episode. But if you can get a customer that's worth, let's say, $1,000 lifetime, and you can spend $333 to get that customer, then that is a good thing that you can just throw money into for the rest of your life. But the third metric that I learned in the SaaS world is something called churn. Churn is how many of your clients or customers do you retain on a monthly or annual basis? And this is really easy to track in a subscription kind of business, because you can say if I had 100 customers starting this month, and next month only 97 of those are remaining, then three of those left. That's a 3% monthly churn rate. That's pretty good in most industries, 3%.