SaaS Interviews with CEOs, Startups, Founders
His Agency Has 30% Net Margin on 1,200,000 Top Line in 2015, EP 296: Rob Riggs
17 Jun 2016
Chapter 1: What business does Rob Riggs run and how did he start?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per talk. Five and six million.
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Chapter 2: How did Rob grow his business from $5,000 to $1.2 million?
At 24, he quit his $150,000 oil and gas job to launch a $2 million agency with 30% net margins.
top tribe good morning good morning you're gonna enjoy our guest today his name is rob riggs and he's passionate about helping small businesses and non-profits improve revenue and operate more efficiently so they can hit their business objectives he's worked with fortune 500 firms as well as small mom-and-pop businesses and enjoys implementing technology that can be best utilized by both types of organizations taking the big brand experience down to down market to smaller groups rob are you ready to take us to the top
sure thing all right let's do this man so first things first what do you sell how do you make money
So we do a lot of web development, so websites, web applications, and there are a lot of web companies out there that build five-page brochure sites that look pretty, and that's been fantastic. My background is in more the technical side, and so we build a lot of more technical, functional websites that serve kind of more business objectives. So whether it's
integrating functionality that that helps people on the front end generating revenue or on the back end streamlining administrative processes that's where we come in so you know back-end portals that people log into to access data or documents or yeah so tell us the real story of like the last customer that paid you was it was an invitation homes was the East Lake Golf Club who was it
So, yeah, some some of these are ongoing relationships, but we did build for East East Lake Golf Club, for instance. We built another website, which is gorgeous.
Looks great, by the way. Yeah.
Yeah. It has more to do with the photographer than anything else. Yep. But but they're a you know, they're a golf club.
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Chapter 3: What strategies does Rob use to drive growth through referrals?
So there are members logging in and they want to be able to, you know, renew their membership or schedule a tee time out there on the golf course and other associated membership related functions for them specifically.
And are you are these folks paying you on a per project basis or retainer?
A little of both. So some typically we will work with upfront on a project based level.
And what's your average project? What's your average price for a project?
Uh, for, so, you know, again, it depends on that, uh, that upper market or lower market. Um, but, uh, that, uh, that lower tier site, we start in the six to eight K range and to get people online and then, uh, looking at what drives their business, what's going to make them more successful. Uh, you know, we, we can help with them, uh, help them with the ongoing.
So that's the per project rate. When you're signing retainers with folks, what are they paying you? $2,000, $4,000, $6,000, $10,000 per month? What's the average?
So everything from, yeah, like you're saying, from the $500 on the low end up to, you know, we have clients paying in the five figures for heavy development work.
Okay.
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Chapter 4: What is the typical pricing structure for Rob's projects?
And how many folks do you have there at the firm, Rob? We have 12. 12. Okay. And what's your background? When did you get into this?
So my background is in development. I worked for a clothing manufacturer that did sports licensed apparel, sold those to Walmart and Target, those sorts of things. And where'd you decide to leave those guys? 2004, I left. I loved what I was doing. I was doing some programming and systems analysis, that sort of thing, and was really happy there.
But I wanted to be able to build things that people were actually using, clicking and interfacing with. And web was coming on. The advent of the website as user experience was becoming a big thing, and I thought it would be a fun project to do.
Chapter 5: How does Rob ensure efficiency in his agency's operations?
Interesting. So, and how old were you when you, when you launched it and started your own thing?
Uh, so I was, uh, that was what, 12 years ago. So, um, we, uh, I was in my late mid to late twenties, I guess. Okay. I built my first website.
Okay. And are you the sole founder of... What's the name of the business, by the way? We haven't given it out yet, but what's the name? YourDesignOnline.com?
YourDesignOnline.com. And are you the founder, the sole founder? I'm the sole founder. And I had a... At the beginning, it was just me doing everything, and I quickly realized that that was not a model for growth and started hiring people that were better than myself to replace me, basically, and it's grown since then.
Chapter 6: What are Rob's insights on investing in commercial real estate?
Awesome. And I always love asking this question. What was revenue your first year in 2014?
Um, in, uh, in 2004, um, our, you know, the revenue, I probably made, uh, you know, $5,000.
Uh, and profit or that was total top line? Total top line. Okay. And what, tell, give us the growth. What'd you do in 2015? So 2015, we were at 1.2 mil.
Wow. So yeah, that's, uh, and what will you do in 2016? Uh, We're looking to increase 15 to 20% each year.
So call it 1.4, 1.5 million.
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Chapter 7: What are Rob's thoughts on balancing work and personal life?
Exactly right. Very, very cool. Okay. And how are you driving the growth? I mean, is it just charging clients more and saying no to lower price clients or what?
Uh, so it's, uh, it comes down to, um, uh, small business is still my passion. Uh, and everything we do, even for the larger clients, uh, helps us put together packages that we can serve down market to the small mom and pops or the people with five, 10 employees. Uh, so that's still my target, but, um, I look to grow through relationships. 90% of our work is referral-based, so we do a good job.
Somebody recommends that I had a meeting yesterday with somebody that was a referral from an engineering firm that came as a referral from another engineering firm. That's what makes this happen, I think, is doing good service that gets your name out there in a positive light.
But then just going out there and meeting folks, there's some level of strategy in who you're meeting, the types of associations you're attending. But I really focus on meeting people that are marketing.
Marketing agencies specifically have a lot of talent in-house with strategy and design, but a lot of times they don't have the technical resource in-house to help take those concepts and put them online.
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Chapter 8: What advice does Rob have for aspiring entrepreneurs?
Well, so you've talked about client acquisition. I guess my question is, if you acquire more clients and keep doing what you're doing, you're gonna have to hire more people. So is that your plan? Or are you looking to turn lower to your customers away in the future so you can hit that $1.4 million mark?
I believe in growing to support. And certainly there have been people that we can no longer support well that are that lower budget. But my strategy is hiring in a lot of times we can have a system in place that will allow even some of our low level team members to support those quick turn websites that don't have a lot of that backend requirement.
So talking about efficiency in 2015, you did 1.2 million top line. What was your net margin? How much cash did the business make?
So we were able to keep probably close to 30% on that.
Oh, wow. Okay, so you kept about 400 grand.
Is that right?
Is that before you paying yourself anything or after?
Uh, that is, uh, that is after paying myself now. Um, and I'll say that, um, I do take a very small salary, uh, just to keep the bills paid.
What's small, like 30 grand, 50 grand, 80.
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