Over a million developers have joined DZone.

How to "Productize" Services and Use Ecommerce to Take the Leap

DZone's Guide to

How to "Productize" Services and Use Ecommerce to Take the Leap

· Agile Zone ·
Free Resource

Whatever new awaits you, begin it here. In an entirely reimagined Jira. 

Service businesses are a great way to get started with your entrepreneurial dreams. Bring your skills to the table, execute work, deliver it on time, and get paid – as simple as that.

That’s fine if that’s “all” you ever wanted to do.

However, service businesses are not the right vehicle just in case you wanted to do more, grow big, scale as big as you like. If you have the typical dream of amassing wealth, building recurring streams of income, or even “sell” or “exit” at a later date with cash in the bank, service businesses are not even a case in point for potential investors to consider.

Assuming you have the typical entrepreneurial dream, service businesses will soon hit a bottleneck. They’ll seem like a fancy job you got for yourself, or as if you were operating as a freelancer. If it’s a service business, it’ll soon turn into an albatross around your neck (not to mention clients from hell, scope creeps, unpaid invoices, and tons of other problems associated with service businesses).

Further, you’d suffer mild bouts of insanity (to put it in a positive way) just trying to find the right talent to “replace you.” On top of it all, clients somehow get trained to hear from one person. Or worse still, they’d want you to deliver your work personally. That’s the reason Oliver Emberton gave up his web-design consulting agency after 10 successful years. It’s also the reason why Moz moved into software services and many freelancers move on to build SaaS businesses.

Service businesses are hard to scale. Even if you do, the talent crunch and the operational hassle always causes you a pinch. It might all look good on paper but it might not.

If you don’t productize services, you’ll be stuck in a rut. Forever. Trust me, running a business is challenging. Service businesses are at the top of the league when it comes to the level of “challenges” you’ll face.

The solution? Productize. Ecommerce helps. Here’s how:

Keep the lights on

Just because service businesses have all these challenges, it doesn’t mean you jump ship right away. Just like it’s a good idea to hold on to a regular job while you work on a side business or a startup, it’s just as good to keep the lights on, run your service business, until you start selling and profiting from another “productized” business.

Oh yes, it takes a lot of “you” to make it happen on the double. You have to run your service business and actually run an entirely parallel business on the side. It’s hard work, and it takes a lot of “you” than you can imagine.

But that’s the safe way to do it. That’s the sensible way to do it. Keep the cash coming with your service-based business till your products bring in a smooth cash flow.

Jump to your new, productized business when you are ready.

Change what you deliver, to scale

Say you’re an illustrator or an artist, stop looking for clients to come to you, make custom requests, and then check off deliverables one after the other. This is how normal, one-person service businesses work. Instead, create finished deliverables on spec. Use your creativity, insights, experience, and market demand to come up with a series of artwork that you can put up for sale.

Sell your art online using services like GumRoad. There are specific market places – online and offline – to sell your work for every industry.

Most services can have productized versions of work to deliver.

Writers: Create ebooks, entire websites with copy, ready-made sales letters, etc.

Designers: Sell graphic artwork, web elements, icons, vector art, social media designs, and more.

Developers: Sell web frameworks with frontend connected to database, working ecommerce templates, basic HTML 5 + CSS3 templates, etc.

Think about what you can offer that doesn’t require you to bill your time.

Offer a single service by productizing it

Look at what Dan Norris’s WPCurve does: more than 62% of all websites in the world are on WordPress. But unless you have a team working on WordPress all the time, many small business owners and individuals have problems that need fixing time and again. So WPCurve provides you those “fixing” and many WordPress related services – for a single monthly fee. Another business that has productized WordPress with a different approach is WPKube, which offers resources, news, themes, plugins, coupons, tutorials and even courses on WordPress.

Can you take off those 30+ items on your service catalogue and offer only one, simple, scalable service that still provides incredible value to your customers?

Once you identify that service, let ecommerce come to the rescue. Use a functional website, setup payment processing, work out the actual business plan, and simplify your business.

You can also scale such a service business. It’s just too hard to scale when you offer a hundred services.

Bundle services and supplementary products

See if there’s a way you can bundle two or three similar services and/or products that complement your main product into one package and pitch it as a recurring service on a retainer.

Often, web designers bundle SEO, annual website maintenance, upgrades, etc. Digital marketers provide many more services bundled together as a one-stop shop for a retainer. Artists bundle voice-overs with videos or podcast creation. Some artists even provide cover art for the final project. This is the opposite of the above section on focusing on a single service. It’s your call to make.

One of the most successful examples of bundling is Shopify. To go along with their ubiquitous ecommerce platform, they offer a web store builder, fully integrated POS system, retail credit card processing, and pretty much everything else you need to sell online.

You get the idea?

The thing to remember is that not everything gets into the bundle. The products or services bundled together to be simple enough for your team to execute. It should be simple enough for your clients to understand. Finally, the combination of all these services should command a premium enough on the retainer to ensure sustainability.

What issues do you face with running a full-service company? Do you see a way to productize your service business? Can you do a Moz?

Please share your entrepreneurial journey with us in the comments.

New roadmaps, more flexible boards, and dozens of new integrations. And that's just the beginning.  

agile ,ecommerce ,industry ,product businesses ,service businesses

Opinions expressed by DZone contributors are their own.

{{ parent.title || parent.header.title}}

{{ parent.tldr }}

{{ parent.urlSource.name }}