Service based business. Oh, the ebb and flow. Sometimes you’re booked, sometimes you’re not. And this feast and famine money situation can be stressful. You have bills to pay. You have the basic human needs (which hopefully) your service provides but what about the other stuff? The business expenses you have can be terrifying when you have an uncertain paycheck. Luckily, you can have a service based business with other sources of income and today, I’m sharing with you three basic options for doing just that. Cutting back on the famine and still enjoying the feast.
Before I get started, though, I want to share a little something that having a business and a full time job has taught me. When you are providing a service, you want to make sure that you have the time to actually provide that service. If this is your bread and butter, then you want to make sure that you allot yourself the time to make sure that your service based clients are the happiest with your work that they can be and you don’t have yourself stretched so thin that your services suffer.
With that out of the way, let’s talk strategy.
1. Digital Product Store
I’m sure you’ve seen these all over in service based businesses. Either someone has a shop on their website or maybe they have it through a third party like Etsy or Gumroad. Though this is probably not going to pay your rent, having a small store within your company can produce revenue without you having to do much of anything once it is set up. I’m sure you have heard by now that passive income isn’t really passive, but this kind of offering is as close as it gets. You create the content once and sell it over and over again to many different people.
Some examples of digital products:
- An ebook
- A contract template
- A workbook
- A video course
- An e course
- A bundle with a collaborator
- A printable planner
And the list goes on and on.
The nice thing about “passive income” like a digital store is that the content is there and you are not trading hours for dollars like you are in your services. Having a digital product means that there is very little overhead and expenses associated with it and it means that you can create a system that takes care of everything from payment to delivery for you while you are getting your nails done or at your day job. And let’s be real. Who doesn’t like making money in the shower?
One of the cons of this is when your systems fail. Systems fail. That happens. When this does happen, you have to be ready to correct the issue and be aware that things can go wrong. Being mindful in this situation goes a long way.
2. A Membership
Here, I’m going to plug my own membership a little, but it’s because I built the Toolkits membership to do nothing more than pay for my business expenses.
By building a membership that could a) pay for itself and b) keep me online, I built a valuable product at a reasonable rate that serves a specific function. Now you may be thinking, “But I want it do more than pay for my hosting.” And that’s fine too. But by building something that assures that your expenses are paid helps to keep that part of the pressure off of a service based business owner. Now here is where things get nitty gritty.
There are lots of questions that are associated with a membership, but here are the big ones that need to be answered above all else:
How is this going to provide value to the people that need it? Am I providing that value?
How can I share this at a reasonable price?
What is the overhead look like on a membership?
With so many options out there for hosting a course or a membership, one might think that they have to pay all the fees to have some swanky looking thing. But in reality, you can start small. All that you need for the start up of a membership is a great, valuable something behind a paywall that enables you to charge for the value you have. And really, there shouldn’t be a whole lot of overhead for creating a membership.
I have also been asked why my Toolkits membership is priced the way it is. Really quick I’ll share the formula with you.
(price idea) - 3% (stripe processing fee) - 40% (taxes) = (profit)
If this profit is something that functions the way I want it to and creates a reasonable sales goal for me to a) continue to provide the membership and b) have the membership pay for itself then it is priced correctly. Right now, Toolkits is priced at a rate that will continue to function the way I want it to and meet the needs I have for it. In the future (as it grows) there is a very good chance that the price may actually lower because it exceeds my needs. ←- That may seem really counter intuitive for a business but I would rather provide a really affordable option to people that want to work with me without being able to pay for my service right now. It also gives me the opportunity to get to know Toolkits members and meet folks that are just awesome.
3. Set The Bar Higher
So this one is kind of cheating because it doesn’t actually require anything additional to your services, but it doesn’t make it any less true. Have you ever wondered why people spend hundreds or thousands of dollars on shoes and handbags? It’s all about the quality of the product and the market positioning. I wrote here before about positioning and why it's a powerhouse must for any business, but it is the defining factor between one kind of business and another.
High end businesses attract high end customers. Period.
So what this means for your business.
Your brand needs to be on point. You need to have professional looking collateral, including your website, your logo, your business card, and all the other stuff that comes with looking like you know what you are doing and your worth what you’re charging.
Your branding needs to be on point. This means that your tone, your voice, the way you interact with people as a business needs to be incredible. High end businesses create high end experiences.
Your pricing needs to be on par with your look and feel. High end service providers know that the service they provide is worth what they charge. They don’t give discounts to gain business. They are no longer looking to build their portfolio.
What this does not mean for your business.
That you can charge whatever the eff you want to. Keep it reasonable and in the price range of your target market. What is the point in having some one particular group of people that you are talking to if you are charging way out of their zone of happy? There isn’t. Know your market and charge accordingly.
You have to spend an exorbitant amount of money on your brand. A brand and branding can be developed to be killer without trading your first born child. It doesn’t have to cost an arm and a leg. Know that when you price out designers and view their work, that what you’re paying for isn’t just the final deliverables. It’s the experience, the quality of your time spent together and for the reputation of the designer.
You get to be an asshole. Yeah. Ego can be a really ugly thing. Keep humble and go farther. I’ll keep this one short.
Cheating aside, all of these are solid methods to provide a little extra income to a holy moly amount depending on how you pursue them. Will they replace you 9-5 income? Probably not. But income that you don’t have to trade hours for dollars for or even have to pay much attention to can be super nice. Do you have a different method? I’d love to hear about it in the comments!