Why Start A Productized Service Business

The Design Startup Show

Hey design starters. Today, I would love to talk about the reason of why you should start a productized service business. If you are already having a design agency and you are still doing invoicing and doing bespoke customized. Design services. This is something that you should think about, maybe not to start mine, but to kind of iterate your model towards a more productized way of serving your clients instead of doing more financing instead of doing more consulting.

So I'm just going a bit into it based on my own experience. So. I was a graphic designer. Freelancer went out when it was like 2020, or so those are the days and happy in my life then. And then my kid was born in 2013. That was when there was no way for me to be serving my clients at the same time while I'm babysitting.

Right. And I realized that my business could run without me. I couldn't just leave it as it was just. Things would just go on. I can just, I can just do other things and define what will be done for my clients. I mean, it makes sense. Isn't it. So I was the bottom name, all of it and searching for solutions.

I tried to create other tech products thinking that services can never be skilled. And I'm sure, you know, thinking that we as well, you want to scale your business, but you are always. The one to deliver. You are always the one to do the sales. You're always the one to be the customer service. So in this way, who are everything for the business then of course services can never be skilled.

So I was thinking the same thing two, and I thought maybe I should do, uh, A SaaS product, which is a SaaS software as a service. And there may be only way to remove myself from the business at skill skill, this business, while earning any income. Right. So sounded like a really good deal for myself. So I was equipped.

I've always been equipped in fact, with decent coding skills. And I thought that I could create the next Facebook or YouTube. Right. And once I do the, I don't have to work forever. So after a few fields set startups, um, I, you know, I did everything under the sun. I did parenting SaaS. I did food at the timing and.

I'm flooded by many lessons. So I found out I was wrong about how startups and businesses work. I was wrong. That coding is the only skill I needed to find freedom. And I was wrong to think that, you know, SAS product is the next big thing to create. There are many, many lessons to learn and things that lead to successful businesses.

It's not just the type of business. Right. So in fact, I was wrong that service businesses cannot scale. So I did some soul searching and realized it comes down to one thing. I just wanted a business that can scale. So it could be anything doesn't have to be a success. It can be a service. We just have to kind of make it and build it such that it can scale.

So this business that I built can create processes, can create systems. And what if somebody can just take over this and run it? So I didn't need to write from, I didn't need to create assessment from scratch or fiscal product to remove myself because things will come back to the same thing. Again, even if I create a success.

I will be so used to being the one, doing everything. I mean, and I'm doing everything in the SAS business as well. So that doesn't helped me to learn anything that helps to scale a business. Right. So it's not the type of business. And so in 2015, what I did was at box stock, a part of what I've been providing as a freelancer into a productized service business.

And that was when I was on the way to build an asset. Right. And that allows me to help more people and bring me the freedom I've always wanted. So one reason where you, where you should. Build yourself, a productized service business. You already know what is good as a designer. You already know what you need to create as a designer to give good stuff to your clients.

So, because you already know that part, you don't have to, you don't have to start from scratch, right? So the first reason will be to remove limitations on your earning potential. So how does that work? So for myself, I've been working my way, not just to remove myself as the bottleneck. I'm also moving towards improving my wealth, my health and lifestyle.

So in the past I tried everything to do more in less time. I'm sure you have tried to do more in less time, but so long there's only one of you, one of me, which there will always be. There will never be two of the same. You. Something has got to give, if you start to try and push on as many things as you can in an hour.

So in a freelance and consulting models, more like bringing in more clients may have to bring more profits, right. And more of your own individual flavor to your client's work because it's customized. So when you want to earn more, while you do is. Very commonly you see people raising prices because they raise prices.

They will take the last client book. I'm sure you have done that before. I had done it before. So freelancing and consulting can be profitable if you want to be in a week because you can increase price. Right. But the truth is no one can multiply oneself. No one can add more time to once a day. Right. So more this already, you shouldn't be expanding that side of things.

So the good news in life is there is always a way you can remove that limitation on your own potential with what you know. So one way is to identify a set of common items that are notch percentage of the market. What might you buy? Which is what something we have done here. My design agency and this. So knowing that there is a huge market of demand people, businesses who want to, you know, kind of turn out graphics on an ongoing basis, it's a huge demand.

There will always be somebody who needs that help because this help takes time to help them to save time and effort. Right. So there will always be. So it's a large percentage. So knowing that what we did is we packaged up small, simple services, and then we grow the team to keep producing the same thing and sell this one thing to as many clients as you want.

So instead of making yourself work the hardest so that you can serve just that few clients for big. Big big pay the big paycheck from each client. Now you are extending your client volume to as many as he wants. So it's unlimited, right? There's unlimited potential in that because all of them will want your kind of service and you hire people to service this volume.

So in a way you can remove limitations if you start upon outside service. So essentially you are selling a product the next advantage or benefit for, with this is there is no back and forth haggling, quotes, invoicing, you know, and, um, and you know, you want negotiation and all that because I've been doing this for 10 years, I've been a freelancer.

And negotiation of my rates was a classic waste of time. Now that I think about it, because if you think about, you know, seeing getting a Mac, you can expect to go to an Apple store to buy a Mac for something less than anyone else by bargaining for it. Isn't it kind of, can it be the same for your services, your design services, right?

I should, I shouldn't be allowing this negotiation of, of design services. In my own business, right? So starting a productized business changed all that for me, I used to be a generalist, providing everything from brand strategy, advice, logo designs, to full on web designs. So within this huge space of design, all my clients will ask for one thing without fail, why they were asking for that same service, many times.

So what they will ask us to make changes to things like colors, forms, spacing, images, and texts. So knowing this, I simply put together a monthly service that provides simple graphic edits at one fixed rate. I don't have to take the time to create one from scratch just for each client and then another different client.

And then one for new clients. So also there's no need for them to wait for me to update them with my quote, and then we will negotiate four weeks. So that was what happened when I was freelancing right now, when I productize it, it's just one price and they are either in or out. So you got to also understand that there will be people that you haven't seen no to, or people who will say no to you and you got to live with that.

Meaning if they say no, and the property has already okay. Convincing from you and they want to carry on to sign up for your product or service. You got to be fine with that because you know, if they come in not feeling good about it and not happy with this kind of arrangement, then you are making it hot for yourself as well.

Because down the road, you have to try to live with the client who, who is not so happy with such a model, right? The next. Reason for studying apartheid is there is no scope creep, right? This is one of the worst things that can ever happen in a service-based business, especially in design. And I also had my fair share.

So I totally understand how you be feeling right. And I used to have clients who promised the only easy, minor, and few changes to a seemingly simple artwork. You know, it always seems easy at the start. Yeah. Everything is easy to clients. Oh, this is just a simple artwork that I need. I just need my interchanges.

Could you do that for me? And it all there so easy that I could have just worked on them for free, right. It really sounded that easy. So I took on the work and after a few rounds of changes, the clients started asking for new requests, such as change of tax image positions. And they started to ask for improvements in the original design.

So before you know, it, you know, initially it was supposed to be a few minor changes and now that changed to become. You know, from a few hours or an hour of work into a few weeks of major design overhaul, and overall we need like tons of research work and figuring out how this would look better. And I mean, not just better but better for the client's clients.

So this is another whole new level of design work that we all know, right. Because the sprint strategy and all that. So it's not, they're not supposed to be in the same group in a sense, but people think they are right. And people think that these are easy for us because simply beyond magicians, right. As they think.

So the, the budget remained the same. They, they pay the same amount, but the time effort. Was stretched way out of proportion. So things like that can happen. And with the productized service is different because right from the get-go, there's this one price for a limited scope and, or within a limited time span.

So you kind of limit the scope, you give a price and maybe sometimes fan for that. And that's it. Right. So instead of you having to wait for clients to request for anything without boundaries, you will set the scope first and predefine it. So you don't things, things that you shouldn't ask your clients when you are having a productized services.

So what do you want? You don't ask them that what you've held customers is this is what we do, right? You got to be brave and put this up because it works when you haven't done it. You wouldn't think in books, you will work. Right. But, but just try that immuno one for the first one, but even worked for the subsequent ones you should really try.

And clients would definitely have a clear understanding of what will be delivered to them at that given price, because let me tell you a very big problem when it comes to customize to work in design, is that many clients don't trust. How did I use this book as well? So as a designer, I may not trust that client to be able to fix what they want and stop their changes, but it's also a mutual kind of feeling.

You know, where the clients see us from the clients also see us as well, these designers, I'm not sure if they're milking us. They may think like that. And this is something that you need to think where you need to, you need to understand that it's not just as a designer, how we feel is right or not, because what clients feel are also right.

They can be right. And if they feel that we are milking them, then we should set our pricing right from the start. Right, because that's what we said. And we will touch you at this price. It will not be more, it will not be less. So this is the price you can budget for the rest of the year. So this is what you want to give them.

And with that, they will trust you even more. So this is another reason really, to having a product piece of this. Right? So another very good reason because there's no scope creep, there's no need for any. You know, upfront quote, quotes or invoices, you have no more chasing. You are not going to chase any more payments you charge upfront before you start the work.

Right. And in my freelancing days, I hardly get paid for all the services I was offering before the works. That's. What I did before as a freelancer was I did the work first and then I waited for the payment. No, because I just wanted to do everything my clients asked for. You know, I was a people pleaser.

I also not just to also not just to try to please them, but I want to provide as much value as possible. So you guys also know that, you know, as a design agency, you want to provide as much as you can so that they will jump ship and go to another agency and that's normal. But if you are going to start to first.

You're going to have a lot of issues choosing the payment after that, because you don't know what's going to happen, right. It's not that they want to cheat you, but you it's just that you just can't predict what's going to happen to you. What's going to happen to them. What's going to happen to things around you and I have been through this where I've done the work and in my, my client had to close down right.

Due to certain reasons, maybe health, maybe. Maybe they may have just cold shot because there's no business, but the client is not getting back to me at all. So I have not heard from my clients from then to now and, you know, means I really don't know what was the reason. It may not be, it may be my, my design quality.

It may be, then it can be anything. But the point is if they have pain right from the start and I've done the work and given it to them, Then there is this fair exchange, isn't it? So right now it wasn't a fair exchange and it's, um, it makes things harder for you as a, as a design agency. Right? So that's one and another thing about choosing payment, if it's really tough to know what's the total price, if you are not productizing your service, right?

Because you wouldn't know how much changes they'll be asking for. And. That was what happened at the time when I was a freelancer. And you don't know how much time had to be taken to work on this, even for yourself, it can be quite hard to tell. You can just say, Oh, I'll go. I can take one hour, but sometimes it doesn't take one hour, right?

It can take two, three hours. So the most I could do at a time was to get a pet deposit right before the work started at like a 50% down payment. And then after that was completed, I will send a final invoice and I can tell them most clients never paid me on time and half the time I'll be sending them emails, messages, day after day, chasing for the payment.

And that's just not only one client, but quite a few clients. Can you imagine you are an agency with 50 clients and you have what, like 2030 clients do chase for payment. That means you are on a deficit in your, within your profit margin, in your business, right? That's probably, you're going to run a business.

Really. You have people to hire, you have already hired people to do the work for the client. So don't do that to yourself really. And because when I will sell, when I'm selling a product or service, now clients will receive a standard set of deliverables at a fixed price. And the price is the same every month.

Oh, I don't know how long it would take. I don't know how much it would take. How much do you have to spend? I don't know. How much is your budget? No, such thing. It is just fixed. I've already calculated back in the start. So without this variables to be coded and invoiced, we can sell a package service, just like any product to be taken off the shelf.

So if the client needs one, they would just pay it, paid for that package before bringing it home. In a real case scenario, the work starts only when the payment is made. So send it since this change was made. I never have to chase my payments again. All right. So basically a productized service can help you to, to, to book on repeatable service and recurring income.

So the possibilities of a productized service are, as far as you can imagine, you can package one quick deliverable. For example, it can be icon designs and then low price. Or you can put together a series of services. For example, a local web design of C maximum five pages. Like homepage about contacts.

You know, I'm just giving examples. It can be really depends on your customers, right? Five social media images, graphics. You can set them at a higher price on a subscription basis. Is, is up to you on who you hire, what are your overheads and who your clients are. And what your service provides, right? So the studies you come up with really depends on who you wish to serve and, uh, expertise you and your team can provide.

So just like a box of pre-mix, right? Someone can pick it off the shelf with all the ingredients are mixed together, including the packaging. And what happens here. If you can replicate the exact same service to a different client. Simply by expanding your workforce without having to be the one, the single person, putting your head down to do the work when you don't wish to do so, you provide the same type of service to people who need it repeatedly and you get paid a recurring income.

So what's not a lot about this. Start your productized service as soon as you're, as soon as you can. Yeah.