4 Steps to Make Your Service Like a Product so that your Business becomes Scalable, and More Profitable!

Does it sometimes seem that you are reinventing the wheel with each new client? Do all the custom extras you do for your clients eat into profits?

Clients love getting a solution customized to their needs. It’s what makes services so valuable. And also why you can charge premium rates for services– and your clients will pay them.

But, all the customization means more details for each project. Making much of what the work your business does 1-off projects. Which is slower, and more costly to deliver.

Then, as you near your personal capacity as the owner, the balls drop. Stress increases. And so do the hours. And you’re left with little energy for anything else, especially finding the time and energy to grow the business.

Let face it…

If you offer highly customized services, it’s very difficult to grow your business.

And this was the conundrum Bob (not his real name), the owner of a marketing firm, found his business in.

Every request his clients had, they’d say yes to. All of these out-of-scope billables were eating up time and profit. Projects got pushed out, and all the delays cut into the number of clients they could handle at one time.

The the bulk of your value lies in your time tested process that’s proven to get results. And as you move away from that, it’s easier for your service to become a commodity. Which is what was happening in Bob’s business.

Bob was also finding that the more he was at his clients’ beck and call, the less they valued the service.

The lack of focus positions your business weaker in your market.

And when you do that, your clients will trust your direction less.

In Bob’s case, he was getting so far from their sweet-spot, that his clients considered his business their go-to solve-everything tech solution. Instead of the indispensable partner that can help them drastically increase their sales.

As a result, they were unable to deliver the amazing results they are capable of. And most projects were shorter term, with less revenue per client. Meaning that new projects coming in the door replaced business that left. And that pattern brought years of stagnant growth.

Over-customization is one of the reasons why…

Most service businesses will never grow to scale

And most businesses that work with clients solve this problem by the owner working more. In Bob’s case he was already beyond 60 hours per week. And once you max your time out, maybe you look to hire more bodies to fulfill the custom work.

Then you run into a problem…

The more customized your service is, the harder and more expensive it is to find staff to deliver quality work.

You are basically looking to clone yourself. Which is expensive since you’re so amazing. Right? Your versatility is exactly what enslaves you to the business because often you are the only one who is able to do it all.

So to solve this you can hire the best in the field to service these highly customized individual client projects. But since these pros are expensive, you’ll further cut into profit. They’re also harder to find. Harder to retain. And harder to replace.

The value they bring to your business comes from many years of expertise, not your proven system. So that experience and value to your business walks with them when they leave.

And there’s a gaping hole to fill, which usually means more stress and hours from you the owner.

The bottom line is this…

Unless you take steps to improve service profitability, revenue growth will not equal profit growth.  

To be more profitable, and have an simpler business to manage, do this instead…

Make your service more like a product.

Instead of 100% customization, customize 20%. And leave the rest to your proven process. Offer only your best services to position yourself top of niche, rather than everything to everyone.

You will get watered down results if you are stretched so thin, running around doing all those tasks that only you have the expertise in. You don’t need the best superstars in the industry. You just need to create a clone. To create a clone, you’ll need to pull out what’s in your head. Rearrange the bits. And organize it in a simple to follow system for your clone to-be to follow.

4 Steps to productize a service

4 Steps to Create Your Profitable and Scalable Service Product

 

1) Solve a problem worth solving

Focus on most profitable clients and project types. And narrow in on a specific problem to solve, where there is a market need. Then offer your services as a package with clearly defined promise and outcomes.

When your service has a proven method designed to address a specific problem for a specific customer, you’ll get the high value benefits of a service, with the scalability more like a product.

Your business will be able to deliver your outcomes more profitably, and you can even charge a premium because your proven process delivers superior outcomes.

 

2) But everything we do is so custom…

Bob didn’t think he could create a repeatable system for his marketing service. “Everything is so custom” he told me. And it wasn’t far from the truth.

As we dug deeper we found that the tacked on scope extras took 1/2 of his time as the owner to deliver to clients. But only accounted for 10-20% of revenue!

Bob saw that by eliminating these low profit, highly customized services, he could service a lot more clients, and better. Which meant an increase in quality, profit, and huge growth potential.

Since their service was incomplete without these add-ons, he developed a trusted partnership with a technology vendor. His clients are now better served and he has eliminated more than ½ of the stress from his business. It has also cleared up a huge chunk of time every week for business development.

Once you are clear which services are your profit winners…

 

3) Work Backwards

What outcome do you want for your clients? How do you want the experience to feel like for them? What experiences do clients currently have that are less than desirable? ie. frustration, missed deadlines, etc. Write these down!

Now that you have the end goal in mind, you can bake the steps to get to these objectives  right into your process for delivering your service to your clients. To know which steps to add and where, look from a different angle and get curious.

Are you currently getting your desired outcomes for you clients? If yes, what actions are contributing to that success? When would be the most sensible time to put this step into your process?

For example, if you want your clients to submit support requests via a support page, you might include explanation about how to get support in the project kickoff meeting. Without setting the expectation for your policy on communication, you are by default choosing a lot of back and forth emails or phone calls which isn’t the most efficient or client pleasing way to run your business.

Recording the steps make it automated so it will clear up mental bandwidth. It also ensures balls don’t drop, no matter who does the task.

To do that you need to…

4) Break it Down

Break down your process into specific detailed steps that anyone with a base level knowledge could do. This will become your Service Product System.

Depending on preference, you can start by outlining the main areas of your service. You can use an outline to make what Owen from Sweet Process calls a Minimum Viable Procedure. Then record the steps in explicit detail so that someone with base level knowledge at the task could do it (ie. graphic design new grad for a design position).

Now that all steps in the process are detailed, parts of the process, or the entire process can be confidently delegated to a qualified competent staff member. This need not be an irreplaceable 20 year veteran.

This staff ‘owns’ the process so they are responsible for further streamlining and process improvement (with your approval).

For a more profitable and easier to manage business, identify your most profitable services that your business can deliver at a superior quality. Eliminate what is NOT profitable so you make space for more growth opportunities. Then follow the 4 steps above to make your service more like a product so that your business can have scalable growth and increased profit!

About the author of this guest post and how to download her free Scalable Service Toolkit!

Mandi Ellefson is a Service Scalability Strategist. She helps successful B2B service business owners recover their free time and grow a passively run service business. Download her Scalable Service Toolkit to recover 20 extra hours per month with just one tweak.

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