One of the biggest misconceptions in the online world is that services don’t scale, so once you get to the point of being booked out, you’re going to need to find other ways to bring in additional income.
I want to call this out. This is a common mistake as people rush ahead to focus on a course or program so they can grow, but they miss out on some major opportunities to fully optimize their services.
Let’s say you’re freelancing and charging $50/hour. It’s easy to get to the point that you’ve got 30 hours a week of client work and looking at the math and thinking, “dude, I’m totally full up.” You’re bringing in about $6000 a month at this point, which is a very healthy yearly income of about $72k/year.
But you want more. (Which I fully support – if that’s your vision – and we’re here to help you make it happen.)
So the question is, how do you increase that yearly income without working 80 hour weeks or breaking your back in the process?
Why a Course Isn’t the Answer
When you reach the point that you want to bring in more money and scale your business, the common online wisdom is that it’s time for an online course, program or passive income of some kind.
It seems like a good idea but before you go for it, there are some key things you really need to consider.
Having been down this path myself and created everything from a very successful membership site with 300 members, to a signature course, to weekend online training events, I can tell you this:
There’s not a single passive thing about passive income. Yes, it scales and lets you leverage whatever you create. But there are a lot of elements to passive income that people completely overlook.
Creating whatever you’re going to teach is just one part of the process. Then you need to build an audience, market it, deal with the technology to deliver it…and then, you need to support your customers and provide an amazing experience.
Phew. Not so passive after all.
Especially if you don’t have the audience or platform to reach the amount of people to make it profitable. Harsh, I know.
I’ve lived this exact scenario, and I’d be doing y’all a disservice by not being transparent about my experience. My first run of the Inside Scoop Academy: Marketing School just reached the “break even point” as I invested in branding, technology support and more to make it happen. (And that’s not even factoring in my time which was significant to say the least.)
The course went on to pay for itself in future rounds, but at the time I launched, I probably had a list of about 5,000 people. The smaller your list, the harder it’s going to be to reach the break even point, especially if you don’t have the budget to help you build an audience quickly via paid means.
This is why I dig taking the time to fully leverage and optimize your services, so you can build a solid foundation for passive income for months or years into the future.
Start by Raising Your Rates
Before you decide you can’t raise your prices – keep an open mind. You totally can do it and it’s the fastest way for you to make the most of the business you have right now.
So in the example we were using above, you were charging $50/hour. What if you could still work 30 hours/week but charge $100/hour six months from now?
You’d effectively double your income from $72k/year to $144k.
Obviously, you’re not going to be able to double your rates overnight, but you can easily stair step them as new clients come in the door, and adjust rates for your existing clients.
What’s great about raising your rates is that you’re not doing any more work, you’re just charging accordingly for the time, talents and value you bring.
Create a Signature Service
From 2014 to 2015, I was able to grow my services income by 2.5x. And when people ask me how, I tell them that it’s because I created signature services in my business.
Really? Yes, really.
It started with my signature service, The Story Distillery, where I work with business owners on their story and messaging so they have a clear roadmap for where they want to go in their business.
It’s based on work I’ve done my entire career, but I took the time to build a signature process around it with a workbook and specific methodology. Through that process, we’re able to uncover and distill their stories into a cohesive framework they can take away and use across all of their marketing.
I quickly became known as the go-to in my circles for this type of work and I steadily booked clients every single month. And as I booked more clients, I raised the price to get to my target price of $1297 per session. (I introduced it at $397 when I started!)
From there, I rolled this into another signature service, the No BS Copywriting Package which requires clients to do the Story Distillery.
A signature service lets you attract clients, own your zone of genius and charge a premium price. Plus, it’s so much easier to sell to clients as you can clearly articulate your process and the value you deliver.
Most of all, a signature service helps you productize your services so you’re not charging by the hour, but for your method and expertise.
A signature service enables you to make more for each hour you invest by streamlining the process start to finish, helping you, yet again, scale your business.
Let’s say you’re a designer, and you charge your retainer clients $100/hour, but you want to create a signature service around brand identity. You know that you can systematize that process, and it will take about a 90 minutes of time with the client, and then 6.5 hours of your time. So all in, it takes you about 8 hours start to finish.
So with your hourly, you’d charge $800 for this package, but that’s not nearly in line with the value of what your clients get out of this, so you opt to charge $1500 for the package. At that price point, you’re making $187.50/hour.
Let’s say you book two of these packages a month, which bumps your yearly revenue by $36,000.
Overall, with two simple actions – raising your prices and creating a signature service – you’ve gone from $72k/year to $180k which is completely doable over time.
And that’s just the start. As you get going, you can create more packages and signature services that enable you to increase your average hourly rate. Then, as you become more and more known, there’s more demand for your services and you can continue to scale your services – no course needed.
If you want to learn how to create your own Signature Service, you can steal my system by grabbing the worksheet below.
You can work online AND run a services-based business. It’s time for us to think a bit differently about our online businesses and be proud to serve.
