Break out of selling services to a product-based revenue model

The ultimate goal of my journey to building an online business is so that I can stop trading my time for money and earn a living through more passive income streams. This would allow me to watch my kids grow while living on a tropical island paradise and only having to ‘work’ 4 hours a week. Well, you get the idea.

Currently the majority of my revenue comes from selling services (consulting, freelancing, independent contracting, etc). Corbett Barr identified the four most popular online business revenue models and compared them with a cool graph.

As you can see, selling services ranks the lowest in terms of income “passivity”. Selling products is a much more passive revenue model and it better leverages your time as well — create the product once and sell it time and time again. This is why I am on a path to transition to a product-based revenue model.

Easier Said Than Done

Unfortunately, transitioning from selling services to selling products is hard. Here are some of the common challenges:

1. Significant time and capital investment required to manufacture, store and ship physical products. I would recommend selling a digital product instead. That was why I released Getting Started with WordPress as digital product.

2. No time to create your product. Any time spent creating your product is time that you could have spent selling your services. Or if you have a day job, it’s difficult to find time.

3. Tons of new stuff to learn. It’s often the case that you’ll be crossing into uncharted territory as you’re creating your product. I had to learn how to record high quality audio and screencasts for mine.

4. Resistance fighting you every step of the way. Doubts and endless distractions will crop up to derail your product creation.

At this rate, you’ll never create a product and you’ll be stuck selling services and trading time for money forever. I experienced the same problems, until I discovered the one trick that helped me get my product out the door.

Get Your Product Out The Door

The only way that you’ll ever get your product out the door is to make time for developing your product, i.e. schedule it into your calendar. This is the single most powerful tip to build momentum and completing your product.

You need to get honest with yourself and realize that you’ll never find the ‘extra’ time you need for your project. For myself, client project after client project kept landing on my lap which kept me from my own product development. That’s why you need to explicitly make time for it.

Treat your product like a paid project with a deadline. Give it the same importance as a client project. Again, be honest and realize that the reason why your paying projects get done while your personal projects don’t is because you treat your personal projects with less importance and they always get bumped down.

Another reason why personal projects fall by the wayside is because there are no consequences if we miss deadlines. There’s no one to yell at us if we don’t deliver on time. This is where you need to exercise your discipline. Enforce a no-favorite activity rule (TV, Xbox, internet, etc) if you didn’t spend a minimum amount of time working on your project for the day. This also frees up time to work on your personal projects.

Get your product out the door and now you’ve taken the first step to transition away from selling services.

Tips To Build Momentum Working On Your Projects

Here are some tips that I’ve used in my product development and personal projects.

1. Don’t aim to make money with your first product

I know that sounds like crazy talk but hear me out. Our first attempt at anything will usually not generate the best result. That’s the truth whether you’re playing a new sport, learning to drive or creating a digital product. What’s more important is the experience and lessons from that first attempt. It also takes some pressure off so that you can focus on completing your product and learn how to do better in the future.

So if we’re not going to sell our first product, what will we use it for? Benny from Get Busy Living used his first product, an ebook, as an email signup incentive. I’m giving away my Getting Started with WordPress course essentially for free but I’ve included my affiliate links in them so that they should generate some revenue over the long term. And if you get good feedback on your free product, you could upgrade it to a paid product by adding-on some content or deliver it in a different format (e.g. workshop).

2. Consistency beats volume

Work on your product on a regular basis – at least twice a week or every day if possible. You don’t need 2 hour blocks of time to work on your product, just do 15 minutes if that’s all you have. The goal is to build momentum.

I used to schedule 1 whole day out of my week to work on my own personal projects (my blog, creating products, etc). The idea was that I could get a lot more done by setting aside some ‘me time’. Unfortunately that didn’t work out too well because the realities of selling services kept knocking at my door and demanding my attention.

Now I’ve switched tactics and spend 15 to 30 minutes a day on my personal projects. This helps develop momentum for my projects and is almost like a habit where my day isn’t complete unless I’ve done something for myself.

The other benefit is that as momentum builds, I keep wanting to work on my project more. About halfway through my personal projects, I’m jones-ing so bad to work on it that I finish the second half of it in a quarter of the time it took to create the first half!

3. Raise your rates

If you are currently selling services and client projects keep busting through the door, it’s really difficult to find time to develop your product. One way to reduce your client workload but maintain your monthly revenue is to increase your rates.

This means that you’ll turn down a few clients (or a lot), but the ones you do sign on will be paying more per project to fill the gaps. If you can go from 4 client projects a month to 3 a month, I guarantee you’ll have more time to work on your own projects.

4. Don’t do everything yourself

You may be tempted to cut costs on your product by doing everything yourself, especially if it’s only going to be a free product. However that will expand the scope of work significantly and you might need a longer time to get your product out the door which kills momentum.

Try outsourcing or using pre-built solutions as much as you can. For example:

Dust Yourself Off And Keep Hustling

Inevitably there will be times when you just can’t make time to work on your product due to work and family commitments. That’s ok — don’t beat yourself up over it, especially since you’ve already deprived yourself from your favorite activity 😀

The important thing is to build up the momentum again and to keep hustling. If you fall off track, just pick yourself up and keep at it. Remember why you’re hustling to create your product and in the end, you’ll break free from selling services.

Are you struggling to get your first product out the door? Or maybe you’re a veteran and have got more tips for hustling. Do let me know in the comments!


4 thoughts on “Break out of selling services to a product-based revenue model

  1. Thanks for the mention! Creating a small free product is a great way to get started. I learned the importance of making it a quality product. If people see it is great, they know your paid product will have the same quality or better.

    Also selling a low priced product is a great start cause your first product won’t be perfect. It will be a learning experience for sure!

    Thanks for mentioning me!

  2. Interesting post! I have been doing the same, transitioning from MySQL/System administration ( to doing server monitoring as a service ( We hit break even just after a year, but did everything slow and organically, and most importantly self-funded. Feeling good now as the pressure is off a bit (no more throwing money in a possible black hole 😉 ), but still want to make things better and bigger.

    I’ll try your advice to take an hour or so out of every day, that seems like a very good idea!

    • Cool! I’m glad when my suggestions make sense 🙂

      All the best with Tribily too. I have just started experimenting with VPS, maybe I will be a customer when I start to monitor them much closer.

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