Service as a Product

I had a good fifteen minute conversation last night empowered by some Smokehead whisky. Consultants usually charge a certain amount of money per hour for their services and the contract lasts for a certain time. The markets at least where I operate have pretty stabilized prices, but are there alternatives? Can you charge more?

Now, I like reading and I have pretty much covered all books Robert Kiyosaki has written. One thing he talks in his book Retire Young, Retire Rich is leverage. When he talks about leverage he talks about anything that can leverage income. In real estate this could be debt, but in consulting business it could be your knowledge, skills and ability to sell yourself for your clients. When you started working as an entrepreneur you probably did this because you thought that you could get more leverage through better hourly rate and tax advantages.

You might have reached the level where you are already working full day, so you cannot get leverage by working more. In addition, you might have problems increasing your hourly rate. You might have already became a guru in a specialized field which already pays top dollars, so you cannot get much more. What then? Maybe you can sell your service as a product!



Lets take a simple example of a web designer. If you want to get 50$ per hour from your work and creating a web page from scratch takes two regular eight hour workdays, you charge in total 800$. Nobody likes to do the same thing twice, so you probably create a really good reusable template from the page. But what do you do if the customization of the page takes only one day and the customized page is as good as the original one?

Do you charge your clients only 400$? Probably not.

Do you charge your clients two days? Probably not.

The product could also be packaged and wrapped nicely. If you want to compete with prices and get more customers, you sell your customized web pages for 399$. If you already have a full load and want to increase your hourly rate, you sell your customized web pages for 599$. If you want to get reputation as a top notch designer, you sell your customized web pages for 799$ and use one extra day polishing the pages.

Does this apply to your business?

I would summarize this blog to a few ways to leverage your work:

1. Work more
2. Become a freelancer
3. Get better in what you do
4. Convert your service into a product