3 Steps to Effectively Add Products to Your Service-Based Business Considering new ideas to add additional revenue to your business? Here's how to find out if adding products to your service-based business is the right move for you.
By Katie Hunt Edited by Chelsea Brown
Opinions expressed by Entrepreneur contributors are their own.
As someone who has mentored and coached thousands of women business owners for more than a decade, I know the heart, soul and drive it takes to keep your business prospering. Particularly if you are the owner of a service-based business — where you and your work are the product being delivered to the client — it can be difficult to stay fresh and vibrant with your delivery year after year.
At a time when many of us are weary of the world's economic future, burnout among women in the workplace has been at record highs. According to Deloitte's Women at Work 2022: A Global Outlook, a recently released report that polled 5,000 women in the workplace across 10 different countries, women in today's society are stuck in what's being called the "burnout epidemic" on the heels of the Covid-19 pandemic.
This dilemma is certainly not going to be eradicated overnight — nothing the pandemic brought about can be. But one approach that I aspire to get more entrepreneurs on board with is to add a product (or more) to their list of services. Adding physical or digital products to your business can be a desirable strategy if you're looking to diversify your revenue streams. Furthermore, having a product to sell can reduce stress and burnout when you want to take time to revise, enhance or do a complete overhaul of your services.
Now, by no means am I saying adding a product to your service-based business is always a good idea. Different strategies are going to work for different businesses, and you have to decide what is right for you. But if you are considering adding a physical or digital product to your plate, there are three steps I suggest you take to help figure out if it's the right move for your business.
Related: Why Diversifying Business Revenue Streams Is Crucial To Your Success (And How To Do It
Step 1: Determine why this is the right business decision for you by reflecting on your end goal
Adding products to your current business can produce a lot of benefits — from bringing in complementary revenue streams, to freeing up your time through passive income, to furthering your position as a thought leader in your industry. However, you have to go into the process knowing it will also be a lot of work at the forefront. Designing, selling and delivering products is a much different business model than creating, selling and delivering your services. Selling products may require additional staffing, a shift in your marketing and development of new systems for the fulfillment. It can also involve different risks than running a service-based business.
Therefore, knowing the "why" behind your desire to introduce a product to your service-based business is essential. You need to have the end in mind, particularly in those beginning stages when you are creating the thing and running into the inevitable hiccups trying to get it off the ground.
Over the years, my clients have turned to product creation/sales for various reasons and have achieved great success. But success came from never forgetting their overall objective, which is why having your end goal in mind is a must-have step one.
Related: 5 Ways Service Companies Can Be Innovative
Step 2: Start out small, and be strategic in your creation
Do not get caught up in the spiral of trying to create and sell ALL THE THINGS. You will burn out much faster than any sales you make, that's for sure. Based on my personal and clients' experience, it is far better to focus on key products that will complement the rest of your business. I have found that a limited number of options leads to a higher likelihood of consumer buying, and the research out there proves it — more isn't always better.
To give you an example, one client of mine, Dani Bruflodt of The Daily Page, added $55K in revenue by adding a digital product to her ecommerce shop. Best known for her gorgeous planners, Dani wanted to create a digital planner that her customers could use on their iPads or tablets. Upon looking into apps like Paper 52, which allows users to import PDFs and use them, Dani turned one of her best-selling physical products into a digital product and made an extra $15,000 in her first year selling it.
Related: How to 'Productize' Your Service Business Offerings
Step 3: Assess whether you want to pursue physical, digital or both.
Gone are the days when product creation means manufacturing a tangible object. These days, digital products like ebooks, courses and phone apps offer endless possibilities to sell your content. However, physical products are still a viable option for you if you have an established audience and know the types of products they'd be interested in. Truthfully, there are pros and cons to each, and it will take a bit of soul-searching to determine which is the best path for you and your business.
If you want to dip your toes into physical products without having to house inventory or mail out products to your customers, leveraging a print-on-demand service (such as Printed Mint or Printful) is a great way to test the market. With print-on-demand, you choose the products you want to sell, upload your art, connect your ecommerce platform, and then every time a customer places an order, it is sent directly to your print-on-demand partner to create the product and send it to your customer. Print-on-demand eliminates two expensive and time-consuming pieces of running a traditional product-based business: production and fulfillment. However, you will pay a higher price per piece when using print-on-demand, because you're manufacturing one-off products rather than a high volume of inventory.
Digital products require time and expertise; specifically, knowing your core audience and then creating a resource that solves problems or pain points that your customers are experiencing. The best digital products are those that mesh with the services you're already offering and give people a glimpse into what it is like to work with you. Marketing and customer experience are critical pieces to successfully selling a digital product. Just because you make an amazing resource, doesn't mean that people will buy it. You have to have a thoughtful marketing plan in place to raise awareness and then a streamlined checkout system, so that your customers have a smooth process from purchase to delivery.
As a parting piece of advice: No matter what, make sure the product you're creating is something you are passionate and knowledgeable about. Remember, this is your product that you are bringing to the world. It should be a representation of your powers and strengths as a business owner and business. Investors are told to invest in what they know. Writers are told to write what they know. So, take my advice, and create what you know. There's only one you in the world to do it for us.
