ASK IH: Fastest way to 10K/month Profit, Service or Product business?
I've always had lots of business ideas and I'm actually already running a webdev side business for over 12 years. Now I finally want to step up my game and try to grow to 10K a month.
Now I have 2 idea's that keep coming up and where I'm working on, off and on.
One is a Service business, maintaining existing (WordPress) websites (and upsell dev hours/hosting/etc as I go). This is basically just narrowing down the message of my current business. So I just have to change the website and put my effort in marketing.
The other idea is a Product business, but building an mvp for this takes a lot of work. I do want to launch the product eventually since I think there is a need for (and I would love to have that product myself). Then I would have to build the MVP, build a nice website and do the marketing. The other way is not building the MVP and first try to sell it, but I feel like I have to show the product to really show what it's capable of...
But anyway, what would you think would be the fastest way to get to 10K/month profit? Given there really is a need for the product...
And... How would you approach this?
Building a new business isn't the fastest or best way to $10k/mo, the only thing a new project gets you, is a $0/mo starting base you'll have to climb up from.
This is good advice, as it hedges against the long, slow SaaS ramp of death: https://baremetrics.com/blog/long-slow-saas-ramp-of-death
I do have some recurring revenue from current clients and I would not close down my current side-business, so starting with $0/mo is not the route I would take :) I just need to decide where I will put my efforts. Good advice tho! Thanks!
I agree with Sebastien. It's much easier to serve your customers by meeting needs adjacent to the ones you are currently serving or figure out ways to automate or streamline existing ways you are serving them to grow margin. Good luck!
Service:
Pros:
Cons:
Product:
Pros:
Cons:
You mention you already have a current business. I presume you have existing customers / an audience with which you can leverage to build a service business. Especially if the service is your core expertise than this seems to be the easiest way forward. You have a market, a clear need (as they are already paying for something similar) and the expertise required to serve that market. Easiest way to approach this is to start talking to your current customers and seeing if this added service would be something they are interested in and would pay for.
As for the product business - I think a product business has potential to generate far more income than a single-person consulting or service company. But, it is much, much harder to find product market fit.
The last thing to mention is if the product and the service are related you may be able to do both. The typical example is a consulting firm with an expertise which solves customer problems with their insight, but retains their core IP and productizes that over time. This has the added benefit that you are essentially getting your customers to pay your development fees.
I also think that a product business is able to generate a larger income because you don't trade you time for money, that's why it's appealing to go that road. :)
But, what can be done faster...? My first goal (at 5K/mo I think) would be leaving my day-job so I can put way more time in my business and actually do something I like ;)
Oh absolutely. It just isn't the fastest way to 10k/month.
Obviously the faster route will be the service.
You said it yourself, the product will take a ton of work upfront. Even assuming a a strong need for the product - and that you’re awesome at marketing - it’s going to take months to build up revenue to that point.
Does that mean you should go with the service?
I actually think the answer is no. Since you posted this knowing the answer already, I have a feeling that you want to build the product. A lot of advice out there will disagree with me but I don’t like the idea of starting with a service if you truly want to build a product.
If creating an awesome service isn’t your end goal then I think you’ll end up half-assing it. Yes, it’s easier than selling a product, but if your heart’s not in it then I don’t think it’s a great use of your time regardless.
The fact is, yes a service is faster/easier but it still take an incredible amount of work for years. Why spend so much time trying to achieve something that you don’t want?
I say if you want to build a product, go all in on it. Look for ways to blend a service with it. Productized services revolving around your product are a great option for this.
Example: Your product idea is a podcast host that costs $39/month. One option might be to build a productized service that handles podcasting editing for $1000/month.
Some of your customers will take you up on this which lets you scale your revenue faster while getting paid to build a product. Just because building a product is harder doesn’t mean that you should start with a service in my opinion.
I guess you are right, the product is something I want to build anyway, and can even help me running all my other business ideas ;) Maybe I should go the slower route and persue the product first. I'm just thinking about my options to go full-time on my business ASAP, but ASAP is not always the way to go...
Here’s how it works. A service business scales faster in the beginning. You don’t need a website or any of that good stuff.
It’ll be easier to get to ten thousand.
A product business scales more slowly but can (in my opinion) go further than a service business with the same amount of resources.
How many team members do you need to service 10 clients? Maybe 3-4...
How many team members do you need to service 10 customers? Just you...