I was at a co-working space in downtown Phoenix with Erika, the marketing consultant I hired to help me promote my program.
We were brainstorming article ideas to get the right person (i.e. you) to read this post.
I had a brainwave and exclaimed, “the consulting business model sucks.”
The look on her face told me I struck a nerve.
Of course, she’s a consultant.
I’m telling her that her business model sucks.
I back-pedaled and asked some probing questions to help illustrate my point:
How much of your revenue is recurring?
Most consultants I know are hired guns.
They drop in, solve a big problem and then move onto the next client and next problem.
The common answer: none.
If you had to stop working for a month, how much income would you generate the following month?
I know a handful of consultants who supplement their income with book or course sales, but each product relies on an entirely different business model.
The common answer: I wouldn’t have an income.
If you had to sell your business right now, what would it be worth?
The intellectual property and process live in the consultant’s head.
That makes a consulting business very unattractive for a prospective buyer.
The common answer for how much a consulting business is worth: next to nothing.
Anyway, back to Erika.
We’re still friends and she didn’t fire me.
She even gave me the OK to publish this post, but my three questions hit a real pain point for her and other successful consultants.
I’ve seen it over and over again.
You excel in your field, whether it’s advertising, marketing, sales, SEO, customer service, or something else.
You command excellent rates for the time you trade with your clients.
You get referral business and land enough projects to earn six figures of income per year.
But, your business model is broken.
If you get hit by a bus, your income does too.
If you try to exit your business, you might get a tiny multiple of annual recurring revenue (if you have any recurring revenue).
And you’re the linchpin of the business.
You are the reason why your business is so successful.
You are also the reason why your business is brittle.
When you look at it that way, consulting does suck.
It’s not that you suck. It’s not that helping people sucks. It’s the business model that sucks.
You know something else?
I’ve been consulting for years and still do today.
I spend around eight hours a week talking to one on one coaching clients.
Technically, I call myself a CEO Coach but I’m still a consultant.
I trade my time for money.
My consulting work is as enjoyable as it is unscalable.
As a business model, it is as profitable as it is unsellable.
But I do it anyway, because it helps people and I enjoy it.
I’ve been down this road before.
In 2015, I was a partner in a Customer Success consulting business. We worked with companies like Oracle and Intuit. We helped many people, made a bunch of money, and I loved every minute of it.
Here’s a picture from a client engagement with Oracle – I’m on the bottom row at the far left and my business partner Nils is on the far right.
I was able to enjoy my time as a consultant because I had a productized service running in the background.
It was called WP Curve, and we offered 24/7 WordPress support.
The productized service gave me a six-figure salary and time freedom.
I had a team of people who knew exactly what their role was and how to do it well.
I could spend four hours or forty hours a week on the business – it was up to me.
We figured out how to scale it beyond ourselves and in 2016, GoDaddy acquired WP Curve.
I made a life-changing sum of money.
So I blew it all on a custom number plate for my 2013 Kia Optima.
Just kidding, it was $50.
After the acquisition, I spent the next few years scaling WP Curve at GoDaddy, coaching founders part-time and figuring out my next move.
Of course, it was in front of me all along.
There is a huge opportunity for lots of people to build their own productized service… but do it with way less stress than I did.
I made every mistake in the book, so you don’t have to.
Today, I help people build their own productized service.
To be clear, the consulting model might be a better fit for you if you love hunting down projects and getting paid right away.
Software as a service is even more lucrative and scalable, but it often takes years to get paid… so you need to raise funding or live lean for quite a while.
If you want to hit the sweet spot right in between consulting and SaaS, then you should consider the productized service model.
So where do you start?
Can it be big enough? Sure. There are plenty of examples of very successful productized services that are well into eight figures of annual revenue, like Main Street Hub. ProfitWell is a tech-enabled service that’s doubling revenue year over year, tracking at $8MM ARR with a 90% services margin. The list goes on.
So, what’s the catch?
You need to nail down the problem you want to solve and get to work.
Here’s a template to help.
It’s called the RESCUE framework and I use it to discern if a productized service is worth building.
Submit your details below and I’ll share the following with you, for free:
- A blank RESCUE template you can use for your own ideas
- Six videos to explain the meaning of each term
- A completed RESCUE template for WP Curve (24/7 WordPress support company I co-founded and later sold to GoDaddy)
- An 8-figure productized service business idea, plus
- An 8-week program to help you make the transition from Consultant to CEO
Here’s a brief preview:
Here’s a brief preview: