How to turn a service business into a product business

August 06, 2014

A lot of consultancies/freelancers want to transition to SaaS products, yet all too often mention these same friction points:

“We always have client projects running, so it’s hard to make time for products.”

“We know we want to focus more on products, but consulting is so lucrative that it is hard to turn away.”

“Fear of lack of money is holding us back.”

To make progress on your product (or even just start thinking about working on it), you need:

  • Focus and/or Energy
  • Time
  • Cash

As a service business, you are in a unique position to get all this, read on!

Enter “Indefinitely Sustainable Bootstrapping”

If you are like most first-time SaaS launchers I’ve met recently, the Long, Slow, SaaS Ramp of Death will apply, sadly. This means you need to plan for a marathon rather than a sprint.

Proper planning will give you the focus, time and cash to build your product and (more importantly) to grow your monthly revenue despite the ramp of death, without risking burn-out nor bankruptcy.

Let’s do this:

1 - Make your Product a First-Class Citizen

Instead of working on your product on evenings and week-ends, make it as important as a customer project:

  • Book dedicated days to work on it, early on.
  • Adjust your billable rates to make time (see my bootstrapping calculator).

Especially for your first product, there is a lot to learn, a great deal of unknown, and a lot of “moving out of your comfort zone”. Working on it from 9-to-5 rather than at night will help.

Working on your product must not be an afterthought or it will not happen, so it’s vital to think twice before grabbing more client work too!

2 - Find One Anchor Client

If you are busy doing proposals on a regular basis and jumping from one contract to another, you won’t have the required focus and time to make significant improvements to your product (or its sales).

Instead, do your best to keep one “anchor” client, for a fixed volume per week (typically 15-25 hours) and book your days very early on so that the problem of income is solved.

I prefer a regular, recurring part-time volume instead of full-time contracts every now and then. Being available “all the time”, even with reduced hours, make it easier to satisfy both my freelancing clients and make progress on WiseCash.

3 - Monitor Your Cash-Flow Tightly

When financial doubt slips in, you will be more tempted to say yes to an interesting client project. And if you do so, your product’s progress will suffer.

If you monitor your runway or “time-wealth” as I call it in WiseCash, you will have a clear metric to tell you that yes, you can continue working on your product without risk.

Heck: using this technique, our runway even increases as we work on WiseCash. This is a lot more energizing than seeing your cash go dry while your product sales take time to grow.

A little planning and focus can help make sure that your dream of transitioning from service to product becomes reality.

Thibaut Barrère (WiseCash founder)

@thibaut_barrere

thibaut@wisecashhq.com

Thanks for sharing this article around!


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