As we’ve mentioned, “scaling” a service business can be one of the biggest challenges with this business model. In fact, it’s a sticking point that keeps a lot of people away from freelancing altogether.
But if your goal is to get big or even to just avoid trading time for money your whole life, there are lots of ways to scale a service business.
If you’d like to learn more about starting a service business and connecting with your first clients, check out this in-depth interview with Abbey Ashley.
Abbey’s claim to fame is she booked enough virtual assistant work during her maternity leave that she didn’t have to back to that job she hated when her leave was up!
Abbey also put together this killer free training on how to launch and grow your freelance business.
Can I tell you about a side hustle that’s close to home?
My wife runs a wedding photography business with her friend on the side from her day job as an engineer.
In photography, portfolio sells. If you don’t have the pictures to prove you’re any good, it’s going to be hard to land high-value clients.
To combat this, my wife, Bryn, and her partner priced themselves ridiculously low to get business when they were just starting out. They did their first wedding for $200—split between the two of them.
But it made sense; at that point, they didn’t have any wedding pictures to show prospective brides. For those brides on their wedding day, they were taking a big risk going with these two rookie photographers.
Today they charge around $4000 for a wedding—a 20x increase in price for the same work. This has allowed them to scale up their income from their side hustle, all while working fewer events.
That’s one way a freelance business can scale.
Another way to scale a freelance business is to change the model. If you’re working with clients one-on-one, is there a way to transition to a group model instead?
Years ago, doing this took Daniel DiPiazza’s income from $18 an hour as a tutor for a big tutoring company, to $1000 an hour when he started hosting his own test prep classes.
Related: How to Start a Tutoring Business: How I Earn $1000/week Tutoring for the ACT
In New York, Nagina Abdullah is a weight loss coach for busy professional women. (She lost 40 pounds herself and had everyone asking how she did it!)
On the side from her day job in consulting, she began working with clients on an individual basis. She charged premium rates from the beginning: $5000 for 6 months of coaching. She reasoned her clients needed that high price point for accountability. “When it hurts a little bit to pay, people actually follow what you’re saying,” she told me. On top of that, she needed to make it worth her while.
But as a busy mom with two kids, the business was still limited by the number of hours in the day. She realistically could only work with a few clients at a time.
To continue to grow the business, she introduced a group coaching program called Spice Yourself Skinny. It included many of the same features as her one-on-one coaching, like meal plans, fitness routines, and accountability, but it was delivered in such a way that multiple people could go through the program at once.
The group program allowed Nagina to scale up her business and decouple her revenue from the direct time she spent with clients.
The next way to scale a service business is illustrated in the examples of Design Pickle and Think Maids. These businesses aren’t based on the business owner doing the work, but instead are focused on the results they deliver for clients.
Kai Davis dropped that on me during a recording for The Side Hustle Show: “Are you selling your time, or are you selling results?”
Selling results has the obvious advantage of freeing up your ability to get the job done any way you see fit. If that means doing it yourself, fine. But if that means hiring some equally or better qualified to do it, also fine.
This is what Abbey Ashley ended up doing with her virtual assistant business. She reached the limit of her own capacity, but had more clients looking for help. In response, she brought on additional virtual team members to do the work—effectively cloning herself and taking a percentage of the revenue as the business owner.
In my own painting business in college, I didn’t do all the painting myself. Now I probably did more than I should have, but I hired painters to help me deliver the work for customers.
Just like your dentist has other people in the office to take your appointments and do the routine cleaning, there is probably some room for delegation in your service business too.
Before you bring on a subcontractor, one model you might consider is the “productized” service. What that looks like is a given deliverable for a flat (usually) monthly price.
As in, for $1000 you’ll get two blog posts a month. Or for $200 you’ll get your grass cut every week. Or for $100, we’ll send someone over to clean your house. What this does is it lets the client focus on the result right out of the gate, instead of focusing on you as the expert blog writer, or lawn mower, or house cleaner.
The results are no longer tied to your hours. Even if you still want to do the work yourself, you can improve your hourly rate this way as you get more efficient.
As a customer, I use a productized service like this for my podcast editing. The owner of the company has long since delegated the editing of my show, but I still pay the same monthly rate. And I’m happy to do it, because I’m buying the result—not his specific style or audio engineering expertise. I trust that the team members he brings on are equally well-qualified.
Note: I edited this one myself, so apologies if I messed it up!
What happens if you’ve done all this stuff—you’ve raised your rates, brought on subcontractors, and “productized” your offering—and you’re still booked solid?
SEO expert John Doherty found himself in just that position, but came up with a creative way to actually get paid to turn work away. He set up his own private list of friends and colleagues in the SEO space, people he trusted to do great work.
He asked if they’d be willing to pay a finder’s fee if he referred them a new client. Given that John’s customers were used to paying $1000 a month or more for SEO help, it was an easy yes.
Since then, John’s actually doubled down on his new matchmaker business model, which you can check out at GetCredo.com. He and his team do the work upfront to learn about a business’s exact SEO needs, and then makes an intro to the agency they feel will be the best fit.
If they close the deal, Credo takes a referral fee.
My friend Wes “The Sales Whisperer” Schaeffer introduced me to an interesting way to set a service business up for passive income. Wes helps teams streamline their sales processes, systems, and workflows.
What that often involves though is setting clients up with new customer relationship management software, especially if their existing system is outdated (or non-existent). With years of experience in sales across dozens of different industries, Wes has the experience to recommend the best fit tools for each business.
And where the passive income comes into play is Wes has affiliate or reseller relationships with many of these services and software tools. He can earn his sales consulting fee upfront, and earn residual income from referring a new customer to a particular software that’s helpful in their business.
Over the years, this “passive” element of Wes’s business has become a substantial income stream. And it all just came from setting up clients with someone else’s products, and showing them how it’ll help them make more sales.
While Wes grew his business selling other company’s products, Alexandra Kenin grew hers by creating a product of her own.
Alexandra runs Urban Hiker SF, a tour company that specializes in urban hikes in San Francisco. She’d already employed several of the strategies listed here, including raising her rates, hosting group tours, and hiring subcontractors to run the hikes, but there was still another way to scale.
Alexandra had used the many urban trails to explore San Francisco, but couldn’t find a definitive guidebook to hiking within the city limits. Compiling her notes from years of exploring every corner of the city, she wrote her own guidebook: Urban Trails San Francisco. It was published by Mountaineers Books in 2016, and features a full-color guide to more than 50 trails.
For Alexandra, the book gives her a way to reach customers who don’t want (or can’t afford) to book one of her tours. It represents a way to bundle all her knowledge and expertise of the area into a product that can sell around the clock without her direct involvement.
She didn’t start out with the intent to create a product business, but it was a natural extension of her service.
Matt Bochnak did the same thing with his motorcycle repair business. He had the bright idea to film himself doing the repairs (which he was already getting paid for).
He published some of the videos on YouTube and sold some full repair tutorials as digital downloads. When we spoke, the product side of his business had matched the service side in terms of revenue. Since then, he’s scored deals for sponsored content because of his YouTube presence.
Which method of scaling a service business appeals the most to you? Which of these have you tried? Let me know in the comments below!