December 27, 2018

Diversifying your income streams to mitigate risk

Folks who are used to selling high-touch services in the form of custom client projects tend to confuse their labor with their expertise. In other words, they have a hard time separating their knowledge of the craft from their execution of the craft. To certain clients in certain situations, the expertise alone is valuable, independent of the execution.

Packaging up your expertise independent of your execution is a good way to start offering no-touch, low-touch, or medium-touch products and services to your target market.

Doing so allows you to dramatically increase the number of clients you can handle at once. Having more clients mitigates the risk of any one engagement blowing up on your face, which in turn allows you to get more bold with your guarantees and your pricing.

Okay, but what sort of packages might you offer?

The exact nature of these products and services differs fairly significantly from person to person. It depends on exactly what your expertise is and who your target market might be.

One way to brainstorm it is to start with a few lower price points and figure out how you could package and sell your expertise at those prices in ways that would be mutually profitable to both you and your ideal buyer.

For example...

Let’s assume that it’s not uncommon for your custom project work to reach or exceed $50,000.

Given that as a high bound, ask yourself the following:

“What could I sell to my ideal buyer for $50?”

“What could I sell to my ideal buyer for $500?”

“What could I sell to my ideal buyer for $5,000?”

NOTE: As you go through this exercise try not to change the buyer across the different price points.

In other words if the CFO of a mid-sized manufacturing company is your normal buyer, then imagine selling something to that same person at the lower price points; not to their direct reports or other subordinates or people in completely unrelated positions.

Give it a try and let me know what you come up with.