Most business owners who provide a service that’s project-based have one big problem in common… And that’s scaling.
Think about it: The only way to scale a project-based operation is by increasing the number of projects you bring into the business every month. Because more projects mean more money. However, the more projects you bring in, the more employees you need to hire. And with that many employees, you now have to keep producing at an increased level just to keep the engine running. Oh, but you also want to make a profit? Well, now you’ve got to bring even more projects in… and so on.
Here’s an example
I have a company called 90-Minute Books, and what we do is help entrepreneurs write books. It’s a project-based business. We take somebody who wants to have a book through a project where we create that book for them. So far, so good. But here’s where it gets complicated: To scale that operation, we need to increase the number of books we produce each month. And that requires a recurring system that brings new people in who want to do books. But it also means that if we want to create more books, we must hire more people to work on those projects.
And so, once we have this whole infrastructure in place with the team that supports it, we need to keep producing a certain number of books just to keep everything running. It requires we find new people to work with every month. A project-based business is never a one-to-one profit ratio, and your baseline infrastructure requires certain revenue levels to keep coming in, no matter what.
In other words, a project-based business model is like a never-ending hamster wheel. And not only do you have to keep running to stay afloat… you also have to keep increasing your run speed if you want to be profitable. But hold on, there’s another possibility: One solution is transitioning to a subscription-based model.
And the way you transition is…
Instead of doing all your projects for clients, you adopt a “one for one” model. Which simply means… Every time you do one project for a client, the next project you do is for you. (With the intention to syndicate it.) And you keep doing it until you transition your project-based business to a subscription-based model. The good news is there’s always an opportunity to think about how to deploy your resources in a way that will yield recurring revenue.
Your industry doesn’t dictate your business model. Your mindset does. And you can easily transition from projects to subscriptions with the “one for one” model.
For more scaling tips, head over to the podcast.
