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Feb 24, 2021

Podcast 04: How to Productize Your Design Service Business

Podcast 01 on what you can learn from the design startup show

Episode Transcript:

Hi guys, welcome to the design startup show today. I would like to talk about how we can start a design business that you can scale by productizing your services. So essentially, essentially, it’s it’s um, how you can productize your design service business. So, first and foremost, what does it mean to scale?

When you think about scaling, is it talking about just earning a lot of money? Are you talking about having a lot of clients I’m talking about being global? So you got to decide on that. On your own for yourself, what it means to skill. Um, and to me, I think that it’s more of being able for it to run the service, to run without being in it myself.

So I can remove myself. I can kind of run the business and has half as many customers as I want to work with without me being in it. At all or all the time. So if I were to be in it for, uh, for just, you know, a few hours a week or not at all, and I can have as many customers as I want, um, relying maybe on the hiring or automation and they can still be fulfilled with my business promises.

I feel that that is scaling to me. So, so you could have first decided on that. Put it down and make sure you remember that. And the next thing would be, how much do you want to scale? So at first you are talking about scaling, but after that, how much would you would, this is enough, right? So you’ve got to decide on your scaling level, your revenue, your income, so that, you know, it’s not just paying your bills.

You should be already being, be able to pay our bills. After you have grown, you have enough profit to invest. And do other things. Um, and that’s when, you know, you can start scaling because you can start investing in things like hiring and, and, and automation to run your business. So, so how much is that?

You’ve got to decide. So for me, my plan is within this next 10 years, I will be able to. Build an asset, a business where it’s not, not only just running on his own, but I can have the profits where it gives me at least $250,000 in residue or passive income every year. So this is what I set for myself to give myself that number that I can reach towards.

Right. So that’s my goal. In five to 10 years time from now. So decide on that for yourself, decide on that number so that there is something for you to work towards rather than thinking it can be as much as you want. And nothing is enough not. We got to set that number for us to feel that it’s enough.

That’s when we are able to motivate ourselves. If. Along the way, right. Rather than thinking that it’s it’s way too high and way too, too above us. But we have the number to set us, uh, to know how many customers to bring in, to know how much we must work per day. Uh, and this can give us a better guide, right?

Uh, along the way, the third thing is to check on demand. So, uh, you have, these designs of is for example, you want to design or you have been designing logos for customers. Um, so if let’s say you are just starting out and you want to know if, uh, let’s say you have been designing logos and you want to keep kind of make this logo a black and white logo, for example.

So your productized service is such that you package it to be. Um, just black and white logos that only have three options, three design options, and say one revision, for example, this is just an example, right? You got to check if there are enough people with this problem. Of creating black and white logos for you to reach your level of skill.

Okay. So now you’ve decided your level of skill, your, your goals, your, your, your income level revenue level. Then you need to check if, are there enough people in this world to use your service, pay you this much, and you can reach that level of revenue, income, and all that with these demands, right? So, um, I’ve made this big, big mistake, uh, where I focus too much on the solution rather than the problem.

So this point here is to tell you to hone in on the problems that people have and then see how many people have the same problem. And if you are going to serve these people, will they meet the expectation that you have in the first and second point on the scaling level? Okay. So if you start with the solution first, for example, if you say, Oh yeah, I’m great at making logos.

I’m great. Making black and white logos. I should just do that. And, um, so that was the mistake I made in the first place. And, um, it just made me keep thinking that what I’m creating is so awesome. Right. And I just fell in love with my own solution. So that may not be what people are compelled to people.

It may sound good. It may sound good to my friends. It may sound good to your friends, right? And your friends. That’s a good idea. You should sell it so good at that, but will others who don’t know you once, uh, firstly, to pay that, to kind of solve the daily frustration, are they are enough of these people to even pay for that too, right?

And, and after that, you got to understand whether if this problem is something that’s repeatable, right. When it comes to logo design, is there something that one customer needs it all the time? Is it something that, um, many customers need it many times? So if your level of scaling is a hundred customers, every.

Every month. Let’s see. I mean, you may never know, but you know, this, this is just an arbitrary number. You may want to have a hundred customers a month and earn a certain goal of say 10, $10,000 a month. I mean, this is just an exact cool. Do you think you will have enough, um, customers who have this problem of local creation that they have to come to you and, you know, Keep on doing that every month and hundreds of them doing this every month and paying you enough so that you can reach 10,000 a month.

So you need to ask yourself that. So there may be there maybe not, but you need to find out, right? So it can be logos. It can be infographics. It can be designing, um, email templates. It can be designing everything. So for me, it’s. You know, I’m running, uh, uh, uh, this graphic design, uh, service business, where I offer as many design revisions as you want in the month.

This is a flat rate design service where people don’t pay based on the kind of design people don’t pay based on the number of revisions. In the design or number of options, but they just paid by month and we just turn out the designs for them as, and when they need them. So that’s, that’s a recurring one that I found out is because whenever I, I work with clients, they always have tons of revisions.

Right. And, and charging them can make them go crazy because they wouldn’t know how many regions that they can budget for it. So having this. Model that I have give them that, that, you know, that control and it empowers them with the budget that they need to set aside every year. So that it’s standard.

Right. Um, if each. Each month they had just have to pay 500. They know each year it’s six, $6,000. That’s it for design. And that’s nothing more, nothing less. So this is the problem that I’m solving. The problem I’m solving is it’s quite a few. It’s like the budget, the revision costs the, the, the varying, you know, surprises that they get in each invoices from, from designers.

So, um, as a designer, you wouldn’t want to keep thinking of your design and final your design and thing that all my work is so good that they need to have half my work. You got to get out of that first and look into problems that people are having first. And one problem is, is, is good. The next step is to go into, are there many people with that same problem?

At the back of the mind with that in my, then you work with one person back down to one person, right? Just to get your solutions, um, clear that your solution is something that they want. The next thing, the next point is to, um, then because you have that demand, uh, in mind, you decide on your offer, which is deliverables, right?

So you go through your, uh, research and you realize, Hey, no, no, 10,000 people from this group that I have research from, uh, say that they want a black and white logo designs and they will want to kind of, uh, make changes on them every month. You know, due to certain reasons. We don’t know why, but you know, you got to find out, you know, your offer.

You’re you’re, you’re the problem. They are. People have where you can offer that solution to. So, um, now that you have, uh, known that you will decide on the item to deliver, which is black and white logos and revisions every month. Right? So you, the next thing is we’ll just go to predefine that with debt offer with the deliverables, you’re clear, right on what you, what they are getting, what the customers on their end will receive every month.

You put that as a fixed package. Okay. And narrow down all services to only help those with this one problem that, you know, people are having. For example, it could be Shopify blog images for beauty products. So in this sense, what people are receiving. Uh, these people will be beauty product sellers, for example.

Right? So they’re, e-commerce people and they sell beauty products. For example, beauty, let’s say, um, lipsticks. Okay. Just lipsticks. They just sell that. So you can, you know, kind of design blot images for these lipstick companies and your blog images will have, um, women or men or anyone who use this lipsticks.

Correct. And, and that will tailor to these people who sell lipsticks. And that’s it. So if people who come with you and say that I sell eyeshadow, I want to create eyeshadow, uh, blog images. If you are only selling lipsticks and you want to stick with that due to the reason that it’s easier to design and, um, package, then you stick with.

Your lipstick design, and you will tell the, the eyeshadow seller that no, I only designed blog images, for example. All right. But if, of course, if you put it as a beauty product, put yourself as beauty product designer, then, then yes. If it’s a shadow product, you will also do it for them. But the point is you craft one solution for one problem and for one person first.

Yeah. Uh, difficult from your mind, you know, that there are probably millions and billions of e-commerce sellers selling beauty products, but you just base your, your package based on one person’s, uh, issues, first, their problems and challenges. So you can kind of speak with one beautiful Accela and ask, Hey, you know, um, what kind of design work do you usually need all the time?

Like, you know, every time like daily. Monthly and without stopping and you have to pay a certain price that sometimes you don’t really wish to pay for. So the person may say, Hey, I just need blot images every time. Because every day I produce one image and, and I, I do, um, beauty products. So my, my blog images have to tailor to what’s people who want beauty products.

And there you go, you have one person with a problem and you craft a solution to solve that. So this is your offer, right? Your deliverable will be five blog images each week with beauty products or beauty graphics that you’ve created for the blocks. And that’s it. And that is your deliverable for us, for them fixed fee, it could be $20 a week.

It can be 300 a month. You can fix it as that, or we can fix it as. 50 block images for $50, for example. And that’s it. You sort of have to ask for more, ask for less, uh, you can tweak along the way when you have created your packages and, um, and move along the way from there. But you start with one first, right?

Then the next thing is you will have to decide on how you run your operations. Uh, with unlimited capital capacity in mind. So you’ve got to go abundant here, right? You, you, you shouldn’t be thinking on, um, how am I going to do this? Because I’m only a one-man show. And like, I can’t handle all of this, uh, 50 graphics for 5 million people.

You know, you, you may think like that. And, uh, that was how I thought about in the past. And I had this limited belief that I can only, um, work for what, with. A few clients in a day. And that really, you know, kind of, uh, put me down a lot, a lot more than I could have because it, it tells me that he, I can do so much more.

So I just, you know, subconsciously make myself do this right. And what with less, but I got to go abandon here to first start thinking and designing the operations to be able to help. As many people as you want. All right. Firstly, first thing, first, you are not going to do the work on your own anymore.

Right? You’re going to set up a process to complete your deliverables, to match your offers. Promise. So, so ask yourself if I have hundred customers with that same exact problem, what do I do to provide them the solution that I’ve promised. So you promise that you would give 50 blot images designed to this first customer at the end of the week.

And imagine you have 1000 or one, 101,000 to 1 million customers coming to you, and you’ve got to deliver that 50 times, whatever number of customers you have in five days. How are you going to do that? Right? So now it’s just a rough number. You, you, it’s not there yet, but you have to make it and design it, such that this can happen and your operations must, must match this capacity.

So you need this. I will higher manpower on demand or whether I use tech and automation. You all will. I use both, right? Well, I’ll use AI and manpower. Uh, or one of each. So you got to decide right now, um, at the end of the day, how do, how do these operations in your company run first without even doing anything yet?

Okay. So how decide how many customers. Um, two, one designer. So one designer, how many can, how many customers can do, what are they? You said that, for example, for us, we have tried different things like designer to work with eight customers, day 12 customers, five customers a day, and for about one hour, a day per customer for about two hours a day per customer.

And we see how that goes. And that’s fine because. There are many, many designers who want to have a stable job and to work with us. So if they wish to work as a hired full-time in-house employee, we are happy to take them. So these are people we’ve worked with, who are willing to work with customers a day, um, nine to 6:00 PM, and then they’re off and they’ll come back the next day.

Right. All working remotely. So this is what I have decided for decided to do. And that is what we are doing now. It could be the same for you, or it could be something else you could, you can say, Oh, um, I will have, um, you know, two senior designers to kind of. Managed them. And there will be AI at the back end to help producing certain logo concepts, and customers will look at them and feedback, you know, things like that.

You can create those. And just to ensure just when sure. Right from the start that you can serve a million people. If you add on these, uh, manpower. Okay. Um, so that is, that is much important now, so that you won’t get into too much day to day operations after this, then you have to set up the communication and deliverable channels.

Right. For example, on my end, we have the email only a selection or plan. Okay. Or the two project management tool. And we have another plan where people can have calls with us and real-time chat. So why, why designed this now is because you already know what is required as a design freelancer, as a design agency, as somebody who, who handles design world, you know, what is required, you know, that, you know, in collaboration, your customers may come to you and, um, Ask for some concepts or ask for revisions or explain to you the brief and things like that.

Do they need, do they need to explain a lot? Do they need to only just pass you some assets and images? What is the collaboration involved? Do you need only a email or do you need, um, some certain form of other, uh, Deeper way of communication. Do you need to even meet up in person? Do you need to use video?

Right. So for us, we wouldn’t want to meet up in person. It’d be harder to scale. Uh, it’s not impossible. It may be something that you want to put into your operations. If there is demand, right. It’s hard to tell. So it’s really depends on how your design services is like, and it’s going to be to solve a certain problem.

Right? So for us, it’s not, and it will be fully remote for now, at least. And I can easily serve a hundred customers, 1000 customers. So, so long the one, well with me. Um, so you need to decide on that right now, after you have decided on that you will move on to your organizational chart. What is an organizational chart?

Uh, it’s. It is that formal table where you see different hierarchy of, uh, employees or hierarchy of, of members in your team. You don’t need many, many levels. You just need to set the levels for yourself, where you can easily scale. So for mine, I started off with CEO, CFO, and COO. When it comes down to, um, the key key people of day tasks, like project managers, senior designers, um, and the down to junior designers, all we need at the start is pretty much junior designers, but I designed my organizational chart to grow.

So if. Right. The start, when you’re doing this, you may be doing everything which I did. So I was a CEO. I was a little bit of a CFO while my husband kind of helped me along the way. I was also the CIO. I was also the project manager. I was also the junior designer. So I was everything at a start because I had to design it first and make sure that things run well before I hire hire another designer.

Right. After I ran for, with a few customers, I realized I could hire and relieve myself of the day-to-day design work. That’s when I started to have more designers and you can see the upshot starting to be filled with other people in the team. So design this first. Okay. Right from the start with the rest, uh, other points before this.

So you’ve got a, an a in this organization chart is. Really to, you know, decide on the rules so that in future, you know who to hire, you can also put in the cost and price and all the hiring fees, uh, in your projection, if this organizational chart, then you don’t have to worry, right? But along the way, will you incur too much, too many calls, too much calls and not be profitable.

All right. In this plan, if you follow it will be profitable. All right. It’s because, um, the next thing, next point after this high organizational chart is about financial projections. That’s when you create an Excel sheet. Okay. Blue sheet to key in all the calls you think are possible to reach that level of scale that you want to go through.

So, so the first point first and second point of, of putting out the level. Of where you want to go is very important because now you’re talking about the cost, uh, how much do you need to put in to get what you want? Right. So you need to know what you want us to know how much to, how much cost to fuck out.

Right? So now you put down all the costs of hiring of tools, anything that is considered a business expense, even your salary and your Texas, right? All in this Google sheet to project. What is going to happen 10 months down the road, two years down the road, three years down the road, will you be profitable?

You use this to fit in all these costs to know, okay then, because you have this projection, you can tweak your pricing of your packages, right? With all the calls you can say, okay. If I put in $1,000 for my logos per week, If I charged people $1,000 per week for 50 logos, will I be profitable in say five months on the road, 10 months on, I may not be profitable today.

I may not be profitable tomorrow because I have to hire. Right. That’s fine. But with your projection sheet, it can tell you 10 months on the road, or even just quick three months down the road, you may start to be profiting. If you are bringing in enough customers. Right. So use that, uh, financial projection sheet to help you.

Uh, and, um, with that projection, the next thing is to create a self-serve website where people can see what is your offer, your FAQ’s. And they can also make the payments right there, because now you’re ready with your offer. You’re ready with your pricing. And you’re already that if, if a hundred people are to order in the next few months, You know, your operations have been designed to support that.

Okay. So, um, within this, so you can just create this website and it’s self-serve meaning people can, without you, they can go in click and make payments and they get started right there. So you got to design. What happens after payment is made, which is your onboarding. And you can also make automated emails to be sent to them.

And you can tell them through these emails, what you need from them without even you being involved in, right. Because you have really done that upfront. So you do the work upfront and a hundred people can come in. You don’t have to do a hundred times, um, previously in where I was, what I was doing, my design freelancing work I had to.

For every customer, they want different things. So when they want different things, I have to talk to different customers a hundred times. Right. Let’s see if a hundred customers meet them a hundred times and it tells me a hundred different things and I have to create a hundred different invoices, a hundred different proposals, and, um, got, get rejected like a hundred over a thousand times.

Right. So, so, so that is over when you productize your services. Um, so, so. When you, when you kind of onboard them, here’s where your operation processes coming. Right. So whatever they have, they designed, uh, in the previous points, right. Where, before I mentioned on operation processes, this is where they will be, they will be seen, right.

Your operations will be seen up to delivering your customer’s wishes. All right. And. Next point, which is a ninth point is nine or 10 10th points. Yeah. You set up your recruitment and hiring process. Look, we can never really do this alone. Um, unless there are robots and super robust AI to help you with that.

You can build the AI process. It’s not impossible. Uh, it’s just, you, you need to understand your. You know your customer’s problems. And if the AI can solve that, I think that works fine. If they need some people to be involved, then you need to hire, and that has to happen. So what happens when you have an incoming customer, all your designers have too many customers in your hands, so you don’t want to burn them out and affect their work quality.

So you need to. Preempt that and know where to look for new designers to help incoming customers. So decide on what kind of designers you’re looking for based on your offer. So let’s say your offer is to, um, kind of design logos or infographics. Then you need to look for designers who can do them, right?

So once you have decided on, on, uh, okay. People who can help you with the logo designs. How do you recruit them? Do you go to Facebook groups to find them, do you go to recruitment agencies? So you have to decide where can you find the best designers to support you in your kind of work that you want to deliver?

So for us, we have a few stages to test them. We can actually recruit from mostly anywhere we can recruit from Facebook groups. We can recruit from anyone who comes to us. And ask us if they are, is it fine for them to join us? What we will do is we’ll send them first a test, right? So this, these are, these are tests where, um, they have to complete them in like two hours.

So I purposely designed the test to make it slightly more challenging than usual. Um, it’s not meant for them to completely finish. But it’s more to see the aptitude of working through the test. It’s not so much of, um, con coming up with great ideas or creativity, but it’s a lot on the balance between the time that they can, um, complete as well as how, how they follow the brief.

Plus a bit of that quality because I don’t expect them to do something super good in such a short time. It’s not that we are not testing on that, but it does have to have that bit off, uh, effort. Right. So this is what I’m testing. And there are some people who, some designers who didn’t get that and. They did not follow the brief and they did not want to complete.

And they would just email me and say that this the time is too short for, for work. And they refused to do that. That’s fine. It’s you know that then they are not a fit or we are not a good fit for one another. They may be good designers, but it’s just not the ones for us. My point is you’ve got to decide who is for you.

Right. And then craft this and design this recruitment process so that you know where to find it and you know what to test them and you know, what, what you want from them. Right. So decide that criteria and go with that. Okay. So you need to know first your audience and then your hiring process. And your, um, criteria so that you will get the right designers for your, for the clients that you’re working with.

The last point number 10, which is, um, yeah, it’s the last one is to create a marketing and sales process. Okay, because you have all these things designed, then you need customers, right. But right from the start you have already validated, you have already researched, you already did some kind of test or checked with demo, even spoken to them to see if that is something that they want and you can preempt or figure it out, or kind of know that hundreds and thousands of customers will come to you every year or every month.

Then this is a time to create your sales process, where you can promote your offer. Where you can kind of sound out in a way to get people to know more about you, to trust you and to eventually what we do. So after doing all the steps from one to nine, with your confidence in your operations, now you’re able to support your customers if they were to increase in numbers along the way, right?

From the start, you may not have hundred, but I mean, it’s a good, it’s a good, um, it’s good news, right? If, if you have hundred from the start. But of course it’s not something that seems, um, you know, like it’s possible right from the start. But, but if there is, you know, if you really get hundred customers right from the start, it’s good and your operations are really designed that way, go for it.

Right. And it can go up to 1000. It can go up to as many as you want, because you can go through all the processes and whatever that you have designed. As, as mentioned in the points above you are ready for more customers. So no problem with that. So this is when you start growing your customer base, you start growing a team and employees and you start scaling your business.

Right? So now go do it. So see you on the next one. Take care. Got to go. Bye.