This is an article for all the service-based business out there…
The reason I push my team to document everything and turn it into a process, is because the faster and more efficiently we can do something, the more we can scale our business. And the more we can scale our business, the bigger we will get and the more valuable we will be. The benefit of a product is you are selling a thing and not your time. However a big part of a service-based business requires human involvement. So how do you turn a service into a product? 
Smaller companies are so busy hustling to make a buck; they usually only do an ok job at productizing their service. Does this sound like you? This is something you need to change if you want to see massive growth. I admit I am guilty of not always following thru and having the disciple to ensure everything my company does becomes a template, but I recognize that and try to strive for it.
Service-based businesses typically don’t have a large multiple when it comes time to sell. Meaning they won’t sell the company for much more than what it is grossing each year. It’s like being a dentist; you only make money when you are in the office (franchisee owners aside). Being a SaaS company mobileStorm has the opportunity to sell software and messaging which is great, because it has a very high profit margin and can be recreated over and over again for little cost. However the service part of our business can slow our growth if we don’t execute right. Service means head count, and people are always the highest cost to any organization, hence one of the reasons service based companies don’t have the best valuations. However the smart service companies recognize this and put a plan in place so they can scale. Look at salesforce.com, they now have a market cap of 8.24 billion, I remember when their stock was at $15, its now $65! These guys figured the perfect way to offer software and service.
Picture a restaurant, the only thing that makes a restaurant work are human beings (Japanese vending machines aside). One of the reasons McDonalds was so successful, is they hired and trained someone to do one thing over and over again. One person puts the fries in the oil, one person squirts the ketchup on the bun, one person puts the burger in a wrapper, and so on and so forth. Because it is such mindless work (sorry teenagers), they could ramp an employee up really fast, offer low wages and get the food out to the customer quickly, thus, producing billions of burgers at a very low cost. They took a resource intensive business and figured out how to scale the hell out of it. They invented their own service methodology that is studied in MBA programs all around the world (or so I heard, I am no MBA).
You should always ask yourself can the service you are going to launch (or are thinking about creating) truly scale and be profitable. This might mean more work up front, taking a step back, delaying a launch or deciding not to do something altogether.
Below are 10 things a business can do to move towards turning a product into a service (feel free to comment and add more):
- Before rolling out any new service make sure it can be duplicated quickly and that it is well documented. It has to become a template. Everyone has to know what job positions handle the various aspects of the service, what the time frames are like, and what the costs are.
- Implementing training programs to ramp people faster. The hard part here is to make sure you consistently update those programs as your service, platform, and the industry evolves.
- Implement tracking and hold people accountable.
- Reward and recognize those individuals that are consistent and improve the process.
- Always identify tools to help speed up the time it takes to perform a task. A service should not be launched if it does not have at least one tool to speed up the process.
- Your marketing department/person needs to make all your services look and feel like a product.
- Create a repository of all processes that is well organized and can be easily searched. Lots of people are using Wiki’s these days. We use PBwiki but I am not thrilled about it.
- You need leaders who want to control process and be responsible for packaging it.
- Create a process to figure out the best way to create a process, i.e. a template for your template.
- Be disciplined to always follow the process and never deter, unless its to improve the process. As your business matures its less about taking a deal because someone is willing to pay you, and more about taking a deal because you have a process that will allow you to knock it out of the park. This will keep you focused and close to your vision.
Reprogram your minds to always first think about how to productize your service, you will become more valuable in a shorter period of time.
My inspiration for this post was an article written by Anita Campbell, I suggest everyone reads it:
http://www.openforum.com/idea-hub/topics/innovation/article/5-steps-to-turning-a-service-into-a-product-so-you-can-sell-your-business-anita-campbell
