FREE PREVIEW · MODULE 1 · LESSON 1 · 14 MIN
The four solo business models
Services, productised services, digital products and small software, with the economics of each.
One-person businesses fall into four models, and most trouble comes from picking one whose economics do not match your situation. Custom services sell your time on bespoke work; they usually produce cash fastest, often within weeks, but are capped by the hours you can bill. Productised services sell a fixed scope at a fixed price, such as a website in two weeks for 4,000 dollars; margins improve because you repeat the same process. Digital products, like courses and templates, have near-zero marginal cost but need an audience. Small software needs the most upfront work and pays back slowest.
Think in terms of time to first dollar and ceiling; the timings here are rough planning assumptions, not data. Custom services: first dollar in a few weeks, with a ceiling set by your billable hours times your rate. Productised services: first dollar in one to two months, with a higher ceiling because a repeatable process lets you deliver more in the same hours. Digital products: often several months to the first sale unless you already have an audience; the ceiling is high but typical revenue is modest. Software: often three to twelve months, with similarly wide outcomes.
A lower-risk path for many people starting from a job is to begin with a productised service in a domain you already know, reach a steady income such as 5,000 to 10,000 dollars a month, and then use the customer knowledge and cash to build a product if you want one. Starting with a product first is possible but adds risk, because you are learning both what customers want and how to sell at the same time. Throughout this course the examples assume a productised service, with notes on where products differ.
Example: a payroll specialist compares the four models
Aisha Rahman, a payroll specialist in Leeds, wrote one sentence for each model. Custom services: payroll troubleshooting at £75 an hour, with a first payment likely within three weeks through former colleagues. Productised service: a “Payroll health check in 10 days for £1,800,” first sale in four to eight weeks. Digital product: a pack of payroll templates, but with no audience, four to six months to a first sale. Software: a payroll error checker, six to twelve months before any revenue. She chose the health check because she knew the domain and the buyers. She sold the first one in week six, and by month five was earning about £6,500 a month from three health checks and one custom project. The 40 most common errors she logged became the outline for a later template pack.
Illustrative example: the business, people and figures are fictional.Key takeaways
- Four models differ mainly in time to first dollar and revenue ceiling
- Productised services are often the lowest-risk start from employment
- Build products later with customer knowledge and cash from services
Exercise
Write one sentence describing your business under each of the four models. Note the realistic time to first dollar for each given your current audience and savings, and circle the one you will pursue first.
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