Creative business owners and professionals alike often want to know how to transition from selling services to selling products.
So instead of selling your labor as a photographer, medical doctor, lawyer or financial analyst you can develop a product once and sell it a number of times. Doing this can provide the foundation for a scalable business with the potential to grow.
Why Go From Services to Products?
We have worked with a number of clients who have made the choice to go from services to products. Often, this could be a design firm that comes up with a mobile app or a physical product that they have chosen to sell via an online platform. And sometimes these products generate more revenue than the initial service business.
The main benefit is that the business can scale and is able to create lasting value beyond the income from a single client. By developing products, your business begins to capitalize on the valuable intellectual property that you create.
How To Go From Services to Products
If you are going to adapt your business from a service-oriented business to a product-oriented business, there are a few things to consider on the legal side:
Learn to Protect Your Intellectual Property: Almost every product will incorporate some form of intellectual property. Whether that is copyrights for the creative components, trademarks for the branding components, maybe a patent and certainly trade secrets for methods of doing business and for supplier/customer lists. Identifying the intellectual property that is incorporated into your product is crucial to ensuring that you have your ducks in a row. Then, come up with a plan to register or otherwise protect your intellectual property.
Build A Strong Brand: The truth is that copycats happen. Sometimes it happens because certain products cannot be protected by copyright (for a number of reasons). One way to stop this is to build a strong brand. At its core, a brand serves to differentiate your product from those of competitors. This is why product-focused companies do their best to build and protect their brand – the brand embodies that company’s qualities and can often become the single most valuable asset in a business. Think about your brand early and often.
Reduce Product Liability: And sometimes things will go wrong, despite all of our best efforts. The key here is to limit your exposure to liability by understanding product liability laws (in the case of physical products) or terms of service/privacy policies (for digital products). By exercising care in these areas, you can protect your business if something goes awry.
Consider Forming A New Company: Sometimes a product grows so successful that it forms a spin-off from the original product business that spawned it. In that case, it might make sense to separate your product business into a new company custom-built for it. This way, it becomes easier to raise investment and bring new people on board who will contribute to the product, but who will have nothing to do with the original service business.
Taking The Next Steps
Admittedly, there is a great deal to think about if you want to go from services to products in your own business. But it can be done (and we work with a ton of great businesses that have done just that). We can help you understand the legal considerations and help you structure your business for success – consider checking out our affordableLaw Legal Program for ongoing support on this and other legal issues.
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