How To Turn Knowledge Into a Profitable Business
Your existing knowledge could be the key to a new profit-making business.
You might not realize it, but your knowledge might be worth good money to someone.
But how exactly do you turn that knowledge into a profitable business?
The answer lies in two business models: productized services and info products. Don’t worry if you have no idea what these are; I’ll explain everything and help you decide which one is right for you.
The best part is that you don’t need any experience running a business.
What Knowledge Can be Turned into a Business?
The simple answer is almost any.
The internet is the first place people turn when they want to learn something, whether how to play the guitar or how to run Google ads for their business. Such information can be accessed from anywhere, allowing people all around the world to tune in and learn at their own pace.
People are willing to pay good money for this privilege and in more niches than you might think.
Perhaps you’ve done a lot of freelance work for others, or perhaps you’ve worked offline in an area such as accounting. These are both great ways to build up knowledge in a specific industry that other people want to learn about and are willing to pay someone to teach them.
Introducing Productized Services and Info Products
In a productized service business, you perform a task for a client, whereas an info product means teaching someone how to do it themselves.
What started as relatively niche online business models have grown to be money-making powerhouses. There are pros and cons to each, and the one you should choose will depend largely on your knowledge and skill set.
What is a Productized Service Business?
A productized service takes a typical service, such as web design or copywriting, and offers it as a package deal. For example, if you had a copywriting business, you could offer articles in batches of five, each with its own price point.
Customers can take an off-the-shelf deal knowing exactly how much it will cost and what they’ll receive. They don’t have to worry about micromanaging the ins and outs; they can pay and collect the finished product.
This is one of many good features of the productized service, not just for consumers but for business owners.
The Pros
This model is a great way for freelancers to turn their skills into a business. If you market your business well, then you won’t have to find new clients constantly — they will find you.
In this model, you also know exactly what needs to be done, and you don’t have to negotiate pricing for every job. Rates and packages give everyone a clearer understanding of the expectations.
Another benefit of this model is that it’s highly scalable. When freelancing, the amount you earn is limited to how much you can work, and one person can only work so much. With a productized service, you can take yourself out of the equation and create a team of freelancers under your brand. Your individual name doesn’t matter as much; you build credibility by creating processes for your brand and having a team that carries them out for you.
Because a productized service does not use personal branding, it is easy to sell this type of business. A new buyer can seamlessly take over the business with the customer base being none the wiser. This means that a productized service business will appeal to a fairly large pool of buyers, which results in a higher valuation multiple.
The Cons
While one client might like the ease of off-the-shelf packages, another might prefer a personal touch. A productized service model means a more distanced relationship with clients. It offers less opportunity to network and gain highly lucrative deals that allow you to charge a premium fee for your services.
When you look at the model like that, it appears to produce less profit by packaging all your services into one offering. But the model’s scalability should outweigh these concerns. You’re going for a greater quantity of orders, so this is something that you will have to weigh up.
Building such a business can also be time-intensive, particularly through the first few stages of growth. At the start, you’ll need to deal with customer requests and manage freelancers. Only when the business picks up a good amount of traction will you be able to offload this work to a fully functioning team.
What is an Info Product Business?
An info product is a detailed explanation of how to do something. This product used to be offered in the form of PDFs that users could purchase for download. However, they now usually take the form of high-end videos and courses that people can access at the click of a button.
The element of video revolutionized how people can learn and opened up a global audience. This alone will be a great enough benefit for some, but this business model is enticing in other ways too.
The Pros
Passive income is often discussed when it comes to online businesses, and info businesses are one of the best business models for earning it. It might take time to create a course, but once it is done, so is all the heavy lifting.
Some courses will require more updates than others, depending on how quickly information changes in your niche, but for the most part, you can market your course and sit back as the revenue comes in. There is usually a low initial cost to produce the course and an even lower maintenance cost, which makes the profit margins very high.
You also don’t have much to learn, as you are monetizing your existing knowledge. Once the course is set up, you can run the business with just one or two hours of work a week.
The Cons
Info products tend to suffer from higher return rates than physical products. It’s common for info products to offer a money-back guarantee to build trust with potential customers. Taking away the refund guarantee may seem like an easy solution to this problem, but it will only deter potential customers, so the potential for high return rates is something you should be aware of.
You’ll need to set up good customer service solutions to deal with client inquiries, which might be outside your wheelhouse. It’s fairly simple to set up and use a customer service platform like Zendesk to help keep you organized.
Before you create your course, it’s important to determine its value. While there is a thirst for knowledge in almost every niche imaginable, you will be competing with a lot of free content.
If your expertise is how to make money online, people will be willing to pay thousands because the potential return is high. People are also willing to spend hundreds of dollars on weight loss and fitness courses. On the flip side, people won’t spend thousands on a ‘How to solve a Rubik’s cube’ course when they can find that information in a free five-minute YouTube video.
A successful info business can be more difficult to sell than other online businesses. This is because the videos contain a personality, usually that of the business owner. If this is the case, try to find a way you can outsource content creation. That way, when the course needs to be updated, they can step in and record the content for the new owner.
Realizing that your knowledge could create a highly profitable business opens up many opportunities. Remote work, becoming your own boss, and fewer work hours per week all become possibilities. It’s time to take your knowledge and put it to better use.
If you already have a knowledge-based business and are curious to see how much it could be worth, check out our valuation tool. It takes only a few minutes to fill out and will help you to decide if you’re ready to sell.
