Hustle with Heels Podcast

Ep 20. Service-Based Business or Digital Product - How to Pick the Right Business Model for Your Side Hustle?

• Cindy Excell

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You’re sitting on a goldmine of knowledge, experience, and skills… but how do you turn it into a profitable business?

Do you start coaching, consulting, or freelancing?

Or should you go all-in on a digital product—an online course, an ebook, or a membership site?

If you’ve ever been stuck at this crossroads, trust me—you’re not alone.

I used to believe that creating a digital product was the ultimate way to build passive income and escape trading time for money. But reality hit me fast…

  • I wasn’t an influencer with a huge audience.
  • Selling digital products required more time and marketing than I expected.
  • I needed to make money now, not months (or years) down the road.

So, I pivoted.

Instead of chasing passive income, I focused on the fastest, simplest way to start making money: offering a service-based business - online coaching.

And in today’s episode, I’m breaking down the pros and cons of both service-based businesses and digital product businesses, so you can decide which one aligns with your goals, lifestyle, and financial needs right now.

- The #1 reason why most people struggle to make money when they start a side hustle.
 - The real math behind making $10K with a coaching offer vs. a digital product.
 - The biggest misconception about passive income that no one talks about.
 - The 4 key factors to consider before choosing your business model.
 - How I went from zero audience to landing 1:1 clients quickly - without fancy marketing.

If you’ve been debating whether to sell your expertise as a service or a digital product, this episode is going to give you clarity and a clear path forward.

Hit play now, and let’s break it all down.

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Welcome to the Hustle with Heels podcast. I'm your host Cindy Excell, a corporate girl, side hustler, wife and mum of two. In 2020, I started my first side hustle as an online fitness coach while working in my corporate job as a private wealth manager. Over the years, I have been living proof that a corporate career and a side hustle can absolutely coexist in harmony. Today, I'm helping corporate women and early-stage entrepreneurs create wealth beyond their 9 to 5 jobs and build an online business on their terms. 

On this podcast, I'll share my knowledge, strategies, and stories that will help you start and grow your start hustle. Whether you are ready to diversify your income streams or are looking to build a side business that aligns with your goals, I'm here to support you every step of the way. Now, let's get started.

Hey friend, welcome back to another episode of Hustle with Heels podcast. In today's episode, I want to address this question that I often have people ask me. Now they often say, Cindy, you always talk about turning your expertise, your skills, your knowledge, experience, et cetera, into a business. But how do I know whether I should start a coaching business, consulting business or freelancing or maybe should I go all in on a digital product, online course, ebook, membership site, etc. There are so many options out there. If you have ever been stuck at these crossroads, trust me, you're not alone. I was right there as well, debating what path would actually help me make money in my side hustle without burning myself out. When I first stepped into the online business world, probably in 2019,

I had this big and dreamy vision in my head. I wanted to create something once and get paid for it over and over again without having to show up live, without having to trade my time for money. This idea actually came from learning about the story of this personal trainer and entrepreneur who inspired me at that time. If you are into fitness, you would have heard of her. Kayla Itsines. I wanted to do what she does back then, have a fitness app and then have millions of followers and make money in my sleep. I mean, isn't that what all the marketing gurus were selling? Make money while you sleep or create passive income in your pajamas, et cetera. However, as I started learning about online business, I realised it was far from what I imagined. 

To have an app and get a passive income via an app, you basically sell a low-ticket offer that requires a large audience if you want to hit your income goals. I was no fitness influencer. I had no interest in becoming one. Most importantly, I didn't even have any social media presence back then. And certainly, I didn't have millions, not even thousands of followers at all. So clearly, this plan was not going to work for me unless I wanted to dedicate my time and energy to building a large and engaging and loyal audience first, and that would take years for me. I realised that I needed a different business model. To have a business, I need to understand what problem it is that I solve, who is my ideal client, and what transformation or what kind of result I can help them achieve. That means I need to actually talk to my ideal clients first. understand what they need, their struggles, their desires, and their dreams, etc. That's when I shifted gears. I started working in the gym, talking to them directly. I learned exactly what they are struggling with. And later on, when I did start an online fitness coaching business, I was able to get one-on-one clients pretty quickly because it was built on real insights, not just assumptions.

So if you're wondering, should I sell my expertise as a service or should I package that into a digital product? The truth is there is no one-size-fits-all all answer. There is a smarter way to approach this. And today, I'm going to break that all down, and we'll dive into the pros and cons of service-based side hustles versus digital product businesses. And by the end of this episode, you will know exactly which model aligns with your goals, your lifestyle, and your long-term vision for your side hustle business. 

Now let's start with the fastest way to make money, which is offering a service. Whether it's coaching, consulting, or freelancing, this is the easiest way to validate your idea and start generating income. You only need a handful of clients to prove that your expertise has value.

So here are the pros of a service-based business. Number one, it gives you a quick start and it has a very low cost to start, which means it has a low barrier to entry. One of the biggest advantages of having a service-based business is that it has a very, very low startup cost and you can pretty much start immediately. You don't need a website, you don't need any fancy branding or logo or even a social media following.

You just need to know how to solve a specific problem and find that one person who needs your solution that help him or her solve the problem. So you need a system to book the coaching call, take the payment and a platform to host those coaching sessions. And that's it. It is just as simple as that. For example, if you are a career coach, you can help someone give them tailored step by step to land a new job or their dream job without needing a 5 or 10-module course. If you are a fitness and nutrition coach, you can help a client with customised workouts and a nutrition plan, and you can deliver that via taking videos of yourself demonstrating exercise and delivering that via Google Sheet with links to the exercise video. So that is the fastest way to make money when you start solving problems one-on-one.

The second benefit of a service-based business is that you can have high ticket pricing, meaning you only need fewer clients to make money. You don't need a hundred clients to hit your income goals. You just need a handful of the right clients. So imagine this, if you price your coaching package for $2,000 for three months, which is a one-on-one coaching program, you only need five clients a month to make $10,000. So when you compare that to selling a $50 ebook where you will need 200 sales for the same revenue. There is nothing right or wrong with either of these business models. But when you just start out with very minimal to maybe even zero audience who know you and trust you, the high ticket offer can make a lot more sense, and it is often the best way to get started. Higher price means fewer sales in order to make an impact, especially at the beginning stage when you have a very few or audience, which will be the case for most of us at the start. 

And the third benefit is that the service-based business gives you the opportunity for the real-time market research so that you can get direct client feedback and build strong relationships. When you work with clients one-on-one, you get immediate feedback via those back-and-forth conversations with them. You'll hear their pain points that struggles the objections and desires in real conversations, which helps you with your messaging, your unique positioning, and to refine your order as well. Many entrepreneurs who start with services eventually turn that process into a course or membership, but they wouldn't know what to create if they didn't understand their ideal clients first by working with them directly. Now, you probably have heard of this before. People buy from people they know, like a trust. When you work closely with someone in a service-based role, you build deep trust, and the trust leads to referrals, repeat business, and a long-term relationship. This isn't just about making money. It is actually about credibility, about establishing your authority in your field, which can carry your business for years to come. 

Now moving on to the cons of a service-based business. 

Number one, as you can imagine, it can be time consuming because when you provide a service-based business, and especially if you are a solopreneur, you are literally trading time for money. Let's be real, services can be quite demanding. If your calendar is packed with coaching calls, there is only so much time in a day. This means unless you raise your prices or move to a group coaching model, there is a cap on how many clients you can take at a time and on how much you can earn. This can be difficult for a side hustle when you already have a schedule full with your 9-5 jobs or your family commitments as well. Therefore, how you plan out your coaching sessions and take on clients should be very strategic in this model. And this actually leads to the next cons of service-based business, which is the burnout potential, especially if you overload your schedule. If you balance your 9-5 job, you're running a service-based business can feel like working two jobs. You need to set boundaries, whether it's limiting client costs to certain days or to enforce a strict cancellation policy or building in downtime and setting time aside for yourself. Otherwise, you risk burnout fast. The third disadvantage of having a service-based business is that scaling can be harder without a team or systems. With services, your income is often tied to your personal availability. If you go on vacation, your business pauses. If you're sick, your income stops. That's why many service-based entrepreneurs eventually look for ways to scale, like creating group coaching programs, hiring a team, or launching a digital product. 

Now, after understanding the pros and the cons of the service-based business, you might think, okay, digital products can be a dream, right? Passive income, who doesn't want that, automation, freedom. And yes, they can absolutely create that, but they also require a very different approach as well. Now, the pros of a digital product business, number one is scalability. You can sell the same products over and over again. With a digital product, you basically create it once and you can sell that multiple times. There is no limit on how many people can buy your courses, your templates, your membership, etc. This is what makes it so appealing. Your income is no longer tied to your time. So imagine every morning when you wake up to new sales notifications. That's like a dream, right?

That leads to the second benefit. It gives you freedom and flexibility. Your business can run without you. Because digital products don't require those live interactions. They can run on autopilot. You are no longer logged into a schedule. This means you can work on your side hustle during nights and weekends while you keep your 9-5 job without overwhelming yourself. 

And the third benefit is that you can also leverage your content and automations for sales. Your digital products allow you to set up automated funnels. Instead of manually finding clients, your marketing does that for you. You can do blog posts, YouTube videos,  LinkedIn posts, email sequences and even ads can sell your product while you focus on other things. This also means once you're putting the initial effort to create and market your product, it has the potential to generate passive income indefinitely. 

Now, in terms of the cons of a digital product business, number one is that it will require high upfront effort and may not immediately pay off. So here's the truth that no one actually talks about it. Creating a digital product can take a lot of work. And in the beginning, it might take you a lot longer to make any money. Unlike coaching or consulting, where you can get paid immediately, digital products require upfront effort before you even see results. So you basically have to spend time to create the product, which can take weeks or months. And you also need to build an engaged audience, who know, and trust you. And you also need to market that consistently and set up systems for sales funnels, automation and the customer support, et cetera. That's why many people burn out before they even make a sale. The second con is that it requires a larger audience or even paid traffic to succeed. So selling a $97 course might sound great, but if you only have 100 followers, the math just doesn't work.

To sell a digital product successfully, you need either a large audience or a strong advertising strategy. Otherwise, you will be stuck with an amazing product that no one actually knows about it. That is why many successful course creators and the membership site owners, they actually spend years building that brand first and building the audience first.

And the third cons is that it can feel like a direct client interaction. If you love working with people, if you love working with clients one-on-one and seeing the direct impact of your work, digital product business model might feel a little bit isolating. Since your customers are actually buying an automated product, you won't always have immediate feedback or testimonials. And some people can thrive in this model while others miss the human interaction or human connection of coaching or consulting.

So now we've broken down the pros and the cons of both service-based and digital product business. How do you actually choose what's the right one for you? There is no one size fits all answer when deciding between a service-based or a digital product-based business. The best way to make this decision is to look at your current situation, your long-term goals, and your strengths. It all depends on your financial goals, your time availability, your strength and preference, and your audience. 

So to help you decide, I'm going to take you through these four key factors for you to consider. I hope each one will give you some clear direction on which path makes the most sense for you right now. 

Number one is that you need to consider how fast you need to make money. If you need cash first, for example, you should start with a service-based business. You only need one or a couple paying clients to make money. You can sign a client in a couple of weeks and start earning immediately. And a high ticket service such as coaching, consulting, or even freelancing maybe allows you to charge over a thousand per client. And there is no need for a large audience in this case. Just a handful of clients can hit your income goal. To give you an example, imagine if you want to make $5,000 a month, If you charge $1,000 per coaching package, you only need five clients per month. On the other hand, if you sell a $50 ebook, you would have need 100 sales every month. This is why service-based business are usually the best business model to start with if you want to make money quickly. Now, if you have time and if you already have a financial runway, you can start with a digital product. If you don't need immediate income, you can spend time creating a course, template and membership. When you do that, do expect months of upfront effort, as creating content, marketing, building an audience. And sales may also start slow because many people launch a product that don't see traction for as long as six months or even longer. The best option is that many entrepreneurs start with service and then they transition to digital product once they have experience and credibility.

Then the second thing to consider is how much time you actually have for your side hustle. If your time is limited, and most of us are, the service-based business is easier to manage at the beginning. So things might change down the track, but at the beginning, a service-based business is definitely a lot easier to start and to manage. You can set your own hours. For example, you can set aside two hours for coaching calls every week, and it is flexible. You decide how many clients you want to take on at a time. You don't need to spend months creating a perfect product. You can start right now. As an example, if you can only work on your side hustle for five or 10 hours a week, you can take on one or two high-tech clients per month, or you can offer a 90-minute consulting session or coaching session for a premium price. This allows you to balance your nine-to-five job and the family life while making some extra income.

On the other hand, if you have more income, digital products are a great long-term play because you can spend the time to build an audience before making those consistent sales and you'll be investing your time in creating courses, marketing and automation. If you can dedicate, for example, over 10 or even 20 hours per week, you have those capacity to build and market a digital product with all those time you have. 

Now, third thing to consider is that What are your strengths and the preference,s and whether you are actually enjoying working with clients one-on-one. If you love teaching and guiding people at one-on-one capacity, if you love coaching, consulting and direct client work, start with service-based business. But if you love writing automation, if you prefer creating systems and templates, video courses, et cetera, then digital products might be the way to go. And the last thing to consider when it comes to which business model to go with is that have you had an audience already? If you don't have any audience at all, definitely start with a service-based business. You don't really need thousands of followers to lend one coaching client. You can go out to your network, you can ask for referrals, you can tell people you know that you are starting this new business and ask them if they know anybody you can help. So basically you still have a good chance to sign up clients without an audience with this business model.

But if you already have an engaged audience, you can consider to start a digital product because you already have that trust and credibility built and your audience already see you as an authority before they buy a product from you. It will still take some marketing effort, but you already have those warm leads in your network, that they're willing to buy from you. So at the end of the day, there really, is no right or wrong choices. It is about what fits your lifestyle, your skills, your preference, and your financial needs right now. I started with coaching first because I had a very small audience when I initially started, and I didn't have all the time to build my audience first. And I needed to build a financial runway since I pivoted my coaching business to Side Hustle Business Coaching mid last year.

And starting with one-on-one coaching allows me to test my messaging and understand my ideal clients in their space. It gives me the cash flow experience and the confidence in my process while building a business in a brand new niche. My next step is to turn my one-on-one process into a scalable program, such as a group coaching program. Along the way, I might test out a digital product on a smaller scale, such as a mini course, et cetera. The point is,

When you first start out, pick a business that works for you and consider those steps I have taken you through and choose the one that most resonates with you. 

Don't overthink this; just start. Test an offer, work with real people and refine as you go. Because business isn't built in theory, it isn't built in overthinking; it is built by taking action. The biggest mistake that I have seen is people trying to do everything at once. So focus on mastering one thing before adding more. Remember the easiest way to get started and making money fast is to offer a service first if you haven't had an audience. So that's it for today's episode. I hope this helped you. And if you haven't already, make sure to subscribe for more episodes on building your profitable side hustle. Thank you so much for hanging out with me today and I'll see you next week. 

Thank you so much for listening to the Hustle with Hales podcast. I hope this episode has inspired you to take action towards your self-hustle dream. If you enjoyed this episode, please take a second to rate and review it. Each review helps me help more corporate women and early-stage entrepreneurs just like you. Don't forget to take a screenshot and share it in your Instagram stories and on LinkedIn, and tag me at cindyexcell. I will see you next week.