When the math of scale doesn't pencil out (Models + Marketing Part 2)
In Part 1 of this series, I explained the lack of understanding, context, and flatout lies that create a rampant problem of people buying into marketing strategies unsuitable for their stage of business or business model.
Now it’s time to dive more deeply into the models and the math that drives them so you can understand how this applies to your own business and make informed choices about where to invest and what to do next.
Business Model Math
If you’re a consultant, coach, creative professional, strategist, or agency owner, your work is customized, high-touch, and expertise-driven. You handle a finite number of client engagements per year because each one requires significant time and attention.
Your clients pay premium prices because they're getting your brain, your experience, your judgment, and often direct access to you.
You’re running a low-volume, high-ticket business model and your revenue will look something like this:
8-12 clients per year at $15K-$25K per engagement = $120K-$300K in revenue
3-5 retainer clients at $5K/month = $180K-$300K in revenue
10-20 projects averaging $5k each = $50k-$100k in revenue
Your revenue is naturally capped by your capacity. There are only so many hours in a day, and only so many clients you can serve well at once. If demand exceeds your availability, you either raise your prices, hire help, or turn people away.
Your leverage isn't in volume. It's in specificity, reputation, and relationships.
The low-volume, high-ticket business runs on relationship math:
How many connections you start
What percentage lead to conversations
What percentage of conversations become clients
The lifetime value of each client (LTV)
If you need to generate $200K in revenue and your average client engagement is $20K, you need 10 clients. If you close one in three conversations, you need 30 quality conversations. If one in five connections leads to a conversation, you need 150 meaningful touchpoints.
While 150 touchpoints in this example may seem like a lot, that’s accounting for multiple touchpoints per person. You don’t need a funnel, but you absolutely need a simple system for connecting and staying in touch with the right people.
If you’re a content creator or educator your work is one-to-many (1:many). You create something once—a course, a book, a membership, a digital product—and sell it to as many people as possible.
Your customers pay accessible prices because they're getting information, tools, or community, but not necessarily direct access to you.
This is the high-volume, low-ticket model where revenue could look something like this:
500 people buy a $997 course = $498,500 in revenue
300 members pay $47/month = $169,200 in revenue
50 people buy a $1997 program = $99,850 in revenue
You need lots of customers to make this type of business work. You need traffic, reach, and systems that can handle hundreds or thousands of people moving through your funnel without you being directly involved.
This model requires capital to build the infrastructure, drive the traffic, and test until you find what converts.
A high-volume, low-ticket business runs on traffic math:
How many people see your offer
What percentage click
What percentage buy
What each sale is worth
Return on ad spend (ROAS)
If you need to generate $200K in revenue and your product is $497, you need roughly 400 sales. If your funnel converts at 2%, you need 20,000 people to see your offer.
You must also account for a level of churn. Churn is the number of people who cancel or don’t renew. Those first 50, 100, 500 buyers are not going to be the same buyers year over year which is why you need systems and a continuation of capital to fund reach and traffic.
That's why course creators and membership site owners invest heavily in ads, SEO, content marketing, and audience-building. They need eyeballs and lots of them. They need NEW eyeballs constantly to account for their product life cycle, sales cycle, and churn.
If you don't have an existing audience or the budget to buy traffic, this model is extremely difficult to launch and sustain.
Can you see how the service business and the creator/educator business are running two very different models?
It’s imperative to understand this distinction because everything you do in your business should align with the way you’re actually generating revenue.
The Seduction of Scale
As a service provider, you’ll hit a point where you can’t go further. Either you're booked solid and can't take on more clients without burning out, and you don’t want to hire help. Or you’re tired of constantly working with humans, being tied up in meetings, and creatively constrained by other people’s needs and deadlines.
Adding a scalable revenue stream through a course, a digital product, group program, or membership sounds like the answer.
What if I could create a course and sell it while I sleep (or play or travel)?
What if I could build a membership and have recurring revenue?
What if I could finally stop trading time for money?
If you’re already tired of all that’s required to run a service business, the dream of escaping the grind is extra bright and shiny.
They tell you you can have this!
Freedom! Ease! 6, 7, 8 figures!
And in fact, it’s absolutely possible. For some service businesses, it works.
What they don’t tell you is that the service business owners who successfully add a scalable component almost always do it by pulling capital from their service-based revenue.
They invest $20K, $50K, sometimes $100K+ to create the product, build the funnel, drive the traffic, and test until it works.
Even then, many of them don’t abandon their service side.
Instead they run a hybrid of the two models which you can imagine is a challenging path requiring patience, balance, and assistance.
The Miscalculation
What doesn't work is trying to add a scalable component when your service-based revenue isn't stable yet. When you're still figuring out your positioning. When you don't have a consistent process for generating clients.
Some examples…
Jenna has been running her brand strategy business for 6 years. She works with 8-10 clients per year at $15K-$25K per engagement. She's profitable. She's good at what she does.
She’s so good she was getting plenty of referrals, even if not all of them were ideal, and consequently so busy she never seemed to have time to figure out how to get more clients who were a better fit. And anyway she was tired of the constant demand on her brain and time.
The idea of creating a course that could leverage her time and make her money with less effort was very appealing. She bought a program that promised to help her build and launch a course in 90 days. She spent $3K.
For 6 weeks, she tried to carve out time to build the course. It was a lot more work than she expected. She didn't have the bandwidth and there was no way she was going to let things slip with her client work, so she started putting in nights and weekends to keep up with it all.
She didn't have her messaging dialed in for the course, so she kept rewriting the sales page.
She also didn't have an audience interested in a low-ticket offer. Her current audience wanted high-touch strategy from her, not a $297 course.
After 90 days, she had a half-built course, no sales, and a deep sense of shame that she “couldn't even finish what she started” and had “made a bad business decision.”
Jenna could have created more space and income in her business by raising her prices, tightening her positioning and messaging, and building a referral system to bring her more of her ideal clients.
The program she bought was fine. But it was wrong for her model.
…
Marcus, an executive leadership coach, bought a "Launch Your Podcast in 30 Days" program because he kept hearing that a podcast would position him as a thought leader and bring in clients.
He spent weeks planning episodes, buying equipment, learning editing software. He launched the podcast. He published 10 episodes.
And then... crickets and no new clients. Barely any downloads.
What Marcus didn’t realize is that a podcast is a Layer 2 or Layer 3 marketing strategy depending on how you use it. It builds authority and visibility over time. It doesn't generate immediate revenue unless you already have an audience or you're investing in promotion.
What Marcus needed was to be in direct contact with his network, have conversations, ask for referrals, and follow up with people who'd expressed interest in working with him.
…
Sonya bought into a membership program for her copywriting business. The pitch was that she could create recurring revenue and serve more people without trading time for money.
She spent 3 months building the membership. She launched it and got 8 people to join at $47/month.
It was a respectable amount of people for her email list of 700. It’s also $376/month—before platform fees.
She was spending 10+ hours a week creating content for the membership, hosting calls, and managing the community. When she calculated it out, she was making less than $20/hour.
Meanwhile, her consulting clients—who paid on average $5K per project—were getting deprioritized because she was so focused on the membership.
To make a membership work, Sonya would have needed hundreds of members, a marketing system to continually bring in new people, and a content production system that didn't consume all her time.
She didn't have any of that, and didn’t realize it until after she’d sunk a bunch of time and money.
The Cost of Confusion
Every one of these examples represents the Cost of Confusion.
It's not just the money spent on the product or program. It’s also the time lost, the opportunities missed, and the confidence eroded which can be quite devastating, leading to extreme doubt and shame.
Jenna lost 6 weeks she could have spent raising her prices and reaching out to past clients for referrals.
Marcus spent months building a podcast when a handful of phone calls would have filled his pipeline.
Sonya deprioritized high-paying client work to build something that generated less than $400/month.
Their efforts failed not because they didn't put in the hard work or couldn't hack it, but because they were operating on the wrong assumptions.
They assumed that because a strategy worked for someone else, it would work for them.
They assumed that the goal for business growth was "scale," and they were behind if they hadn't made it happen yet.
They assumed the program seller understood their business and wouldn't sell them something that didn't fit.
Where to Go From Here
When your service side isn’t stable, then you take time and attention away from the thing that's making you money to build something that may or may not ever make money, it’s going to be difficult to get yourself profitable. And you probably won’t have the capital to invest in making the scalable component work.
When your focus is diverted to a Layer 3 marketing strategy, and you are putting little to no time in your Layer 1, your pipeline dries up.
Now your service side is suffering, the scalable component is stalled or gets sidelined and you feel like total crap for all the time and money you wasted.
If what I’ve described is hitting close to the bone for you, please know this: it’s not your fault. It’s not your fault when you didn’t know better or you weren’t given the full story. You made the best decision you could with the information you had at the time.
And now you know better.
The reality is most program sellers are teaching from their own experience. If they're operating a high-volume model, they're teaching strategies that work for high-volume models and vice-versa.
They're rarely accounting for the invisible advantages they had—the existing audience, the capital, the team, and perhaps even their own systemic privilege that gave them ready access to resources others don't. At least they're not talking about any of these things on their sales pages and emails.
When buyers don't have the framework to evaluate whether a strategy is right for their model, they trust the seller's confidence and assume it will work.
That's where the mismatch and miscalculations happen.
As a service provider, you don't need traffic. You need the right conversations.
You don't need a funnel. You need a consistent process for outreach and follow-up.
You don't need to scale. You certainly can if you want, but you stabilize first, then selectively expand.
If you don't have a steady flow of clients coming from Layer 1 activities, adding Layer 3 won't fix that. It will just distract you from doing the work that actually generates revenue in your model.