Let’s face it.
Most of us have spent a colossal amount of our time working tedious jobs and accumulating every penny we can spare, just so we can be financially sound and independent. We fiercely motivate ourselves to get out of bed. We think of excuses on our way to work. We check the time, waiting eagerly for the shift to end. We make it to the end of the month only to get a limited paycheck.
Every night you wonder what more can you do and what else can help you. You can’t just quit your work. You need the money. And even though you’re planning on investing, you barely have any money to spare. Disheartened, you still continue your mundane job – because it is still better to have something than nothing right? You continue your endless loop for years. Why?
Two words: Financial independence.
If you’re in a position I mentioned earlier, it is not surprising to know that you probably have thought about starting your own service business every now and then. But you never could bring yourself to go ahead with it because you’re overwhelmed. How do I start my own service business? What service business should I choose? How to start a business for dummies? What resources will I need? Your browser history probably has these searches from time to time. This article presents all your answers.
Before we get into the details, let’s sort out the basics first.
What is a service business?
The general idea of a service business is one where you provide specific services as opposed to products to your customers. Cleaning services, transportation services, hospitality, maintenance or consulting services, and so forth all come under the service business. While some service businesses will require a portion of investment in its early stages, there are other service businesses that require little to no investments at all such as freelance writing, tutoring, designing, consultation, etc.
Here are a few service business ideas you can look into:
- Health care: Counseling, physical therapists, etc.
- Personal care: Home service beauty salons, masseuses, etc.
- Home repair: Maintenance services
- Transportation: Deliveries, couriers, etc.
- Business: Advisors, consultants, accountants, etc.
Why start a service business?
There are numerous reasons why a service business can be your financial rescue.
- Little to no investments.
- You can start it as a side gig and pursue it full-time gradually.
- Unlimited income
- Less risky
- No need for storage space or inventory.
You’re probably wondering – if the service business is the answer to financial freedom, why isn’t everyone doing it?
Here’s why most people back out of the service business:
- In service businesses, the work depends on the customer’s timetable most of the time. This, unfortunately, can cause scheduling issues.
- The inconsistency of work could result in a slow work pace, draining your income in the process.
- Most service business organizations are luxuries rather than essentials. For example, if your business is a massage service; during uncertain times, your customer might cancel their service to shift their expenditure to essentials.
- The competition in the market is also a great challenge and only those who persevere, make it ahead.
- The majority of people give up in the first phase of starting their service business because the process is slow and the revenue does not match their expectations.
It is understandable to feel overwhelmed and fear failure. Your whole idea might appear confusing, and downright doubtful. However, what you don’t realize is that once the initial phase is complete, there is no limitation to how much you can earn and how fast. Service businesses are a great example of “trust the process” and the result lies in you and how you desire to go forward.
How to get started with a service business
Now that we have all the basics covered, here is how you can start your own service business in just 6 steps!
Step 1: Planning and research
The first step to any business venture is planning and loads of research. It is crucial that you understand and have the answers to the following questions before you start your business:
- What business are you planning for?
- What are the essentials you will require to run your business?
- What is your service business worth in the market?
- What benefits and services are customers looking for in the business?
- How will your service business help the customers?
- How has the market responded to other businesses providing the same services?
- What are the challenges/issues you could face in your business?
- How are competitors facing those challenges and issues?
Step 2: Understanding Financial Need
As mentioned earlier, some service businesses barely require any investment such as consulting or freelance writing. These service businesses can be done from your home, without the need for an office space. However, there are other service businesses that do require some amount of investment.
Get the answers to these questions before moving on to the next step.
How does your startup cost sum up?
The best way to understand your startup cost is by making a list. What are the necessary expenses – office space, uniforms, service items, equipment? Is it possible to cut down expenses by using what you already have instead of buying new ones? Will you require a loan?
How will you work?
Are you going all-in or are you planning your service business part-time? Will you need assistance from additional people or will you be able to handle the first few months on your own?
Your financial target?
What is your set financial goal for your service business? Determine your profit rate, what you will be paying yourself and your employees. How are you planning to price your services?
Step 3: Business plan
Setting up a business plan may take longer hours but it benefits you in the long run. It helps guide you through different stages of your business and is crucial for the growth and progress of your work.
How to write a business plan?
Generally, a business plan is drafted in two ways, either traditional or lean startup. You can take pick from the one that suits your business.
Uses a standard structure
Detailed information on key elements
Requires more work
Requires lots of pages
Uses a standard structure
Focuses on summarizing key elements
Requires less work
Typically finishes in one page
What to write in a business plan?
Regardless of the format, your business plan should include the following details.
Executive summary: Address what your company stands for in this section. Include your mission/vision, your service, and basic information such as employees and location, etc.
Company description: Detailed information about the services you will provide and how they will benefit the consumer. Describe the key selling points that will give you an advantage in the market. Showcase how your business will have a successful turnover.
Market analysis: This section includes competitors’ analysis, market research, and your ability to take on the challenges in the business and the competitive market.
Organization and management: Explain the structure of your business here. Include information that clarifies the type of business you will run. Will your business be a sole proprietorship or do you have a partner? Leverage organizational charts to demonstrate members of your organization and how their capabilities will contribute to your business’s success.
Services: Explain the service you will provide to the customers. Make sure to describe how your services help them.
Customer segment: Be specific about your target audience and how your business will interact with them.
Here’s an easy way how to find and specify your target audience:
- Determine customers who already pay for the service you are planning to provide. Their ages, location, interests, etc. An easy way to determine this is through surveys.
- Research the industries providing the same value as you. Learn about the trends they are following to capture their audience’s attention. How are they channeling their service? What medium are they focusing on?
- Create a customer persona. Include information such as age, location, interests, hobbies, income, profession, and the preferred medium for communication (emails, social media, etc.).
- Leverage digital analytic tools that give in-depth insight into your audience. This insight will help determine key aspects of what your audience prefers such as the types of content they are engaged in and channels they prefer to communicate with.
Funding and finances: Define your cost strategies and your inputs on how your business will generate revenue. The goal is to demonstrate that your business can generate stable revenue and has the potential for financial success.
Starting your own business can be physically and mentally exhausting. Don’t forget to reach out to family members and friends for support and assistance!
Now, with your business plan ready, move on to the next step of starting your own service business.
Step 4: Your business name
Remember! A good company name resonates with the brand and its identity. It should be easy to pronounce, simple, memorable, and should avoid legal issues.
Here are a few tips on how to choose a name for your business.
- Avoid names that are similar to that of your competitors.
- Unique is good. However, being too unique or out of the box can be troublesome.
- Your name should be web-friendly.
- Try synonyms and foreign words.
- Keep it simple.
- Avoid names that do not resonate with your target audience.
- Get feedback.
It can take some time before you find the right name that fits your brand. Make sure to research and try out different words. You can also look into business name generators on the internet.
Step 5: Making your business name official
Once you have the final name in place, the next step is to register your business and make it official. Depending on your location, the registration rules may differ.
In general, to make a business official, you will require to register your business, get permits/licenses, and a tax ID number. You may also require business insurance. Consult a legal advisor to know more about the regulations set for your location.
Additionally, you will also require to set up a banking account for your business.
Step 6: Marketing and sales growth
At this point, we all know the importance of marketing. So, as a startup, how can you market your brand and establish your presence?
Here are a few tips:
- Begin your service business journey with an online presence through social media pages.
- Provide offers and special discounts
- Promote your work so that the audience easily understands your services
- Join different networking events and associations.
- Focus heavily on customer service and get feedback.
- Leverage existing customers to refer you to new clients.
- Send out promotional materials such as flyers, brochures, and pamphlets.
- Add value to your business with add-on services that customers will love.
To sum it up, a good service business requires a lot more than simply providing a service. You will need to be comfortable promoting yourself wherever possible. The work will be challenging and surviving in the market will be tough. You will need good marketing skills as well. It will take time. It will take effort. And you will need patience. But eventually, it will pay off. And when it does, you will come to realize how your financial freedom was in your hands all this time.