If you have a special skill or area of expertise, a service business could be right up your alley. A service business is simply an organization that provides a unique service to customers.
Accounting firms, ad agencies, landscaping businesses, house-cleaning services and salons name just a few of the hundreds of service businesses in operation today.
Here’s how to set yourself up for success.
1. Ensure That People Will Pay for Your Service
This sounds simple, but it is critical to your success. There must be a need for what you do in your community.
Before you start your business, do plenty of market research, understand and learn from your competitors, and learn as much as you can about the people—your future clients—in your town or community you plan on marketing to.
2. Start Slow
It may not be the best idea to quit your job and jump into your new endeavor head-first. If possible, consider first offering your services on the side while you still work a full- or part-time gig. This allows you to evaluate your market and get a feel for what it takes to run the business. Plus, you can slowly build your clientele until you are generating enough business to make your new venture a full-time job.
3. Be Realistic About Your Earnings
An experienced CPA in a high-income area could easily earn six figures in the first year. A dog groomer, not so much. Upon starting up, you might barely break even. Early on, you might even spend more money than you take in. Before doing anything, create a budget and ensure that you have enough savings to support the business and yourself until you start turning a profit.
4. Draft a Written Stategy
Whether you decide to start slow or go at it full-steam, spend some time writing a complete business plan. Doing so will give you a realistic assessment of how much money you will need and how much money you can expect to generate in the first few years.
But be aware that once the business has started, your strategy will need to be updated and changed to fit reality. You may find that the money you actually make is only half of your projections.
As such, make sure you addresses these possibilities.
5. Put Your Finances in Order
Once you know how much you need to start the business, figure out how you are going to obtain the funding. Can you turn to your savings? A family member? Or will you need to get a loan from a bank or an investor?
6. Learn Your Legal Requirements
Check with your local government to obtain the proper permits and licensing for your area. In addition, apply for any certifications and licenses required for your industry, field and locale.
7. Get Insurance
It’s worth the cost to protect yourself and your business. Many providers offer insurance to small business owners, so shop around and find one that you can afford.
8. Educate Yourself
Many people put pressure on themselves to start a business as soon as possible, as if success was determined by speed to market. In reality, the people that often succeed take their time and really learn about their industry, business and market.
Find out where, how and why your type of business is successful, and find out where it doesn’t work. Is it a business that will need to scale in order to turn a profit? If so, how will accomplish that?
Ask as many hard questions as you possibly can, and then go out and get the answers.
9. Market Your Services
To make it big, you must promote your services. You can start small, for example, by ensuring that your information is correct on Yelp and in the Yellow Pages. In addition, hang signs in local shops with the owners’ permission, post your services on Craigslist, and offer current clients discounts for referring you to others. Then, as you build your client base, create a website, take out ads in the local paper, and even consider direct-mail pieces and T.V. and radio ads.
10. Don’t Do It Alone
One of the biggest traps that entrepreneurs face is getting lost in the details and the day-to-day tasks. Anyone who has started a successful business will tell you about the people that helped them succeed, just as everyone who fails will have an “if I only knew” story.
The best way to combat this is to surround yourself with people that have more experience and are wiling to help you succeed. Mentors are invaluable not just at the beginning, but also before the beginning and well after. Make sure you seek them out and nurture those relationships.
Getting your business off the ground can be an extremely difficult proposition, especially if you are working another job. So be ready for the rigors of business ownership. Make sure that you have the dedication and energy to push through the hard times. Entrepreneurship is not for the faint of heart, but this is also one of the reasons why it can be so rewarding.