Are you thinking about starting a service business?
If that’s the case, the first question that pops up is “How do I run a service business?”
Experienced entrepreneurs would probably advise you to put your customers first and try to satisfy all their needs. But there’s so much more to it!
For instance, do you know your customers? I don’t mean do you know each and every one of them personally, of course, but do you know what they want and what inspires them to make a purchase decision?
Oh, yeah, there’s definitely some work you need to do in order to run a successful service business.
But before we dive into the tips and details that make a successful service business, let’s make it clear: what is a service business?
What is a Service Business?
A service-based business is a business that offers services (pretty simple, right?). This means that the products being sold are intangible, i.e. the value that is offered has no physical form.
Here are several examples of service businesses:
- Computing services like cloud infrastructure platforms. Examples: Amazon Web Services, Google Cloud Platform.
- Software services like cloud-based sales automation platforms. Examples: HubSpot Sales, Pipedrive.
- Marketing services such as promotion and advertising. Example: WebFX, Proximity.
- Financial services like bond issuance. Examples: USAA, Navy Federal Credit Union.
- Insurance services like health insurance. Examples: Metlife, United Health Group.
- Research services like competitive intelligence. Examples: Ameritest, BARE International.
- Consulting work. Examples: Cooley, Kimley-Horn.
- Professional services such as legal advice. Examples: Baker & McKenzie Law, Clifford Chance.
5 Tips to Help You Run a Service Business
1. Know Your Target Customers
As I mentioned earlier, knowing your customers doesn’t mean you need to know them personally. You need to find out what they need and want to buy.
If you have conducted market research before starting your business (which is highly recommended), then hopefully your service is designed to fulfill a certain need of a defined group of people.
Once you determine your target demographic, you need to find a way to reach them with your service and provide what they want.
The best way to find out is to simply ask questions either through surveys or in the field. Pay attention to the questions you’re asking. Try to keep them short so that people don’t get bored/annoyed in the middle of the survey.
Also, ask specific questions that will give you quality feedback. Ideally, ask up to three questions such as: “What do you like best about our services?” or “How can we improve our services to better suit your needs?” This will allow you to detect your weak spots and sell your services easier.
2. Be Unique
In order for customers to decide to use your services, you need to offer something that sets you apart from the competition. Are you faster than your competitors? Maybe your prices are lower or your quality higher? Are your services super-easy to use? Are you eco-friendly? Find something that will appeal to your target customers and attract their attention.
In general, focusing on one unique feature should suffice. If you try to do very well in two or three things, for instance, offer high quality at a lower price, you’ll eventually need to sacrifice one of them.
3. Market Your Service Business
It might seem difficult to find an effective way to market your service business while at the same time learning how to run it, but if you have conducted a research and you know your target customers, then it is perfectly doable.
In today’s market, having a marketing plan is a must. If people what to find your services, the first place they’ll be looking is Google and/or social media. So, if you’re not present online, you might as well not even exist.
The best way to determine the ideal marketing strategy for your service business is to test. Try out several different marketing methods and track the results. Analyze and compare which ones pay off and which ones have failed.
The methods you’ll be using depend on several factors. For instance, SEO can be very cheap and effective but it requires plenty of time and patience. If you want immediate results, Craigslist might be a better option for you.
Your marketing strategy will also largely depend on your budget. If you’re just starting out, you probably don’t have a big marketing budget, so it’s best to focus on inexpensive or free of charge methods, such as:
- Build a great website with a good domain name (because that’s the first impression people will get about your business)
- Sign up for free online directories
- Post ads on Craigslist
- Ask happy customers for positive reviews
These simple marketing methods are more than enough to make your business visible and give you enough time to plan a detailed marketing strategy.
4. Build an Email List
The most valuable asset of your service business is your customers. That’s why it is very important to gather enough information from the people who have already used your service. These people are your target market and are very likely to return if they’re happy with your company.
Getting their name, email, and phone number will allow you to continue advertising directly to them and encourage them to become regular customers. Start building your email list from day one, even if you’re still not ready to begin an email campaign.
5. Rely on Technology
When you start running a service business, you’ll soon find that you need to do much more than just the service you’re offering. We’ve already mentioned marketing, but there’s also accounting, legal matters, quoting, payroll, etc.
That’s why it is important to take advantage of technology whenever you can to automate certain tasks. There is a large number of tools out there that you can use to automate various tasks, such as sending email newsletters, publishing content on social media, etc. You can even automate your sales process! Whenever you have a tiresome task that takes up too much time, simply go to the app store and look for an automation solution.
Some of the best business automation tools designed for smaller brands that will help you take your venture to the next level are Zapier, Hootsuite or Buffer, Calendly, Google Ads, etc.
The above-listed tips are enough to give you a good starting point. However, the only way to really learn to run a service business is to actually dive in it. Good luck!