What to Consider Before Starting a Service Business
Starting a business is tough, end of story. If it was easy, everyone would do it.
Starting a business of any kind is no easy feat. There are a lot of moving parts that you need to stay on top of. You also may find yourself in some unexpected situations and you’ll need to be able to deal with those properly.
Here are 5 things you should consider before starting your service business.
1. Know everything about your industry
The more you know about your industry the better you’ll be able to understand industry trends and changes as they present themselves. The internet is a great option when it comes to doing your own industry research, but don’t overlook the ease of calling some existing businesses in the industry.
Is the industry highly competitive?
Don’t just trust your gut on this one. Understanding your competition should be one of the first things you look at. You can go pretty deep on this question but local review sites are a good place to start. Are there a lot of really well-reviewed competitors?
Is your industry seasonal?
Are you looking at starting a landscaping business in a city with a long, snowy winter? If so, you’ll need to think about what you’ll do during the winter months. If you’re looking for a less seasonal industry, maybe explore residential cleaning or painting.
2. Know your customers
Your customers are your most important asset…so you better understand how they think! Understanding what your customers want will help you to deliver a service that exceeds their expectations. Exceeding customer expectations will help you build customer advocates and grow your business through word of mouth referrals.
This article from Inc.com has a list of 5 Ways to Know What Your Customers Want Before They Do.
3. You'll need enough green
You’re starting a service business to make money so be sure to investigate the earning potential of your industry. You’ll need enough to cover your family expenses and personal expenses while still having enough left over to reinvest some in your company’s growth? This is an extremely important point to consider because if you aren’t happy financially, you won’t be in business for very long.
Will your service business have any hidden costs?
Running a business is expensive, so planning for the unexpected can save you a lot of pain. Have you thought about the cost of gas, driving from visit to visit can add up quicker than you think.
Taxes are inevitable but many small businesses lack proper planning and documentation when it comes to their taxes. Working with a bookkeeper or accountant from the start can save a lot of time and money when tax time rolls around.
Writing down all the costs you expect is a good way to make sure you haven’t missed any and will give you a good idea of what it will cost to run your business.
4. All the hats
When first starting out, you’ll spend the majority of your time doing nearly everything for your businesses. You’ll be the sales, marketing, finance, HR, and service department all at once. You’ll have to figure out how to sell your services to potential customers, take care of your employees, negotiate salaries, create a marketing plan, pay for insurance, and more just to keep your business growing.
But don’t despair! If you’re prepared for it, you can create a plan to get through it. Wearing all the hats won’t (and can’t) last forever and there are great resources to help you balance all your hats.
5. The bottom line
It’s important to carefully consider all the different components that go into starting a service business. While you can’t plan for everything (and surprises will happen) if you’re prepared as possible for any problem or situation that comes your way, you’ll be able to take it on like a champ.
Now get out there and start that business!