How to Successfully Start and Run a Service Business

February 25, 2013 | By | Reply More

What do you need to succeed in a service-oriented business? Here are a few ingredients that you need to successfully start and run a service business.

1. People Skills

The success of your service business depends on your ability to work with various clients. You will have all kinds — some demanding, mercurial, passive, and some who do not seem to know what they want. Others change their minds so often that it is hard to keep pace with every change of their whim and wants. Nonetheless, your clients are your bosses, and your business hinges on how satisfied your clients are with the quality of your service.

service business

To successfully deal with clients, you must have loads of patience, the ability to read people and ask them the right questions to draw up what it is that they really want. During your first meeting with potential clients, listen carefully as to what they want. If you are a wedding coordinator, what are the client’s preferences? What is the bride’s vision for her wedding? The initial meeting or consultation is your moment to size up the clients, gain their trust and establish a rapport.

However, you must also use your intuition in choosing your clients. During your start-up phase, you may be thinking that it is bad business for you to turn away some clients. The truth is you need not accept every client that comes your way, particularly if the client has a totally different way of looking at things from you. You and the client must, at the very least, share the same fundamental principles. If you are a fashion designer who favors minimalist design, it may be hard to please a client who wants avant-garde, over-the-top clothes. You may end up trying to be what you are not. Or you may just be wasting your energy trying to convince the client to your way of thinking. It is not productive to work with clients who are not a good fit for your business.

2. Contract

A well-written contract is a must-have tool for every service business. Whether you are a wedding photographer, a web site designer, a consultant or an accountant, it is best to put that handshake into a written agreement. An unambiguous contract can help protect your business, clarify expectations with your client, and clearly define the deliverables. It must also reflect the special rules in your location governing your kind of business.

To save costs, you can draw up the contract yourself and simply go to a lawyer who can review and revise your draft for a small fee. You may be able to find an attorney willing to help you keep your start-up costs low through referrals from friends, fellow entrepreneurs, colleges and universities, and organizations such as your local Small Business Development Center (SBDC). When approaching a lawyer, be sure to clearly specify what you want done and clarify the costs involved. You don’t want to be charged for services that you do not really need.

3. Smart Pricing

Determining the price of your service is one of the trickiest questions in starting a business. The price of your service must be based on the perceived value of your service (or what you can offer to your clients), as well as the prevailing market and competitive conditions.

You may be tempted to offer prices so low in an attempt to attract clients away from competitors. Be careful, though: there is a difference between a bargain and being cheap. Competing solely on price alone, or being cheap, can backfire on you since customers oftentimes equate the value that they can get from a merchant with the price. In a customer’s mind, a merchant’s service is “expensive” because the merchant may be offering something uniquely special. Plus, they can get bragging rights for using a merchant with a reputation for being expensive.

On the other hand, you can introduce low prices by positioning your service as “value for their money.” Customers will think that you can deliver something that requires very reasonable investment. With this approach, your service can be perceived a bargain, but not cheap.

If you plan to lower your price or offer a discount to a client, do so only to get something in return. Don’t give discounts away like every customer deserves one. The lower price may be in exchange for referrals to other clients, longer-term contract, bigger package, or other concessions.

4. Continuous Marketing of Business

Like any other business, you need to dedicate at least a couple of hours everyday to get your name out there. You can use a variety of techniques: networking and participating in organizations, publicity and public relations, advertising, and making use of other mediums such as a Web site.

Word of caution, though, in using the Web to sell your services: a web site is not always effective to sell a service business. For the Web to become an effective medium, your business should be easily understandable to the audience. It should be a standard or common business where people already know what to expect when they buy your services. Customers should know what the business is, understand what to expect from such a service, and know when and how they need that kind of service.

An example would be a public relations company that charges a fee for writing and distributing press releases. The deliverables are clear, a sample can be provided on the web site, and a standard price can be set, even with a few customizations.

The Web may be a less effective medium if your business is so new and esoteric that customers may not understand what it is that you are really selling. If this is the case, you would need to work harder in educating your customers and making them understand how your service can benefit their lives or businesses. The site can simply be a brochure where people can get your contact information should they be interested in your services.

Save for a means to tell people that you exist, businesses like consulting may not work well for the Web. A consulting business, for example, requires extensive inputs from the client. You first need to sit down with the client to determine their needs before you can present your price and deliverables.

5. Follow-Up

Your success depends on how your clients perceive your service. You may think that you’ve done such a great job, but your client may have a thing or two about how you delivered your service. To help further improve your service, and correct the mistakes you’ve made, it is important that you get the feedback of your client. It also reinforces the client’s belief that he or she is important to you.

After the end of a contract, check back with your client and ask for his or her opinions about your service. It may be in the form of a survey, or a brief chat. If they are satisfied, you can even ask for testimonials and referrals to their friends, family and relatives.

Recommended Books on Starting and Running a Service Business:


Jenny Fulbright

Jenny Fulbright

Jenny Fulbright is a writer for

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