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5 Tips On How to Run a Service Business

If you are thinking of starting a business or have already started a service business you may be asking the question “How do I run a service Business.”  If you asked 5 different people they would probably all give you the same old advice:  Be friendly and bow down to each and every one of your customers’ demands.  The customer is always right and all that stuff.  Well, as it turns out, there is a lot more to it than simply treating your customers well and that’s exactly what I plan to discuss in this post.

Typically my posts are directed toward a handyman business, and this is no exception.  However, this article should apply to just about any service business out there.  It is knowledge that I’ve learned while running my handyman business.  Take this advice and apply it with your own unique style and you will soon be reaping the rewards of running a successful service business.

Tip #1:  Have a Handle

When I say have a handle, I mean a competitive advantage of some sort or even just a specialty.  In other words, be unique.  This is why people will choose you over somebody else and you can avoid just offering another commodity service.

A handle can be a variety of things, but it must appeal to your target audience.  Are you fast?  Are you cheap?  Do you offer quality that you can’t get anywhere else?  Are you environmentally friendly?  Are you easy?

If you aren’t doing at least one of these things better than your competitors, why should customers choose you?

Furthermore, I recommend to focus on a single handle and do that very well.  If you try to do two things really well such as be fast and quality, one or both of these is going to be sacrificed.  Attempting to offer quality at a low price probably won’t work either.  In order to be quality you need to use quality materials, hire quality staff, and offer some sort of guarantee.  All of these extras cost money making it nearly impossible to be a low cost quality service provider.

Tip # 2:  Know Your Customers

I don’t mean that you need to know your customers personally.  I’m just saying that you need to understand what they want and what motivates them to make a purchase.

Hopefully, your service is designed to fill a need of a very specific group of people that you have defined very clearly.  One example of filling a need for a handyman business would be to specialize in home modifications for the elderly.  Your target market would pretty clear in this case.  Now, just ask yourself how you can reach these people with your service, and how can you provide them with exactly what they want?

The best way to get to know your customers is to ask questions.  It seems simple, but not enough service business owners do it.  In order to get effective feedback, I’d recommend asking questions in the field as well as in surveys.

Also, ask good questions.  Asking your customers to rate you on a scale of 1-5 will tell you whether or not you suck, but you’re not going to gain any insight on how to improve.  Instead, keep it short and ask 1-3 good questions such as “How can we make our service better suite your needs?” or “What was the best part of your experience with us?”  You’ll get some really good insight that will allow you to sell your services so much easier.

For more on getting to know your customers, read my post on Targeting the Right Customers.

Tip #3:  Effectively Market Your Services

This is probably the most difficult piece of the equation while learning how to run a service business.  But, If you’ve done your research and know your customers it will be a little easier.

The best advice I can give on this subject  is to test.  This is by far the best way to find a marketing combination that unlocks the cash flow.

By testing different methods of marketing and tracking the results, you can compare which ones are paying off and which ones you need to drop.  This can be tricky however, since some methods of marketing will take several months to bring in business.  A website is an example of this.  While others, such as craigslist will bring customers immediately.

I’ll go ahead and assume you don’t have a large marketing budget to start with so I recommend starting with a good website and the freebies.

Here is a list of marketing methods that I would start with if your short on cash (in order):

  1. Get some business cards made.
  2. Setup a website and choose a good domain name.
  3. Sign up for the free online directories.
  4. Post several ads on craigslist and update frequently.
  5. Solicite online reviews from customers.
These methods of advertising will get you business while you refine your service and start testing marketing methods such as social media, direct mail, door hangers, radio, or even TV.

Tip #4:  Technology is Your Friend

While running a service business, you will find yourself doing much more than just the service you intend to offer.  There is accounting, marketing, quoting, setting up accounts, payroll, handling legal matters, etc.  I think you get the point.  There is a LOT to do.

So, it’s important to utilize technology wherever possible to automate certain tasks.  If you have a task that you think should be easier, chances are that somebody else has figured out a way of making it easier and will be more than willing to sell you their product.

When I have something that takes me too much time, I go straight to the app store for a solution first.  If you aren’t already using a smart phone, you better get one before you try and run a service business.  Otherwise, you will be at an immediate disadvantage.

Tip #5:  Build a List

What do you think is the most valuable asset of a service business?  It’s not their vehicles or their website or even their company brand.  In most cases, the most valuable asset of a service business is it’s list of loyal customers’ information.

Think about it.  These people already payed you for your service.  They are your target market.  If you get their information you can continue to advertise directly to them knowing they have already been qualified.  If business is slow, throw together a quick deal and send an e-mail out to your customers.  Bam, instant business!

Every time you provide a service for a customer, you need to get their name, number, address, and e-mail if possible and add it to your list.  Even if your not ready to send out e-newsletters and continuously market to them, start building a list from day one.

This is one of the best tasks to automate with technology.  AWeber (see banner ad below) is the premier e-mail list manager and marketing tool out there.  Highly recommended.

If you follow these 5 tips, you will be off to a good start.  However, the one and only true way to learn how to run and service business is to actually do it.  You can read all you want and research all day long for a year, but there is nothing like diving in head first.

Just go for it.  If your business fails, learn from it and start another one.  It’s the American dream!

So, what do you think?  Please let me know your thoughts in the comments below.

Big D.




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