How To Start A Service Business Step By Step
Updated: Oct 17, 2019
The service industry is where it all started for me. When I was 19, I decided to start a home cleaning service, and the rest was history. By 22, we were doing millions in revenue, and a lot of opportunities started to come my way. Even though this wasn't a cool industry to get into as a teen, it was worth it. It taught me to follow the opportunity and not what people find cool. To this day, in my opinion, this is the most straightforward business to start on a low budget. Here are some of the industries you can start in the service industry:
Mobile car wash
Tutoring or training
And all other related industries
Lets quickly take a look at some of the pros and cons of starting a service business:
Pros of starting a service business
Low start-up costs (under a $1,000)
Can outsource all the work to someone else
Easy to scale
Unlimited income potential
You can have a client the very same day
My favorite, recurring revenue - depending on the service you decide to go with, whenever a client signs up, they need services regularly
Always in demand
Can all be done online and from home
Cons of starting a service business
You have to find someone that will do the job
High level of customer service
If you decided that this is the business for you, let's gets started.
Pick the industry that suits you best. I've always been a fan of an industry that will bring in recurring revenue. Recurring revenue will give you the confidence of knowing that there will always be money coming in regularly. It's a much easier way of growing a user base at the start.
Have an idea of your end goal. This is important because the preparation will be different, and you'll want to prepare everything accordingly. For example, understand if your end goal is to sell home cleaning forever or if you're going to be selling various services down the line. Knowing your vision is essential, and you'll see why below.
Find a short, memorable, and easy to pronounce name for your company. Also, make sure that the name you go with is available when buying a domain. For example, when you look at all the companies, I'm part of; Sassy Egg, King of Maids, BookingKoala, SalesHangry, 1PRCNT, they all had those domains open:
Having the same domain as your name will make your company look more professional. When buying your domain or seeing if your name is open, you can use:
Also, when picking your name make sure that it fits your vision. If you're selling home cleaning specifically, you may go with a name such as 'King of Maids.' However, this becomes a problem if you decide to expand your services to non-cleaning related industries.
Due to the name, everyone will automatically assume you only offer cleanings and changing your name later is a big deal. Many of those who remember your name may no longer recognize you. It's important to set everything to align with your vision.
You'll need to find a good logo for your business. Make it look professional and relevant to whatever it is that you are selling. Good logos are memorable and simple. If you need help making a logo, you can visit Fiverr.
You will need a website to sell your items online, and making a website on your own is extremely easy. All you need to do is sign up for a service that gives you all the tools you need to build a service site yourself in only a few hours. These services are also very affordable, saving you thousands of dollars by avoiding expensive developers and designers.
BookingKoala is a software that I started back in 2017. Today it's my main focus, and it will make growing a service business very easy. Within a few hours, you can have a website ready to go powered by the same tools that I had to build to scale my company efficiently and quickly. Plus through our marketplace, we will find you clients in exchange for a commission — also, something I did not have when I started (more on that later).
When building out your website, you can use our free templates, or you can purchase a paid template. When modifying your templates, match your branding and colors, and optimize your site as you grow.
Once you start to gain clients regularly, you can begin to optimize your site to increase conversions and sales. Click here to see a list of tools that will help you with that when that time comes.
When you start, make sure to register your business online.
LegalZoom is a service that will help you register your business online. Provide them with some information, and they will file in the necessary paperwork on your behalf. Once the process is complete, they will send you legal paperwork stating that you are an official business.
On top of that, LegalZoom also offers other services you may use in the future. I used them a few times when I started because they provide legal advice for a very affordable price.
Make sure that you are prepared with a desktop or a laptop. If your budget is tight, invest in a keyboard for your tablet if you have one. This doesn't have to be an expensive purchase. See what offers you can find on Amazon - click here to view offers.
Working on a larger screen is much more comfortable. I can't imagine starting out on a phone or a tablet. On top of that, a lot of the services that you will be using are not mobile compatible. Be well prepared.
Focus on establishing a brand the moment you start your service business. People trust brands and building trust in the first few years should be your primary focus. Don't stress over profits; focus on your online image. Sell at break-even if that means more reviews, more testimonials, more publicity for your company. Through BookingKoala, you can create coupons. Create those coupons and distribute the codes throughout your ads. Later people can use them when booking through your website.
Hiring, in my opinion, is the hardest part of this business model. Not because it's hard to find people, but because it's a lengthy process. Most people think that hiring stops the moment someone is hired, but the job is actually done somewhere around 90 days after they are hired.
I suggest looking for someone with 2+ years of relevant experience. If you're hiring someone for home cleaning, they need home cleaning experience and not hotel cleaning experience. It is not the same, and you will be disappointed.
To find someone go to a site like Craigslist, Glassdoor, Indeed or Monster and make a job offer. You can also ask around and see if people you may know are interested. When I started, my first hire was my mother, and she helped us out a lot. Once you have a lead, properly interview them over the phone, background check them and if they pass, add them inside BookingKoala. Make sure to have them sign a binding agreement as well before allowing them to accept jobs.
BackgroundChecks is a good place to run background checks.
Rocket Lawyer is a good place to create contracts and agreements.
DocuSign is a good service that allows you to sign contracts online.
Through BookingKoala, you will quickly decide whether they are a good fit or not. Whenever a job comes in, a provider will be able to determine if they want to accept or decline an assignment. If they take it, the job will be visible inside their account. After they complete the job, the customer will be able to rate the service. On your end, you will be able to track the ratings, and over time, you can decide for yourself if the provider will remain on the platform or if they should be removed. You'll want highly rated providers on your platform only, ensuring your services are excellent.
Imagine how much time all this will save you. When I started, we kept all of our providers inside Google Calendar and had to track everything using spreadsheets. Providers also got their schedules via email. Today all this is done automatically through the BookingKoala software.
Marketing is where things usually go wrong. If you have little to no money, don't go starting with paid ads, nor should you go out and hire a marketing company that offers services for $250 a month. It will end bad nine out of ten times.
Your focus should be to build up your brand and reputation. Pick a channel where people go to find your services and make it your mission to be the top seller. For example, when we started, Yelp was a big deal in the home cleaning industry. The moment we established our profile, our revenue increased significantly. Find where your competition is and work on that channel.
Also, find where your competition isn't and take advantage of that channel. Our marketplace is very new, and those who take advantage of it early will get a chance to get ahead of everyone else. Most people don't take advantage of opportunities until it is a visible indicator that a lot of others are using something. Once everyone else starts using something, it becomes a game of catch rather than staying ahead. Today trying to play catch up on Yelp is extremely hard.
To find your first set of clients, find a free source where you don't spend money on acquiring customers. I mentioned our marketplace above; however, chances are we may not be in your area or industry yet. If that is true, sign up for it and be the first to get notified when we launch in your area or industry; that way you can be ahead. In the meantime, look for a platform like Craigslist or equivalent to Craigslist in your area. It's free to look for clients on there. People on Craigslist look at the price, and you can take advantage of that opportunity. Use coupons to pull in those customers. A combination of a professional brand and a low offer will get you a lot of sales.
Later push everyone to leave a review on a site that matters. Work hard in the first 12 months and gain as many reviews as you can. Keep repeating the same process until you see $5,000 in profit per month. Once you hit that goal, you should now start experimenting with your marketing ideas. Up until this point, this will all be manual labor. Don't pay for ads or leads until you are making money organically every month.
Remember, this is all hard work. You have the blueprint, one that I had to figure out on my own, now you have to do the work and want it bad enough.
I'd also recommend checking out a blog post I wrote on how to sell more stuff - click here.
If you ever are thinking about hiring a marketing company, I'd also encourage you to read this post - click here.
Always remember the fundamentals
Bookmark this entire guide and come back to it whenever you are confused about something. These are the fundamentals of building a big brand on a low budget, and you will never want to forget them. Fundamentals will get you to the big leagues.
Look at it this way; in basketball, there is a proper way of shooting a basketball. If you are a shooting guard using the wrong shooting form for 20 years, you're going to miss out on a lot of awards, records, and opportunities. The same applies to business. If you don't learn the fundamentals, you will leave a lot of money on the table. Not only that, but it will take you longer to generate any sales, resulting in frustration.
Focusing on the fundamentals of the business will help you get small wins faster, which are vital to keeping you motivated, preventing you from eventually quitting. I know this is a lot to take in all at once, but if you keep working at this daily, it will start to become part of you.
Remember, every success story has a beginning.