ArticlesBlog

Launching a Service-based Business

Launching a Service-based Business


BEN TYSON: Hello. And welcome to 2016 in
the Google Small Business Community. My name is Ben Tyson. And it’s a new year,
so that means it’s time to start that new business. With that in mind, we’ve
invited small business expert and author Julie
Gordon White to give us her best tips and tricks
on business planning. Julie, thanks so
much for joining us. JULIE GORDON WHITE: Hi, Ben. Thanks for having me. BEN TYSON: Absolutely. Can you tell us a
little about yourself? JULIE GORDON WHITE: Sure. Well, I’ve had the pleasure
of working with thousands of small businesses
over the last 12 years with my mergers and acquisitions
firm and through my book “Exit! 12 Steps to Sell Your Business
for the Price You Deserve” and my company The WELL
for Women Entrepreneurs, where we have online
training, called Accelerate. BEN TYSON: Fantastic. Well, today, we’re going
to talk about starting a service-based business. And if it’s OK, I want to
start with a statistic, Julie. According to the Bureau
of Labor and Statistics, the service sector is actually
the largest contributor to the US economy, accounting
for more than 70% of US jobs. Now, with that in mind, we know
that a service-based business is obviously less tangible
than other types of businesses. How can someone starting
a service-focused business really demonstrate their value? JULIE GORDON WHITE: Right. Absolutely. Well, right out of
the gate, you really need to figure out who
you’re going to get the best results for fastest. I mean, that’s critical, right? So whatever you
offer in a service, who can you really
make things happen for? That’s what’s going to
make your business exciting and get traction and
more customers faster. And so the other piece of
that is to really narrow down who you’re focusing on. So I call it being a big
fish in a small pond. So when I first started
selling businesses before I got into multimillions,
I sold flower shops. I literally started a company
called Flower Shop Brokers. And then every florist
in the Bay Area knew that I was
the one to go to. And so I really recommend that
you focus that niche down, way down, so you can be the
big fish in the small pond. And then people know that you’re
the service provider for them. BEN TYSON: Interesting. Well, one of the things
that’s often overlooked are the requirements of
a service-based business. So I’m curious, how do I find
out what requirements there are for the service industry? For example, are there licensing
requirements, and so on. JULIE GORDON WHITE: Yeah. Well, of course, every business
needs a business license. So make sure you
take care of that. But depending on your
service, again, you can go to your
trade association. That’s a great place,
a great resource to find out what you need. If it’s, let’s say, a senior
care business, then, of course, there are going to be
permits and licenses. So be sensitive
to what you might need in your specific area. And refer to your
trade association. They’re really going to be a
wealth of information for you. BEN TYSON: OK. And let’s talk about
money for a second. Because what I find in
the service industry is setting a price
is difficult. How do you know if it’s
comparable to other companies? So what is your advice on
setting my rate, as well as, how can I create
recurring revenue to have more predictable income? JULIE GORDON WHITE: Right. Well, I love
reoccurring revenue. So we’ll get to
that in a second. But yeah, that’s one of
the biggest questions that I get– how do
I price my service? So what I suggest is
doing a matrix of pricing. Plug in your competitor,
someone that offers something similar to you. And then figure out,
based on the landscape, do you want to be
the premium provider? Do you want to be the
value-based provider? Or is it more appropriate for
you to be the economy provider? So figure out where you
fit in the marketplace. And then you can
price around that. That gives you a
good starting point. Now let’s talk about
reoccurring revenue. So reoccurring
revenue is fabulous because it gives you consistent
cash flow and predictability in your business. And that’s a big issue
for service companies, because they’re usually feast
or famine– you market it, then you do it. Then you market and do it. And so it’s a real
roller coaster. So finding ways
that your customer actually wants to
receive the same product every single month,
kind of a consumable. Maybe you’re in IT, so it’s
a maintenance contract. If you’re in a
product company, it’s something that you deliver
every single month. I’ve worked with a client that
had a plant rental business. So she went in and she watered
plants every single month and replaced the plants. So reoccurring revenue
is a beautiful thing. We’re in the age of the box
of the month for everything right now. So every single business can
have reoccurring revenue. I highly recommend it. BEN TYSON: Very cool. And how can I go about scaling
my service-based business when it’s just me at first? JULIE GORDON WHITE: Yeah. There’s really two ways. So if you want to
grow with people, then you need to have a
proprietary process, so a process that you can
implement over and over, pretty close to the same
process with different clients. So that way, you actually
have almost like a product out of your service. And then you can
teach other people. And you can use that
system for marketing, too. It’s really, really powerful. But let’s say you want to just
have a very highly customized service business. Then you can scale
with revenue and income by charging a lot–
premium pricing, right? So I have a client
that has a company that produces PowerPoints,
but they’re five-figure PowerPoints,
because there’s this amazing, incredible
process they built in to make a customized
PowerPoint presentation. Incredible. So you can scale with
process and people. Or you can scale with
customized, high-level, premium-priced services. BEN TYSON: Very good. And to sum up, what
is one thing that you want every small business owner
to remember before they get started? JULIE GORDON WHITE: Yeah. Well, you’ve got to start
big and think big, right? I’m all about,
grow to a million, and, someday, sell
for millions, or more. So think big right
out of the gate. But don’t be paralyzed by that. Just start right where you
are with the next best step. And then one thing
that cures all is you’ve got to sell
your way to success, Ben. Sell, sell, sell. It covers up for a lot of
mistakes along the way. And it keeps you in business
doing what you do best. BEN TYSON: Fantastic
stuff, Julie. And if you want to
learn more from Julie, you can attend her free
webinar every Wednesday at 10:00 AM Pacific, called
The 21 Day Business Plan. We’ll also post more
detail in the communities on how you can sign up. Julie, thanks so much
for being here today. JULIE GORDON WHITE:
Thanks for having me, Ben. BEN TYSON: And thank
you for watching. As always, you can find all
of our content at g.co/gsbc. And please follow us on
Twitter, Facebook, LinkedIn, and, of course, Google+. Until next time, I’m Ben Tyson. Thanks for joining us here
in the Google Small Business Community, the place
you go to get the help you need to succeed on the web.

Comments (10)

  1. Tell us how i start

  2. Great advice thank you!

  3. great video, thanks!

  4. Great advice. Thanks for sharing!

  5. great advice on adwords thanks

  6. Juli amazing your words have great wisdom and insights. I appreciate your thoughtfulness in your answers. I am having service based and product business. I see most of things you share are very realistic to me…. thanks for sharing.

  7. Be a big fish in the small pond

  8. Www.mintsofficeservices.com

Comment here