Here are five things every entrepreneur should consider when starting a service business.
1. What’s my unique selling proposition? The idea behind a unique selling proposition (USP) is fairly simple: What makes your service business different than your competitor’s? Identifying what sets you apart (and supporting that message through marketing and customer experience) is especially critical in the service business because you don’t have the support of tangible goods, whose design, quality and even packaging all contribute to your brand ubiquity. Ultimately, the consumer perception you create about your service becomes your brand reality in the marketplace.
2. Where is my audience? Your service business is only as successful as the degree to which you understand how your service can fill a need need your target audience has — and where to reach them. Create an “ideal customer” image, including the hobbies they partake in, reasons they need your service, the types of media they use regularly and other brands they like, to craft a strategic media plan. Despite that social media is a lower cost marketing channel, or that traditional advertising strategies tend to be more costly, there is no “one size fits all” approach to marketing; it’s contextual based on your target audience and your business goals.
3. What costs can I manage? The degree to which you optimize the inherent costs associated with your service business is a key factor in your performance. Often times, the most impactful controls are the simplest to implement. Consider the impact a GPS tracking system implemented into your operations strategy can have if you use vehicles as part of your service business: Delivery schedules are based on real-time customer demands and traffic patterns to optimize fuel expenses, and customers can be alerted when drivers are en route, for improved service, while reducing driver “wait times.” Another example is related to car batteries. If your business use vehicles in everyday operations and if you choose to use increased cyclic durability car batteries for your business vehicles compared to conventional automotive batteries you will save a huge amount.
4. How do I keep customers happy? The intangible nature of a service business demands forming a connection with customers to resist competition that may replicate (or surpass) the value of your offering, at a lower cost. Consider how you can structure loyalty programs that reward customers for their continued patronage, either by discounts, free items or even special VIP treatment like prioritized scheduling, or reduced wait times, based on their purchase behavior.
5. How easily can I adapt my service offering? As you gain customers and a real sense of the costs associated with various facets of doing business, you’ll likely identify where you may need to adjust pricing or the details of what your service offering entails. The longer you’re in business and have the opportunity to spot various trends, you’ll likely begin to see the ways in which you may be able to grow your business and extend your perceived value further, with service line extensions. The ease with which you can adjust your service offering to meet the changing demands of the market over time is critical to staying relevant in the service business, especially as technology and other macroeconomic factors that are essentially out of your control will shape the behaviors and expectations of your customers — and your future business opportunities.
Starting a service business presents a unique set of challenges for entrepreneurs, including understanding how to carve out a solid brand in the marketplace when your service promise is the only “product” you have to sell, and how to optimize unavoidable costs of doing business to achieve a maximum return on investment. That said, owning a business is often a continual “test and learn” opportunity — despite your best planning. What are some the most valuable tips you’ve learned in the process of starting a business?