Do all businesses mean products?
Most people, when they think of having a home business, think of having to sell a product. They think of having to sell some doohickey or thingamabob to other people. They think it’s expensive — and where do you store the inventory anyway? But one of the cheapest, fastest and easiest ways to make money from home is to sell your services.
There are so many different services you could offer for sale. From skills and training, to hobbies and talents, to just the willingness to work hard, you’ve got something you can do for someone else for money. You may just not know what yet.
Three types of services
There are three different types of services that are generally offered for sale. Professional services are those that someone trained offers. For example, an accountant, a paralegal, or a real estate agent might offer their professional services from a home office. Talent-based services are things people do based on innate talents or skills they might have. A singer, for example, or a dancer, or perhaps a designer of some kind, are all talent-based services, and many have home studios. And finally there are the work-based services that those of us without professional training or developed talents offer. Things like cleaning, personal assistance, or child care are often home businesses that rely more on the willingness to work than on any special talent or education.
All three kinds of services can be used to develop successful home businesses. . And all three have some basic common elements. Like all businesses, they require a plan, a market and advertising. Unlike product-based businesses, service-based businesses require an ability to connect one-on-one with clients — either in person or over the phone. Pricing for service-based businesses is also different than a product-based business. And so is the marketing plan.
Customer service is most important
With a product-based business, most of the transactions can be handled from a distance from the customer. In other words, you don’t have to have a lot of face-to-face, direct contact with a customer to sell a product. Especially if you are selling online. But with a service-based business, all of the selling and most of the actual service is done with direct contact with the customer. So if you aren’t a people-person, a service-based business probably isn’t for you.
Because of the frequent, regular contact with customers, customer service is vital to a service-based business. Without great customer service, you don’t have a business. Reviews, testimonials and referrals will be the lifeblood of your marketing plan. And one bad review could sink your business for good.
Have a good calendar system
One of the most important tools to a service-based business is a calendar system. You need to be able to schedule appointments and meetings with clients. Whether it’s a paper version or an online system, such as Acuity, it needs to be easy to access, easy to review, and easy to update. Many businesses prefer something online, as it means the client can virtually book appointments without having to connect directly with a person. That leaves you, the service provider, more time to actually work without having to pause to field inquiries and set appointments.
Price your service competitively
This may be an obvious statement, but many beginner business owners make this mistake. They price themselves too low, in order to try to build up a clientele, and then find it hard to increase their prices to make the income they want. Start out the way you want to go on. Do the market research before you open for business, and price yourself accordingly. Not only do you help yourself, but you help your industry as a whole. After all, when someone prices themselves way too low, customers start thinking that normal prices are too high, and demand discounts, which hurts everyone. Set your prices competitively.
In developing your pricing strategy, you also want to consider the type of income you want to make, what your target market can afford, and what level of service you can offer. A professional accountant, who has been working for a corporation for years and is now launching their own business can offer their services as a premium over someone who is starting their own accounting business straight out of college. For myself, I price my services based on what my target market — the beginning entrepreneur — can afford.
Marketing your service-based business
Marketing a product business is a little easier than a service business. Take a picture of your product, share what it does and why it’s better than the competition, price it well, and voila — sales. Customers know they will get something tangible for their money. But with a service, nothing really tangible gets exchanged for the money. It can be hard to point to the value of the service, at times.
With a service-based business, promoting the value of the service is imperative to creating sales. Marketing is based on the direct benefits to the customer. Does your service save them time, money, effort? Does it fill a need? Solve a problem? How exactly does your service help your client? That’s what your marketing plan is going to be based on.
What is the benefit?
A cleaning business saves their clients time and effort. I personally hire a cleaner. My time is more valuable than the cost of the cleaner. So it makes sense to me to hire someone to do that mundane job for me, when I can be doing something more profitable or important to me.
An event planner offers a service that saves their clients time, and solves a problem for them. Rather than spending all the legwork and effort on researching, finding and reserving venues, catering, or entertainment, the client can hire someone who has the contacts already. And often, an event planner can get a discount for their clients, so they save money too.
Marketing your business will require you to describe just how your service helps your client. You’ll need to get specific. This is where reviews and testimonials are extremely useful. You can use them to demonstrate just how your service has helped others, so that your clients can see for themselves the value of paying for your service.
When you market your service, use case studies, stories and examples to show exactly what you do for your clients. The more detailed you can be, the more your customers can see your value. You need to paint them a picture, since you can’t take a picture of a physical product.
Service-based businesses: cheap and easy to start
There’s no inventory with a service-based business. You can start a business with a phone number or an email address. All you really need is a way to help someone else. Do you have training or education in some field? Or maybe you are naturally gifted in some area? Or are you just plain willing to work? Then you can start a service-based business.
Want to start a business but unsure how? Let’s chat. Book your Business Brainstorming session now.