If you’ve ever had a pipe unexpectedly burst or accidentally given yourself an uneven haircut, you know the importance of a service business.
Service businesses primarily trade on valuable skill sets and accumulated experience, rather than products. Successful services businesses marry business skills with service quality to provide customers solutions to any number of issues.
If you’re great at something that many people need (tax filing, snow shoveling, wedding planning, hair styling), you may be considering starting your own business centered around those professional services. Learn how to start a service business.
Service business ideas typically fall into a few categories:
As with any business, a service business starts with an idea. After you find your niche, follow these steps to launch your company:
The first step in any new business venture is to identify your goals. These can be lofty (i.e., boost self-esteem, one haircut at a time) or grounded (i.e., help five local businesses thrive through better social media marketing by the end of the year). Craft goals that reflect your initial reasons for starting a business and are strong enough to continually guide your business decisions.
Use the SMART framework (which ensures goals are specific, measurable, achievable, relevant, and time-bound) to detail your desired results and provide a framework for how to achieve them.
Next, write a business plan. Use a template or outline to create a document that captures your goals, strategies for achieving them, and the ideal timeline.
Include these core elements in your business plan:
Depending on the type of service business you’re looking to start, you may need to secure external financing. For example, you might have more overhead if you need a physical space and commercial property insurance. Funding options include taking out a small business loan with a bank, crowdfunding among your supporters, or pitching individual investors.
To protect your company’s (and your own) finances, determine which types of business insurance are necessary for your industry. A business owner’s policy, for instance, bundles the most common types of coverage, including general liability, property damage, business interruption, and workers’ compensation. Service providers whose work can lead to harm or loss for their clients may need professional liability insurance.
*Shopify Capital loans must be paid in full within a maximum of 18 months, and two minimum payments apply within the first two six-month periods. The actual duration may be less than 18 months based on sales.
Registering your business can be daunting if you’ve never waded into the world of federal or state legal paperwork. Here’s how to get started:
Small business owners need a well-designed, memorable, and easy-to-navigate website. You don’t need to start from scratch—most website builders have specific templates and user-friendly editor tools. For example, Shopify’s Dawn theme is a fan favorite because of its simple, customizable layout and emphasis on visual storytelling.
After you select your hosting platform, register your domain name, and choose a template, create a basic landing page and add any relevant pages for your customers to browse, including:
A unified point-of-sale system, like Shopify POS, can make product sales, bookings, and deposits seamless for customers and easy for you to manage on the backend.
There are two main components to consider when setting your service pricing: your profit margin and your competition. You’ll typically need to set a price that generates a profit but is comparable to what similar services charge. Follow a pricing strategy that makes sense for your brand and target market—whether charging higher to communicate quality or lower to attract more price-conscious customers.
How you communicate your prices will depend on the type of service business you start. Some businesses, like consulting and law firms, disclose rates after an initial conversation with a potential client to better reflect a project’s scope and budget. Once your service business gains traction, the next challenge is figuring out how to scale your startup efficiently without compromising the quality that got you there. If your service is more straightforward (like an hourly or flat rate for landscaping projects, for example), consider including a price range directly on your website.
The cost of starting a service business depends on a few factors, like the kind of business you’re starting, your overhead, and any business management or business insurance costs. Registering a service business and building a website typically costs a few hundred dollars; registration fees vary by state.
Growing a service-based business requires an effective marketing strategy and strong customer relationships. A loyal (ideally repeat) customer base can provide positive reviews and word-of-mouth referrals.
The most profitable service business is typically competitively priced, with minimal time and overhead. For example, an executive coach or branding consultant can set prices based on their hard-won expertise or guidance and conduct meetings virtually, eliminating office or travel costs. Digital consultancies in general have the potential to be very profitable because they set their rates and can work with multiple clients at once.
Some service businesses are year-round, like marketing or graphic design work, while others are seasonal (think landscaping or tax prep). Past in-demand services have included data security, digital marketing, fitness coaching, and cleaning services.
You can start a service business that combines your passion and expertise. These qualities can set you apart in the marketplace, make it easier to attract loyal clientele, and generate steady business.
