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How to start a service business in 8 successful steps

How to start a service business

At its core, a business is only as strong as the relationships it builds with its customers. This is especially true if you’re starting a service business and want to set yourself up for success.

First and foremost, you’ll need to prioritize your audience’s wants or needs. Once you nail this, you can begin shaping the essential components of your venture, from the types of services you’ll offer to your business website.

To make an impactful entrepreneurial debut, take a look at this comprehensive guide on how to start a service business (and check out some service business examples). From refining your business idea to registering your business and learning how to make money online, these eight steps will help you build a strong foundation for your company.

What is a service business and why should you start one?

A service business is a type of business that provides services to customers over physical goods. These services cover a wide range of industries and activities, from professional services like consulting and legal advice to more personal services such as catering, cleaning and hairdressing.

Starting a service business is a popular choice for many small business owners because generally they require less startup capital and investment than other types of businesses. Depending on the service, they're often in high demand and provide services people always need - like hair cuts, or car servicing. They also can be started small and then scaled to meet demand and your business capabilities.

How to start a service business in 8 steps

01. Refine your business idea

With so many service business ideas to choose from (as well as types of businesses to choose from), you’ll want to settle on one that offers something people are actually looking for. This requires you to do your homework and ask around to see if there is a demand for your service idea in the marketplace. Survey relatives, friends or community members who fit your ideal client’s persona, and use this information to determine what your audience wants.

Let’s say you’re interested in becoming a professional organizer. Start by defining the different areas of your industry. You can do everything from simple closet and pantry organization to specialized services, like working with seniors. Whichever niche you choose, customize your offerings so that you can better meet the needs of your target audience. This will not only pique their interest in your service, but will also show them that your business is genuinely invested in solving their issues.

During this market research phase, it’s also important to check out your competitors. Find out what their strengths and weaknesses are by performing a SWOT analysis, and consider how you might offer better services. Brainstorm different ways you can further capitalize on your skill sets in order to find new opportunities that’ll help you stand out from competitors.

how to start a service business - choose a business ideas

Going back to the example of a professional organizer, compare what is already known about your target audience and how others are currently servicing them. Ask yourself, “Are people hiring professional organizers also looking for someone who can advise them over time and prevent clutter?” In that case, you might want to consider adding consultation services to fortify your list of offerings. Or, if you decide you want these sessions to serve as the core of your business, learn how to start a consulting business here.

Looking for more service business ideas and how to get about starting them? Check out:

02. Create a service website

Starting a business means that you are the product. Unlike an item on a shelf, that’s not always easy for others to conceptualize. Rather, the best way to highlight the value of your skills is to create a service website that explains what you offer and also helps establish your credibility. Whether you are creating a hotel website, a health and wellness website, or a salon website, it's vital that you have an online presence.

First, you’ll need to choose a website builder that offers many ways to customize your site and handle all your business needs. Among the options out there, Wix offers an array of inspiring and highly effective business website templates. For sites like this list of best hotel websites, advanced web tools like an online scheduling software are ideal to accept bookings, payments and send invoices directly from your site (see best scheduling software to learn more).

how to start a service business - scheduling, booking in your website builder

Second, you’ll need to get a hosting plan to make your site live and domain name, also known as your online address. Wix’s free website hosting is secure and provides large storage space that keeps your site up and running. For your domain name, you can use your business name, which falls in line with best practices to better branding.

Something else you can do to position yourself well in your field is to make sure you have a logo that represents your brand and attracts new customers. Use an industry-specific logo maker to give you inspiration and to help you create your own. For example, if you're a cleaning service, try using a Cleaning Logo Maker.

How to create a service website

03. Write a business plan

To plan or not to plan? Apparently, that’s no longer the right question to ask. According to an academic study, entrepreneurs who formulate a plan are most likely to achieve “venture viability” over those who don’t. That’s because planning helps you focus on the important aspects of starting a business. It can transform your vision into a series of actionable steps toward organization, innovation and growth. Bottom line: “It pays to plan.”

start a service business - business plan

Make your ideas as precise as possible by creating a written business plan. This is a document that lays out the purpose, operation, finances, management and future revenue projections of your venture. To facilitate this process, begin by downloading our business plan template. Then, follow the steps outlined in the document, and remember that you can always revise your plan later. The important thing is to have something to work with now. By the end of the exercise, you should be more confident about the professional direction you’re taking.

04. Organize your finances

A main reason that people decide to start a service business is the relatively low overhead costs of running one. That said, you’ll need to have a clear understanding of how much does it cost to start a business and get your business off the ground. In turn, this information will help you determine whether you’ll want to apply for a loan, find an investor or set up using your savings alone.

Depending on the service, you might need to buy special equipment. For example, if you’re providing cleaning services, there is a wide spectrum of tools, from rubber gloves and cleaning supplies to vacuum cleaners, that you must own before you start taking jobs. These are examples of sunk cost, which means the money spent will not be regained. Create a price list of all necessary items so that you can track every anticipated expense along the way. This will also help you determine how to price your services. Think of it this way: You want your business to operate on a cash flow, not have to survive on one. Otherwise, those startup funds will dry up before you generate revenue.

05. Register your business

By making your service business official, you become entitled to personal liability protection, legal and trademark protection and tax benefits. You can open a business bank account, which is a great way to separate your personal activities from your professional ones. The advantages are multifold. Registering your business also qualifies you for business credit cards and small business loans. Lenders and investors must see proof that your business is properly registered in order to approve you for a loan.

In the US, all registered businesses must have an Employer Identifying Number (EIN) with the Internal Revenue Service. This establishes that your business is paying taxes and legitimizes it as a legal operation. You’ll also need that tax ID number to hire employees once you scale your venture.

how to start a service business - register a business

If your business is located outside of the US, it’s crucial that you read about the different rules and regulations for registering a business in that country. Check in with the relevant government agency websites for additional information.

06. Develop a pricing plan

Setting prices for your business can be hard, whether you need to determine your restaurant menu pricing or cleaning service costs. They can’t be too high or too low. In either case, you could miss out on important sales or revenue. Yet, with the right strategy, you’ll be able to design a pricing plan that can maximize profits for your business while considering consumer demand.

Here are some types of pricing strategies you can use for your service business:

  • Hourly rate: This is one of the most widely used forms of pricing. Take the example of Acupuncture with Fabi, which offers different treatments, all priced by the hour. It also creates an inclusive atmosphere for every budget out there.

  • Package pricing: Likened to charging a flat fee, this option lets you bundle two or more complementary services. It’s a great way to introduce your clients to a few of your offerings at once.

  • Value-based pricing: This pricing model is based on the customers’ perceived value of the service and how much they are willing to pay for it. The advantage of this strategy is that you can command higher price points depending on whether your service is viewed as specialized or prestigious, such as a certified fitness trainer or professional consultant.

Pricing plans

07. Level up your business skills

You might have guessed that it’s never been easier to start a service business. This is great news for you, but it also means that there’s a lot of competition within the service industry. One way to stand out from the crowd is by educating yourself about business management and strategy.

There are a number of skills you’ll need to acquire to stay competitive and relevant, whether you have a tourism website or healthcare website. For example, you will need to become financially literate, act like a leader, master community building and learn how to hire and train others, most of which comes with work experience over time. That said, you can pick up some essential business skills now by enrolling in an online course on Udemy or Coursera. Specially, service providers are investing in excellent customer service more than ever before. This is because consumers also play an integral role in the production of your business. You’ve got to actively listen to your customers and ask them how you can better serve them. Master the art of communication.

08. Promote your business

Prospective customers need to resonate with you in order for you to reel them in and become repeat customers. To gain new customers and build deeper relationships with your audience, find ways to engage them on your website and social media pages. Here are some ways to promote your business and get people to buy:

  • Email marketing: From your website, you can access professional email marketing tools that help you build and maintain awareness of your brand. For example, a new restaurant may want to take advantage of restaurant email marketing to promote itself. You’ll be able to create customizable email marketing campaigns and newsletters, which in turn can drive traffic to your site. You’ll also be able to grow an email list as you collect more potential clients via compelling calls-to-action and email signups on your website.

  • Social media marketing: On social networks, like Facebook, LinkedIn or Instagram, you’ll want to craft shareable content that will market your service. For instance, if you’re targeting parents for your home organizing business, you can reveal valuable information that appeals to them, such as some of your best tips to storing Legos. If you're opening a restaurant, be sure to invest in restaurant social media marketing, particularly Instagram, which is an incredibly useful tool for restaurant promotion. In fact, almost 50% of diners claim they visit a new restaurant after seeing it pop up on their feed. Another way you can encourage people to share your content is by inspiring them. Here’s your chance to tell your unique story, like how serving others in your community has left a positive impact in their lives and yours.

Promote your business website

Types of service businesses to start

The main types include:

Professional services

  • Legal services

  • Accounting and financial consulting

  • Management consulting

  • Marketing agencies

  • IT support and software development

how to start a service business - consulting

Personal services

  • Hair salons and barbershops

  • Fitness training and coaching

  • Childcare services

  • Elderly care services

  • Pet care and grooming

starting a service business, personal, hair salon

Home and maintenance services

  • Cleaning services

  • Landscaping and gardening

  • Handyman services

  • Plumbing and electrical services

how to start a service business - maintenance

Creative services

  • Photography and videography

  • Graphic design

  • Writing and editing

  • Event planning

start a service business, types, creative

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