Starting a Service-Based Business: What You Need to Know

Last Updated: 

May 9, 2024

Starting a service-based business can be fulfilling, but it's important to do your research first. To help you get started, we've put together this guide on the key steps to take when starting your own service-based business.

Key Takeaways on Starting a Service-Based Business

  1. Building a strong foundation: Establish a solid business plan, define your target audience, and identify your unique value proposition to stand out in the market.
  2. Understanding your customers: Conduct thorough market research to understand your customers' needs, preferences, and pain points to tailor your services accordingly.
  3. Defining your services: Clearly define the scope and specifications of the services you will offer to avoid confusion and set realistic expectations for your clients.
  4. Pricing strategies: Determine your pricing structure based on factors such as your costs, market competition, and perceived value, ensuring profitability while remaining competitive.
  5. Marketing and promotion: Develop a comprehensive marketing strategy to reach your target audience, utilising online and offline channels to create awareness and generate leads.
  6. Building a strong online presence: Create a professional website, leverage social media platforms, and engage in content marketing to establish credibility and attract potential clients.
  7. Providing exceptional customer service: Focus on delivering exceptional customer experiences, as positive word-of-mouth and client referrals can significantly contribute to the growth of your service-based business.
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Choose a service that you're passionate about

Choosing a service that you are passionate about is crucial when starting a service-based business. It's easy to get carried away by the excitement and allure of entrepreneurship, but if you lack genuine interest in your chosen service, it will inevitably reflect in your work ethic and the quality of your offerings.

To avoid overextending yourself, it is important to follow a few guidelines. Firstly, refrain from pursuing anything new unless it genuinely excites or interests you. If the available options within your industry seem uninspiring or mundane, consider exploring alternative areas where competition may be lower, but there is still a demand for innovation. Alternatively, you might even contemplate stepping away from traditional employment entirely, as being an entrepreneur does not necessarily imply being a business owner.

Remember, passion is the driving force behind success in service-based businesses. By aligning your interests with the services you provide, you can maintain a high level of motivation, deliver superior quality, and ultimately stand out from the competition.

Choose a service that meets people's needs

This is the most important step in starting your service business. If you don't know what people want or need, then there's a good chance that your business will fail.

There are many ways to find out what people want and need:

  • Ask them! Talk with friends and family members about their problems, then ask if they would be willing to pay someone else money for those services. The more people you talk with, the better idea of what others think about paying for services like yours will be formed in your mind.
  • Look at surveys conducted by other companies or government agencies; these surveys often include information about how much consumers would be willing to pay for certain types of products or services (especially if those products/services are considered luxury items).

Choose a service that's easy to learn

Choose a service that's easily learnable. When starting a business with the objective of making money, it's important to consider the time and effort required to master a particular skill. Opting for a service that takes months or even years to become proficient in can be counterproductive. Many individuals make the mistake of selecting overly challenging services as their initial foray into self-employment, which can hinder their progress.

However, prioritising an easily learnable service doesn't mean settling for an uninteresting job simply because it doesn't demand extensive training. Instead, explore how your passion can streamline the process and make it more engaging. For instance, if you have a love for dogs but dislike cleaning up after them (or vice versa), you can still offer dog walking services by hiring someone who enjoys both aspects.

By choosing a service that's relatively easy to learn, you can expedite your entry into self-employment while leveraging your passion to create a more fulfilling and rewarding business venture.

Choose a service that has flexible hours and locations

Consider selecting a service that offers flexible hours and locations. Flexibility in scheduling is crucial as it allows your business to operate beyond the limitations of standard business hours while ensuring that clients can reach out to you comfortably even outside those hours. For instance, you can explore business opportunities in the credit repair industry. Credit repair businesses can be operated from anywhere, whether it's a physical office or remotely from home. This flexibility can reduce overhead costs and allow you to scale the business as needed. Additionally, it's essential for customers to find it convenient (and safe) to meet with you at a suitable location.

Here are a few examples of services that typically offer flexible hours and locations:

  • Pet sitting/walking: By offering pet sitting or dog walking services, you can accommodate clients' varying schedules and meet their pet care needs at their preferred times and locations.
  • House cleaning: Providing house cleaning services allows you to arrange appointments that work best for both you and your clients, ensuring minimal disruption to their routines.
  • Errand running: As an errand runner, you can assist clients with various tasks such as grocery shopping, picking up prescriptions, or handling other errands. Offering flexible hours and locations allows you to accommodate their specific needs.
  • Lawn mowing: By providing lawn mowing services, you can adjust your schedule to fit the preferences of your clients, ensuring their lawns are well-maintained at their convenience.
  • Snow removal: Offering snow removal services during winter months allows you to be available at flexible hours to clear driveways, walkways, and other areas as needed, catering to your clients' schedules.

Find partners who can help grow your business

Finding partners is a great way to grow your business. You can find mentors, coaches, business partners and networks of fellow business owners through organisations like SCORE (Service Corps of Retired Executives) or BNI (Business Network International). You'll also want to look for other service providers who can refer customers to you. For example, if someone needs their roof repaired after a storm and they call an insurance adjuster who repairs roofs as part of their business, that person may be able to refer to them directly instead of sending them out into the world with no direction at all!

FAQs on starting a service-based business

Got questions about starting a service-based business? We've got you covered. Here are answers to some common queries that entrepreneurs often have when venturing into the world of service-oriented enterprises.

What are the key advantages of starting a service-based business?

  • Lower Capital Requirements: Starting a service-based business often requires less upfront capital compared to businesses focused on selling physical products. You can avoid the expenses associated with manufacturing, inventory, and storage, allowing you to get started with relatively minimal financial investment.
  • Focus on Service: Unlike product-based businesses, service-based businesses prioritise delivering excellent service rather than emphasising the specific tools or software used. For example, if you're providing accounting services, your expertise and quality of work matter more than the software you use. As long as you effectively track time and complete projects for your clients, the specific tools become secondary.
  • Reputation and Brand Recognition: Service-based businesses have the advantage of quickly building a reputation and brand recognition. By consistently providing exceptional service over time, you can establish yourself as an expert or go-to professional in your field. It's easier to become known as the best in your area when competition is not as readily apparent. Focus on delivering exceptional results, and as word spreads, you'll gain momentum and visibility in your industry.

How do I determine the right target market for my service offerings?

It can be difficult to determine who your target market is, especially if you haven't done any market research. The best way to do this is by asking yourself: Who will benefit most from my product or service? Who has the most money to spend on it? You'll also want to consider whether there are any barriers preventing them from purchasing what you're offering (for example, perhaps they don't know about it yet).

Keep in mind that your target market doesn't always have to be defined by demographics; sometimes it's better just knowing where people hang out online or which social media platforms they use regularly.

What should be included in a business plan for a service-based business?

A business plan is a road map for your business. It should include financial projections, marketing strategies and more.

In addition to these things, the plan should also include information about your target market and how you will reach them.

How can I price my services effectively to remain competitive yet profitable?

In order to price your services effectively, you need to know what it will take for you to remain competitive yet profitable.

To determine a realistic rate of pay for yourself and your business expenses, consider:

  • How much does the typical service provider charge for similar services?
  • What is the going rate in my area?
  • Will I be able to compete with other providers if I charge less than they do?

What are some effective marketing strategies for promoting a service-based business?

  • Word of mouth: Encourage satisfied customers to spread the word about your business. Positive recommendations from people who have experienced your service can be a powerful and free marketing tool. Provide excellent customer experiences to increase the likelihood of customers sharing their positive experiences with others.
  • Social media: Utilise social media platforms like Facebook and Twitter to connect with potential clients who may not be familiar with your services. These platforms are particularly effective for reaching millennials and Gen Zers. Share customer testimonials and reviews on social media to enhance brand awareness and attract new customers.
  • Customer referrals: Implement a customer referral program where existing customers are incentivised to refer others to your services. This benefits both the referrer, who may receive rewards or discounts, and the referred customer, who may also enjoy discounted rates. Referral programs can help expand your customer base by leveraging the networks of your existing satisfied customers.


Whether you're starting a service-based business or looking to expand one that already exists, it's important to do your research. The best way to do this is by talking with other business owners who have experience in the industry and getting feedback from potential customers on what they want and need. You should also consider whether there are any regulations that might affect your business model before committing too much time or money into an idea that may not work out after all!

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