Why should you start a service-based business?
People tend to think that in order to start a successful business, they need to come up with a billion-dollar tech business idea like Facebook or Amazon.
Actually, it’s VERY hard to come up with that type of business. And even harder to succeed in the tech startup world. Research shows that 75% of venture-backed startups fail.
A business with a much higher likelihood of success that you can start today (without any venture capital or even a lot of startup money)?
Simple: A service business.
And what is it?
A business where you sell a service of some kind.
For example, that’s exactly what my student Ruby Le does. She’s a relationship coach who uses her work experience at eHarmony and It’s Just Lunch to help high-quality men attract more dates.
Service businesses have three clear benefits:
#1. High profits
You sell your own skills and talents so the only person you need in your business is yourself. And you can do it from anywhere- even your kitchen table. That means low overhead costs and high profits.
#2. Premium prices
Specialized services are considered high-value so you can sell your services at a premium price. For example, here’s what your business could look like:
#3. You can start right away
You can (and should) use an existing skill so you can get started right now. In fact, I recommend that you read through the list of business ideas here below, come up with an idea for yourself (and let us know your idea in the comments!) and get started building your business. Yes, it’s that simple.
But first, let’s look at what business you should start and why.
How do you come up with a profitable service business idea?
Look:
Coming up with a business idea doesn’t have to be hard.
The secret to building a profitable business is not about coming up with a revolutionary and market-transforming idea.
Nope. In fact, it’s MUCH simpler.
You already possess the foundations for a great business because you have experiences and skills that you are already selling.
Wait… what? Yes, if you have a job, your employer is already paying you for your services.
And you have even more skills that people can’t wait to pay you for.
Look at your existing skills and experiences to see what business you can start:
- Professional skills (your 9-5) – Sales skills, technical skills, marketing skills
- Other skills (hobbies, interests) – Dancing, languages, fitness
- Education (college degrees, courses)
- Challenges you’ve overcome – Getting more confident, learning how to speak in front of others
Here’s how to figure out if your idea is the right one:
Confirm that your idea is profitable
First:
Not all businesses are equally profitable. As an entrepreneur, you need to first figure out if there’s a market for your idea- so, if people are willing to pay for your services.
Here’s how to do just that:
Ability and willingness to pay
Do your clients have the ability and willingness to pay?
For example, if you sell a service to college students, there’s a risk that they won’t have the ability to pay even if they WANT your service.
And even if people have the ability to pay, they don’t necessarily want a specific service. For example, how many would be willing to pay a premium price to learn how to clean properly? Probably not that many.
Market size
Next, you need to understand the size of your market.
So, what services are in high demand?
If your market is too small, there simply won’t be enough demand for your services.
At the same time, a bigger market with lots of people who’re willing to pay for your services translates into a profitable business.
