Why you should consider starting a service business

Though we occasionally help merchandising businesses, we are specialist in setting up and advising service businesses

A service business is a commercial enterprise that provides work performed in an expert manner for the benefit of its customers. The typical service business provides intangible products, such as accounting, banking, consulting, cleaning, landscaping, education, insurance, and transportation services. If a physical product is transferred to the client or customer it may be required for successful delivery of the service. But, in many cases the delivery of services are not tied to the delivery of a physical product.

Unlike a merchandising business, the profits from a service business would be earned by the delivery of a service to the customer. There would be no transfer of a physical product to the customer in exchange for his money. Therefore, there is no requirement for the service business owner to tie up money in inventory for resale.

Service businesses typically cost less to start than manufacturing business that require expensive pieces of major equipment. Our suggestions for starting a manufacturing businesses includes companies that can be set up for minimal, typically one time cost, of minor equipment. Profits on the manufacturing businesses we suggest are typically earned on the sale of products you would manufacture. Even with the need for the one time cost of minor equipment, it is typically cheaper to establish a service business rather than a manufacturing business. However typically, when a discussion of manufacturing businesses is held, it is generally a discussion of a major manufacturer like an auto manufacturer. The Saafenet Corporation does not offer advice for major manufacturing companies.

Service businesses include the offer of both professional as well as non professional services. A partial list of professional services might include but not be limited to  accountancy, legal services, tax preparation, general construction contracting, extermination,radio broadcast and podcasts, home energy auditing and more. Non professional service would include but not be limited to landscaping , cleaning services, non-medical home health care, mobile car wash services and more.

Since accounting and the other professional service possibilities can offer an entrepreneur a high probability of success, they should  be considered, if you have the right training. If you have no training or experience in professional services, you may be able to offer a non professional service that you may be able to learn.  Non-professional  services may require a one time or occasional cost for minor equipment like a lawnmower, power washer or other minor equipment piece required for the delivery of non-professional services. Even barbers and cosmetologists need tools to do hair. But because they require substantial training and typically an examination to become licensed it’s debatable if they should be considered non-professional services. other service businesses allow the entrepreneur the possibility to get into business inexpensively.

Even in service businesses, you might face the high failure rate of most new businesses, if it’s improperly set up. Primary reasons for new business failures include:

    • insufficient funds to properly start one’s own business which could lead to borrowing and unnecessary debt in the future.
    • a failure to establish one’s self as an expert to promote interest.
  • an inability to prepare and properly update a business plan.
  • failure to adapt to changes in technology and remain current with best practices for starting a service business.
  • failure to project an image which can be branded

You may find solutions to these problems by:

  • Researching customer service requirements and finding a source of funding.

  • Only performing a service you know or can become better at, like things you currently do at work.
  • learning how to prepare a business plan.

  • keeping up with industry best practices.

    An aggressive approach would be time-consuming, and, require a lot of research. And a new business owner could still open without being fully prepared.

Up your business IQ

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