How To Start a Service Business in 2021?

Selling the services is a straightforward task as anyone and everyone can handle it. Nowadays, everyone is qualified as they possess some skills or knowledge in any of the activities. If someone doesn’t have some specific skills, they need to pay for such a service.

The selling services business does not have any boundary. So, if you are planning to start your service-based business, then you have made the right choice. Just read this article as we have a complete guide on how to start a service business.

Take your valuable time to read the article and grab more understanding of service-based business. Shall we begin?

What is a Service Business?

A service business is an enterprise that offers professional support from a team of experts for delivering the best services to clients. Such a company does not include products as a physical one, but it’s helping third-party in different areas.

The service businesses are associated with physical activities, but with the invention of new technologies, services are now delivered in the form of web-based systems or mobile apps.

How to Start a Service-Based Business? – A Quick Guide

For starting a new service-based business, you, as business owners, need to take care of the following steps. Check these mentioned steps:

11 Steps to Start a Service-based Business

Step 1: Define Your Service Business Idea

The main step for starting a service-based business is to analyze and enlist the list of services you want to include in your industry.

Generally, there are a considerable number of services available in the market for service businesses. Some of them are:

  • Painter
  • Pest Control
  • Physiotherapy Service
  • Plumbing
  • Roofing
  • Snow Cleaning
  • SPA & Salon
  • HVAC
  • Landscaping & Lawn
  • Automotive
  • Beauty Service
  • Car wash service
  • Cleaning
  • Electric service
  • Fitness coaching

In the initial stage, the service entrepreneurs can use the core services mentioned above and start enhancing the business.

An alternate solution that entrepreneurs can invoke is to do market research on the local areas and grab the customer’s requirements. Based on the information collected, you can start your business by concentrating more on that service.

One of the facts is that there is no limitation on services you offer; the only thing that matters the most is that the services must impact your customer’s needs. So, take your mind to do detailed research on your idea to ensure a robust market.

Step 2: Decide on Pricing Structure For Your Services

The second step is to take a decision on the pricing structure for your services. This step requires a little bit of research and evaluation. The price you set for your services should be as per the industry standards.

If you set your pricing too low, then there are fewer chances of earning profits. On the other hand, if your pricing is high, then there are more chances of losing customers in the initial stage.

When you think about setting your price, you need to consider the location, competition, and expertise as a top priority. However, there are three essential categories that small business owners can make use of to price the service-based business.

  • Hourly-rate pricing: Freelancers and service-based businesses use this pricing model as more clients are adapting to it.
  • Package service pricing: A flat fee is charged from the customers for a specific task or service combinations.
  • Combination pricing: When customers are offered services at an hourly rate or as a part of a package.

Once you have identified the perfect strategy for your business, you need to select the pricing method.

Step 3: Selling Services Part-Time

If the business owners start selling the services on a part-time basis, there are more chances of risk elimination, and even you can limit the financial investment.

If you start selling the services part-time, there are more chances of enjoying self-employment and pursuing whatever you want. By gaining more experience in the field, you can easily transit to a new job giving more time to new business every week.

If you, as a business owner, start selling services part-time, then you can easily avail of the following advantages:

  • Grab earning as time goes on
  • Can easily avail the benefit of current health and employee benefits
  • Business development with a more extended period to make it a stable foundation

So, selling services part-time is an ideal choice for entrepreneurs if they have a primary goal to generate more revenue by paying down the mortgage, retirement savings, and even paying off credit cards they possess.

Step 4: Selling Services Full Time

This step is the best solution for an individual who is not having any running job or is entirely ready to become the business’s boss.

It’s the perfect choice for company owners to sell services full-time because they have full-time to perform market research and identify the industry trends and other business perspectives.

On an initial level, the business owners can start building an effective business and marketing plan for the service-based industry. They also need to include the essential financial resources or factors that are mandatory to start the business.

Risk is one of the most significant constraints that occurs by selling services full-time. In simple words, if the market is running successfully, and suddenly one of your employees resigns from the job. So, in that case, you lose the benefits of having qualified employees.

Step 5: Selling Services Seasonally

The third option that you can try is to make use of seasonal business selling services. It means that it can be operated with either a full- or part-time effort based on your client’s needs.

Many service business owners use full-time as there are more chances of earning revenues and higher profit margins. The businesses that run seasonally are quite obviously much better than other companies.

With this seasonal venture’s help, people grab an opportunity to generate more revenue in a year. It is possible by spending more time travelling, holding additional education, and even do the job in another season.

One of the most significant business owners’ opportunities is to earn a positive vibe of operating a business in a year.

The primary constraint for selling services seasonally is that you need to be ready to spend thousands of dollars and multiple hours in business promotion by closing your business in just half the year.

Step 6: Get Your Financials in Order

One of the most significant benefits of starting a service-based business is to deal with the management of the cash flow.

You need to perform proper market research to identify the exact amount you need for your business. Besides, you must be ready to deal with the following aspects:

  • Startup costs: You can quickly start your business with no money on hand, but if you have HVAC requirements, then you need some sort of money. So, it’s better to make a list of upfront expenses like insurance, office space, business vehicle, and purchasing essential equipment.
  • Equipment costs: Next, you need to identify the type of equipment you already have in your company. The advice is to make a proper spreadsheet of equipment that you have and need to purchase. So, it will be relatively easy for you to bifurcate the tools or equipment.

Apart from these costs, you need to identify the cost for yourself if you are operating your business alone. On the other hand, if you have a team of employees, you need to consider the employee costs.

Step 7: Perform the Business Registration

It’s a time for you to opt for doing some legal formalities by registering your business. This step is solely responsible for converting your business plan into reality.

You need to make sure that the checklist you create should contain all the essential metrics necessary for your business. Also, you need to be aware of keeping track of every step involved in your business plan.

The best idea is to keep all the critical information in one place, and even you can consult with an investor or auditor.

  • Register your business by providing the legal business name and business structure type
  • Provide a list of services and their associated pricing structure
  • Open a business bank account
  • Get an essential business license, whether it may be federal, state, or local
  • Acquire business insurance
  • Set up an accounting system

Step 8: Build Your Team

Starting a service-based business is not something easy that a single individual can do everything on their own. The legal advice that an entrepreneur needs to adopt is doing a strong partnership with multiple people or hiring employees to perform the job.

In simple words, you need to define your company expertise and do more research on the rest of the services you plan to include in the future.

By having a strong team in your business, you can quickly outsource the service calls to virtual assistants or consult the financial advisor or mentor to help you remain on the correct path.

When you write your business plan, do not forget to include the essential roles and responsibilities that your team must-have, whether it’s immediate or long-term hires.

Step 9: Learn How To Market Yourself

Now it’s high time for you to understand developing marketing strategies for enhancing your business productivity. So, you need to deal with the promotional activities and increase customer experience.

A repeat business plays a significant role in getting the first customer to your company for service businesses. To gain expertise in marketing strategies, you can start asking questions on different topics and analyze whether the customers are happy with your services or not.

You can even opt for referral programs where satisfied clients can share their experiences with the services. The customers you get during the initial stage are much more valuable for your business enhancement.

With this first customer’s help, the service business owners can get feedback, referrals and make their customers happier.

For marketing your service business, having an online presence and approaching a marketing agency is something that attracts your clients in the local area. You can also use social media platforms like Facebook Business Page, Instagram, and even Google my Business.

The only aim that a business owner possesses is that you have happy customers by sharing positive feedback and online reviews.

Step 10: Put Systems in Place

Consider the scenario that you want to run the business in your absence. So, it becomes quite complicated for you to allocate to someone who can manage the business operations smoothly.

You need to systematize your business by developing a system that will make every single business factor operate better, prevent costly mistakes, and allow you to generate more revenue by spending less effort.

So, it becomes a mandate for a business owner to define an operational system for a service-based business. A business owner can initiate by building a checklist that helps business when calls from a customer arrive.

When you plan to create a checklist, you can keep in mind the following metrics:

  • New requirements are fulfilled with a recent call or online service request
  • Acknowledgement for every immediate response with a quote
  • Perform job scheduling on the quote approval
  • Send invoice to the customers
  • Make an arrangement such that people will pay via cash, cheque, or online payment
  • Sending a follow-up email to everyone by requesting an online review or referral

Creating a checklist is a straightforward process that a new individual who joins new organizations can quickly adopt a business model.

Step 11: Continue Learning and Growing

One of the simplest ways to gain success is to start a service business. But what makes you more effective is to apply or stay focused on learning and growing from experiences you possess.

Whatever the service you offer, you must have high-quality skills to gain success in your business.  Some of the best skills are:

  • Perfect time management
  • Financial knowledge
  • A better way of communicating with customers
  • Building strong network
  • Leadership
  • A great source of hiring and training resources
  • Be best to work as per customer’s expectation
  • Sales and marketing strategy
  • Enhanced customer service skill
  • Team building and personal growth

You don’t need to have all the skills mentioned, but the main thing is that you must build a strong network around you to learn such skills and keep a growth mindset.

These were the essential steps that you can include in your planning to start your service-based business. Apart from these steps, there are some pros and cons of starting a business; we have included the list that will clear all your doubts.

You may also like to read:
How To Start a Cleaning Business in 2021?

The Pros and Cons of Starting a Service Business

The Pros

You can initiate with a minimum capital

For starting a service-based business, the business owners need to include the workforce and overhead costs. Such costs can easily be lower down if you manage to perform business operations using a staff time tracker.

One of the standard best practices that entrepreneurs can opt for is to start a single person and handle the whole company. They can generate more revenue by developing marketing strategies using websites, mobile apps, brochures and many more.

Once you sign your first customer, no one can stop you from earning positive cash flow.

The standard way of business

A service-based business typically follows the traditional way of performing business operations. With the help of this business, create new pathways with the services.

Every day comes with a new opportunity

You often have different clients daily, and you need to be ready to adopt the routine changes. So, you can easily focus on similar things every day.

This work nature is very suitable for those who tend to bore easily and like switching things up every once in a while.

It includes concurrent market

The business owners are aware of the recent trends and eventually grab the target audience more smoothly based on the detailed analysis and research.

In this tough competition, the owners can quickly highlight their services to the customers by following the correct marketing strategies and brand awareness.

The Cons

Hard to scale

If you are a service provider that provides an hourly-charge basis, then the revenue you again for your service will be directly affected by billable hours. So, in that case, you’ll be requiring more people to deliver the services and enhancing your business.

Limited creativity

Using service-based business, you are limited to provide your skillset as per the customer’s needs. The service providers can just advise the customers with the correct directions to follow, and it’s a common fact that you are only a replacement for someone.

Time loss in communication

One of the most significant constraints in starting a service-based business is to manage multiple clients, service calls, emails, and other various communication ways. It is time-consuming and most expensive.

Low revenue

On an initial level, you and your employees receive low payment as it is entirely dependent on other milestones and deliverables. To get rid of this, you must build robust and steady contracts to generate more revenue.


On average, many microbusinesses will cost around $3,000 on the initial level to start. However, if you consider home-based franchises, then the costs range from $2,000 to $5,000.

To grow a service-based business, you need to take care of the following things:

  • Find the time
  • Invest more in time
  • Do a perfect planning
  • Enhance sales and marketing strategies
  • Build a strong relationship with customers
  • Keep it simple


So, starting a service-based business is a simple task for anyone and everyone.

You just need to have the perfect planning of the expert services you offer to the clients. We have seen the essential steps that will help you to start a new business from scratch.

Take your valuable time to view the complete details on a service-based business and enhance your business productivity and customer experience to a great extent.

In case, if you are worried that how you will manage your entire service-based business manually, then we can help you to automate the daily operations through service-based software. How? Just get in touch with us through our contact us form and we will guide you further.