How to Scale Your Service Business
Here's the situation You have a service business. It has plateaued. You want to reach that next level of profitability.
Service businesses come with their own challenges to scaling. It's possible of course.
There are a few service businesses that are household names that come to mind, for example, Uber, AirBnb, and Amazon.
How do you get to scale? Whatever that means for you - 6-figures, 7-figures, heck 8-figures!
Here are 5 tips for making that happen (some will sound familiar as they are key to scaling any business!).
Drill Down on Your Niche
Both your ideal client and your superior offering.
You can't be everything to everyone. That holds true for all businesses; however, a service-based business often starts out as an exchange of time for money. As we all know too well, time is not infinite.
As your customer base builds, ask yourself what customers are the most profitable, cause the least friction (waste of time and energy!), and refer clients just like them (referral business is the best!)? Ok, then what distinguishes them from the rest? What characteristics define them as a group? Where did you find them? What was their pain point? What stage was the business?
Nail the offering. What is the most profitable problem you solve? Do you solve it better than anyone else? Do you truly have a unique way of delivering the outcome? What do you offer; what don't you offer? What is included in the service; what is not included?
We have all felt the pain of that last one. When we end up saying yes to an ever-growing list of client demands during a project and all of a sudden that retainer or project fee seems really cheap!
Hire the Right Team
As a service-based business your people are your product.
Be diligent in the hiring process. Do they have not only the expertise you need but the personality to deliver customer service (if they are client facing)? Will they uphold company values? Will they work well with other members of the team? Are they a culture fit?
As you scale and no longer have personal relationships with everyone on your team, you need to implement means of monitoring performance (not just numerical metrics - which actually can sometimes have the opposite impact).
Monitoring performance and giving feedback where there are gaps in performance can be accomplished with internal reviews, but even more importantly, by soliciting and listening to customer feedback. Customer feedback is critical to nailing your offerings, and it is equally valuable to understanding the outcome/impact your services had for your customer and the level of customer service they experienced.
Paying attention to performance leads me to another challenge, -- quality control.
Standardize Processes & Standards
If you want your people to execute at the level you expect and in the way you want it to be done; if you want to achieve consistency and quality, you need to standardize your processes and service standards.
And automate (which I just talked about last week).
Standardize and automate any repetitive process. Everything from sales, to client onboarding, delivery of services, client or vendor agreements, gathering feedback, etc.
What can customers expect - make a list? Create service standards around these expectations. Build a culture that supports these standards from how your team gets it done to how it is delievered to the customer.
Leverage technology. Think about Uber - technology drives their service and lets them scale to cities worldwide. How can a tech platform amplify the reach of, or streamline the execution of, your business? Maybe you create a proprietary communication platform for users to provide feedback or to build a community around your service.
Delegate (a favorite of mine for all Founders)
If it's a scalable business, it means you are replaceable (at least when it comes to delivering the services directlym not so much the leadership role). This is a challenge for most founders because it means you have to give up some control.
As we said, to make that possible you need a team that you believe will deliver the same quality of service and level of expertise. Or, as close as possible. Nobody will do it like you do it.
There is always that client that says I definitely want to sign on but only if you are my point person? Only if you are actively engaged.
Your role is to empower your team. They know the desired outcome, they know the service standards, they know the process. Let them go.
To encourage and support cross-functional collaboration. Exceptional service businesses create a seamless journey for their customers which means teamwork. From your initial sales conversations, to legal, to back office operations (billing, for example) to those actually doing the work and the account managers.
Productize
Even with large teams, you still need to leverage your time and your team's time.
This service-to-product model has been described as a business that starts out providing customized services and eventually draws on accumulated expertise to deliver packaged solutions that stand on their own.
How do you go from one-to-one to one-to-many? What can you packgae? What services do the majority of your customers want from you, or want repeatedly, and how can you deliver them as a package? How can you combine your services with other valuable, related services through a strategic partnership?
How can you move away from hourly based pricing to project or outcome-based pricing? What is the value of the service or solution to the customer? What are some tangible outcomes the customer can see and feel when they use your services?
For example, a coach can go from one-to-one, to group coaching, to online courses, to masterclasses for thousands, to writing and selling books, podcasts and beyond.
That's my vision!