One of the biggest problems with small service-based businesses is that success relies heavily on the skills, talents and time of just one person. For product-based businesses, making more money is simpler, and these businesses can grow easily by exporting or expanding. But if you run a service-based business, you really can only work a certain number of hours per week, and realistically there is only so much you can charge per hour or per job before you price yourself out of the market.
This means that your service-based business has a limit on how much money it can make, and you may not be able to make as much as you need. So, how can you make your service-based business stand out and make more? The good news is you may be able to change the way you generate income so that the profits of your service-based business (and your salary) no longer depend on you alone.
Add to your product offering
There is no rule that says a small business has to sell products or provide services. And actually, it makes sense for many small businesses to sell goods that complement the existing services they offer. Think about the hairdressers who sell everyday hair care products or the vet who sells pet food. The important thing is to make sure that the goods you sell work well with the services you are offering. This will ensure a seamless sale and a strong brand extension.
Recruit and train
Logically, one person can only generate a certain income, but many people working together can make a lot more. By training others in your service offering you can set up a very lucrative income model. If you are a plumber, for example, you could hire other plumbers to service more clients in the same hour.
Change your market appeal
Think carefully about the market you service and understand if there is an opportunity to pivot. You might just be able to change your way of making money by shifting up to a higher price point. Don't just think in terms of a business-to-customer model; also think about switching to a business-to-business model. This may be easier as you will be dealing with a different type of customer who understands your worth and your pricing.
Put yourself in a new box
Just like markets have different price points for the same service at different levels, so do occupations. Who would you rather be: a public defender who doesn't get paid much or a famous defence lawyer with a high hourly billing? Repackaging yourself can make a marked difference in perception and your bottom line. In this way the personal shopper can become a stylist, the masseuse can become a massage therapist, and the writer can become a content creator. Titles really matter when it comes to fees and the higher the perception of your skills the more you can charge.
Sell both the service and the maintenance
Consider ways of getting customers to use you on an ongoing basis rather than just once off. For example, if you are a web creator, instead of just making a website once-off for someone, you could package a monthly fee to keep it updated on an ongoing basis. By creating a useful maintenance program that eases your customer’s current or future burdens, you will have an easy sell on your hands.
Sign up for a franchise
Franchising can make you a lot of money if you run a great business that can be copied so that other people can enjoy the same success. Find out more about franchising to see if it's a good idea for your business. When you sell a franchise, you're really selling your business system, and not all businesses are good options. Test this option by opening a second branch yourself and make sure your business plan works well before taking it to the next level.
The bottom line
You don't have to settle for a lower income just because you are bound to an hourly rate and are short of time. Businesses that sell services can make just as much money as those that sell products. All you have to do is figure out how to change your revenue plan, repackage your offering and ultimately break through the profit ceiling. To grow your small service-based business in the next 48 hours, contact Merchant Capital today.