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How to scale a service business (and get your life back!)

September 2, 2017 Melanie Hawken
business-growth.jpg

by Julia Pimsleur, author, speaker and coach, and the founder of Little Pim

You’ve probably heard the word on the street: investors typically have no interest in service businesses because they don’t scale easily. While scaling a service business comes with its own challenges, it’s not impossible. 

 

Sure enough, there are women-run service businesses that are making bank and paving the way for thousands of service businesses to scale up. There are many examples to choose from, but I’d like to highlight three businesses that have not only scaled, but show no signs of stopping!

Likeable Media, founded by Carrie Kerpen, is a social media and content marketing agency based in NYC. It’s one of the few social media agencies that has been able to scale. How? The team has developed a strong system and method of doing work that has allowed them to grow and train others. They call it the Likeable Content Cubed™ method. You can read more about it on their site, and see how they use their original system to not only execute high-quality work, but make themselves stand out.

Moxie Bookkeeping works with small businesses by helping them get their finances in order and taking accounting of busy entrepreneurs’ plates. Founder Ean Murphy started the agency in 2003 and one of the main ways she has been able to scale is by productizing the services Moxie offers. On their services page, you can see the different packages they offer for bookkeeping, consulting and coaching.

135th St Agency

Million Dollar Women Masterclass member Shante Bacon started 135th St Agency, an experiential marketing and strategic communications company, in 2005. She provides high-quality public relations services to actors, musicians and TV hosts. By taking the time to work ON her business by delegating, outsourcing and building her team, she has been able to work with a higher volume of clients and now has two bases for her company: New York City and Atlanta.

Aside from having successfully scaled their service businesses by productizing their services, using solid systems and delegating, these women all have else something in common. They took the leap from creating a job for themselves to creating a company.

The danger of the “self-employment trap” The “self-employment trap” is a very common pitfall for service providers. It’s when you’re working 80 hours a week working for your clients with no time to work on your business. The reality of the self-employment trap is that you’ve built a job, not a business. This trap is so common because, for service businesses, the owner is essential. If you feel like you’re currently in this situation, know you’re not alone. According to the Census Bureau, data shows that 88 percent of businesses require the owner to provide the primary service and be responsible for all the core functions, like managing finances, day-to-day business and everything in between. And women are overly represented in service businesses like marketing, accounting and coaching.

A company with an owner stuck in this trap is not investable. But I’m going to share in this post the four most important steps to scaling your service business so it can flourish without you doing the role of the bookkeeper, website developer, assistant and CEO.

Even if you own a company that isn’t service-based, you can still apply the steps below to scale your company too.

1. Create systems and processes

Creating systems and processes for repeatable knowledge is crucial to scaling a service business because it keeps work moving through your pipeline quickly. With a system, you’re more likely to have clearer communication with your client and your deliverables will be much more consistent. If you’re not already using them, I suggest using CRM like Salesforce, Hubspot or at the very least excel spreadsheets to keep track of your leads, clients and contacts. Another way having a set process can help you scale your business is being able to create room on your impossibly full plate by streamlining your work. If you want to learn more about that, I highly suggest reading (or rereading) E-Myth by Michael E. Gerber if you haven’t already. No matter what type of business you have, investors like to see concrete systems in place. They know how much good systems can allow a business to scale and grow quickly.

2. Become a Delegation Ninja

I talk about becoming a delegation ninja a lot because no matter what kind of business you have, outsourcing, hiring and delegating will allow your business to grow.

For a service business, I suggest starting with the tasks you’re not a pro at or don’t need to be doing, like accounting, setting up meetings or running your social media accounts to name a few. While the thought of handing off tasks and subsequently giving up control of certain aspects of your business probably makes your stomach churn, taking the leap is necessary. You may not find a contractor or employee who can get the job done as well as you can, but that’s why you must have refined systems and processes in place first and continue to improve upon them. It’s best to have a training process and manual in place before looking for people to hire. If you’re still in your first year of business and maybe don’t have the resources to hire employees or pay contractors, you can still automate many aspects of your business to become more efficient. There are many services you can use for accounting, invoices, CRM, social media management, scheduling meetings and more.

3. Separate sales from account management

Even if you don’t have a sales team yet, this is important to know for the future. When you have a sales team for your service business, they shouldn’t be responsible for managing accounts as well. Instead, the sales team should be entirely focused on new leads and your company’s sales cycle, which is what you hired them for in the first place! When your sales reps also have to manage accounts, their spit attention also causes the sales process to be much slower.

4. Turn your services into a product

Productizing your services is crucial to scaling up. If you think about it, any service you offer is a product. Your clients buy a result from you, whether you’re business coach or a web developer. Not sure which service to productize or even where to start? You’re essentially turning your services into packages. Consider what your customers are repeatedly asking for and where you make your highest margins. If you offer services outside of this specific, repeated request, then you may want to consider no longer offering those services and focusing on one type of customer with one specific problem.

Productizing a service means putting a system in place that makes it cheaper, faster, more scalable and more consistent. It also means that you can easily train your team to produce the work without any involvement from you! Can you imagine that?

One benefit of productizing your services is that it makes your sales cycle faster because you’d ideally make your prices for each service public on your website. While some leads might be scared away or disqualify themselves, the ones who are interested already know what it will cost them and are far more likely to become a customer.

Other tips to keep in mind when scaling a service business:

If you’re interested in fundraising for your business (and I hope that you are!) something to avoid is naming the business after yourself. It’s much harder to scale a business when the company name is attached to an individual. This makes investors think that if anything happens to you, they’re in trouble.

Another way to scale your service business is by creating online information products around your service, like an e-book or email course. This creates another stream of revenue for you from customers who may not be able to afford your premium services or just want a taste of what you can do. Chances are, they’ll come back for more.

Don’t be afraid to respectfully say “no” if your clients want to hire you for services outside of what you offer. This causes scope-creep and you want to avoid going down the rabbit hole of working on projects that take time away from your core service offering. This is why you productized your services in the first place!

By figuring out how to deliver a few services as “products” you can start scaling faster, and with the right systems, hustle and vision, one million in revenues will soon be within view!

Stay brave,

Julia


Julia-Pimsleur.jpg
Julia Pimsleur is on a mission to help one million women entrepreneurs get to $1M in revenues by 2020. Julia is an author, speaker and coach and the founder of Little Pim, one of the few women-run businesses backed by venture capital in the country. Little Pim is the leading system for introducing young children to a second language and has won 25 awards for its proprietary Entertainment Immersion Method®. Its products are sold in 22 countries. Julia has raised a combined $26 million in non-profit and for-profit dollars. She wrote “Million Dollar Women: The Essential Guide for Female Entrepreneurs Who Want to Go Big” to help women learn to raise capital and take their businesses further, faster.

 

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