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Starting a Service Business You have skills, knowledge and experience. Here's how to turn those assets into a thriving business.

By James Stephenson

Opinions expressed by Entrepreneur contributors are their own.

Editor's note: This article was excerpted from 202 Services You Can Sell for Big Profits.

Who can sell a service? The answer is simple--anyone and everyone. Everyone is qualified because each of us has skills, knowledge or experience that other people are willing to pay for in the form of a service; or they're willing to pay you to teach them your specific skill or knowledge. Selling services knows no boundaries--anyone with a need or desire to earn extra money, work from home, or start and operate a full-time business can sell a service, regardless of age, business experience, education or current financial resources.

What Are the Advantages of Selling Services?

There are many advantages associated with starting your own business selling services. Perhaps the biggest advantage is you become your own boss, take control of your future, and in effect become the master of your destiny. I've been self-employed for a number of years, and for me the lure of self-employment is the freedom and independence that calling the shots affords, which can be difficult to achieve when you work for others.

Operating your own business also gives you the potential to earn more money, in some instances two, five or even ten times more than you're currently earning. Why? Simple duplication. When you work for someone else, there is only you and only so many hours in the day to work for an hourly wage or a salary. When you operate a business, you can duplicate yourself by hiring employees and salespeople to increase revenues; you can duplicate your customers and find more just like them to purchase your services; and you can duplicate your business model and open in new geographical areas to service more customers and earn more profit. These are all things you can't do when you work for others, and if you do, chances are it will financially benefit the boss a lot more than you.

Capitalize on Your Skills

Don' t worry if you lack business skills and experience in areas such as time management, personal-contact selling, negotiating, bookkeeping and the ability to create effective advertisements. There's no question these are all important skills to have, but at the same time they're also skills that with practice can be learned and mastered. More important is the question, "What skill(s) do you have that can be sold as a service?" Any skill(s) you possess can be your best, and by far your most marketable, asset. If you know how to safely walk a dog, that's a skill people are willing to pay you for. If you know how to plan and throw one heck of a party, that's also a skill people are willing to pay you for as their event and party planner. If you know how to play the piano, this is a skill other people will pay you to teach them. If you know how to sell products and services online, once again that's a skill that people are willing to pay you for as an online marketing consultant. All are examples of skills that people pay other people to perform, or teach them how to learn.

Every person has one or more skills other people are prepared to pay for in the form of a service provided to them, or to learn. However, with that said, most people have a tendency to underestimate the true value of their skill sets and experiences. You have to remember, what may come naturally to you may not come so naturally to others. Likewise, you might think your particular knowledge or expertise may be of little value, but if someone else needs or wants to learn about that knowledge, it's very valuable to them.

Selling Services Part Time

The first option is to start off selling your services on a part-time basis, which is a good idea because it enables you to eliminate risk by limiting your financial investment. It allows you to test the waters to make sure that being self-employed is something you enjoy and want to pursue. If all goes well, you may decide to transition from your current job, devoting more time to your new enterprise each week, all the while decreasing the time at your current job until you're working at your new business on a full-time basis. There are many advantages to starting off part-time, including keeping income rolling in, taking advantage of any current health and employee benefits, and building your business over a longer period of time, which generally gives it a more stable foundation. If it turns out you're not the type of person who's comfortable being the boss, you've risked little and still have the security of your job.

Of course, if your ambitions are only to generate extra money to pay down the mortgage, save for retirement, put yourself through school, or pay off credit cards, selling services part-time is the perfect choice. It's important to do what you want to do and what best suits your individual needs. If selling services part-time works for you, then go for it.

Selling Services Full Time

You can also jump in with both feet and start your new business selling services full-time. This option would appeal to people without a current job or people who are confident about being the boss and operating a business. There's nothing wrong with starting off full-time, especially if you take the time required to research the business, industry and marketplace. You must also develop a business and marketing plan, and have the necessary financial resources to start the business and pay yourself until it becomes profitable.

The main downside to starting full time is risk. If you jump ship and leave your job, you risk loss of current employee benefits and have no guarantee of steady income, contributing spouses or partners excluded. The upside to starting off full-time is potential rewards, including the opportunity to make more money than you can at your current job, and to gain control of your future. Your decision to operate your new business on a full-time basis will largely be determined by your current financial situation, your own risk-reward assessment, and your goals and objectives for the future. Jumping in full-time will appeal to the true entrepreneurial mindset--people who prefer to blaze the trail rather than follow behind in the wagon train.

Selling Services Seasonally

Another option is to start a seasonal business selling services, which can be operated with a full- or part-time effort. But most are run full time to maximize revenues and profits over a normally short time span. Examples of seasonal businesses selling services would include snow removal in winter, yard maintenance in summer in northern climates, income tax preparation service in spring, and serving as a vacation property rental agent. Just about any business can be run seasonally or occasionally, but some are obviously better suited than others.

A seasonal venture will appeal to people who want the ability to earn enough money during part of the year in order to do as they please with the remainder of the year--travel, pursue education, or work a job in another season. The potential to earn a very good living operating a business only part of the year is a genuine opportunity, as proven by the thousands of people who are currently doing it. The main downside to a seasonal business, especially one that can be operated year-round, is that you don't want to spend thousands of dollars and hundreds of hours promoting your business only to shut it down for half the year, sending current and potential customers running to your competitors while your business is closed. It may prove very difficult to lure them back when you reopen for business.

Selling Services to Supplement Your Retirement

The fourth option is to sell services to supplement your retirement income or just to have fun and stay active in your golden years. Retirement businesses have become extremely popular in the past decade, mainly because the cost of living has dramatically increased, often outpacing wages and retirement savings. The result is that many people head into retirement needing a little extra income to cover expenses and provide an adequate lifestyle or to maintain their pre-retirement lifestyle.

People are living longer and much healthier now than in decades past, and because of this many are seeking new challenges; starting and operating a business is a way to stay active physically and mentally. Older people also have a proverbial ace up their sleeves when it comes to starting a business and selling services: a lifetime of knowledge and experience that can only be acquired by spending lots of time on this planet. Because of the value of these skills, many people are willing to pay big bucks for them. This is why many people who are reaching or have reached retirement age have chosen to start a consulting business selling their experiences, knowledge and skills for the benefit of their clients.

Financial Compatibility

Before you decide to get into business for yourself sellingservices, there are two issues to consider regarding financialcompatibility--income and investment money. First, when decidingwhat type of service to sell, you have to consider how much moneyyou want to earn and how much money you need to earn. If you needto earn $75,000 per year to pay your personal expenses, there islittle sense in starting a dog-walking service. Perhaps there are afew dog walkers earning this much, but it's not a realisticexpectation. How much money do you want to earn--that is, howambitious are you? Again, you must be realistic and relatively surethe service you choose to sell has the potential to generate enoughincome to live on in the short-term, and the potential to matchyour income goals in the longer term. Income doesn't have tofactor into the business startup equation for everyone. If you wantand need to earn only a little money from a part-time or retirementbusiness, the income equation will not factor as heavily as otherissues.

The second big financial compatibility issue affecting yourdecision about which business to start or purchase is the amount ofmoney needed to start or purchase the business. Not only will youneed to have or have access to the investment needed to getrolling, but you'll also need extra money for working capitalto cover day-to-day operating expenses until the business achievespositive cash flow. This can take a week, a month or even ayear.

Ultimately, financial compatibility is important when starting abusiness and deciding what services to sell. If you cannot affordto start the business and don't have the financial resources topay operating expenses and your wages until the business can breakeven, you'll probably have to look at alternative options, suchas starting part time, choosing a different business to start, orwaiting until you have acquired the money needed to getstarted.

Finding a Good Match

You also must be well suited to start and operate the businessand services you're considering providing. You and yourbusiness must be a good match. You may have an interest and evenexperience in a specific business or in providing a specificservice, but that doesn't necessarily make it a good match.Here are a few points to consider when determining a good businessmatch.

  • Do you have the financial resources to start or purchase thebusiness, and enough money to pay the day-to-day operating expensesuntil the business breaks even and is profitable? If not, it'sprobably not a good match, and you should consideralternatives.
  • Does the business have the potential to generate the income youneed to pay your personal expenses, and does it also have thepotential to generate the income you want to earn? This is veryimportant because if you can't pay your own personal bills,you'll soon be in trouble. And if, over time, you can'tearn the income you want to earn, you'll lose interest in thebusiness--a recipe for disaster.
  • Are you physically healthy enough to handle the physicalstrains of starting and running the business? If not, you may endup having to hire people for the job, which can be problematic ifthe business revenues aren't there to support both managementand employee wages.
  • Do you have experience in this type of business or service, anddo you have any special skills that can be utilized in thebusiness? You can gain experience and knowledge on the job butskills that can be utilized and capitalized upon right away areextremely valuable.
  • Are there any special certificates or educational requirementsto start and operate the business, and are these readily available?Find out the upfront costs associated with these, how they can beobtained, and the time frame needed to obtain specificcertificates. Training and certification shouldn't be viewednegatively because often the return on time and investment issubstantially rewarded financially. Anything worth doing is worthdoing well.
  • Will you enjoy operating the business, and does it match yourpersonality type and level of maturity? This is very important. Ifyou don't think that you would enjoy it, then don't start.Again, the loss of interest in a business is almost certainly thekiss of death. You can't stay motivated and rise to newchallenges if you don't like what you're doing.

James Stephenson invests his fifteen years of small business,marketing and sales experience into his books. He has started andoperated numerous successful homebased businesses, and is author ofthe highly acclaimed books UltimateStart-Up Directoryand UltimateSmall Business Marketing Guideas well as the 202 Series. James operates Stephenson & Stephenson, aconsulting firm providing small business owners with creative,results-based marketing solutions.

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