10 Successful People Share Their Strategies for Leading a Service-Based Business
In the United States today, approximately three out of four jobs are service-based (as opposed to product-based). Authority Magazine recently started a new interview series called “5 Things You Need to Know to Create a Successful and Innovative Service-Based Business.”
How does one make their clients love them? How does one convey their values and purpose to their clients and employees? What are the hurdles that service-based businesses have that product-based business don’t? How does one scale as a service-based company? How does a service business brand and market itself?
We spoke to successful founders or CEOs of service-based companies who shared what one needs to be successful and innovative. Enjoy the 10 highlights below.
Horace Starr, VP at AT&T
- Change is constant and all around us. I learned early that life is full of change and it is all around us. Moving as much as we did when I was young helped me to develop the ability to cope with and accept change, see the positive in it and look for ways to learn from it.
- Taking smart risks is very important. Without taking the risk, you don’t know what is achievable, what can be learned from the experience and you stifle your creativity. Having the courage to try something, possibly succeed or fail and learn from the experience is invaluable.
- Don’t let others define you. I learned this lesson growing up in Hunters Point. I could have taken the path of least resistance that my friends and some of my family took. That road led to a life with limited opportunity and in many cases becoming a statistic. I learned that you must be responsible for your own growth, ask and receive feedback openly and take opportunities when they are presented. It is up to you how you benefit from the experience.
- Continuous learning is a requirement for growth. When I was young, my parents instilled the importance of education and the value of it in me. I have found that to be one of the most valuable lessons given to me. I strive to stay in a continuous learning mode in all I do, and I ask others to do the same. When we stop learning, we close ourselves off to possibilities and creativity and limit our impact. Continuous learning happens in a variety of ways, and we need to be open to receiving and using the teachings we receive.
- The words you speak have power. In the mid-eighties during a performance review given by my supervisor, I was told that I had the potential to become an area manager and possibly a director. I asked why not a vice president or even more than that. He responded that there weren’t many men of color in those positions and told me that they weren’t hiring in those positions either. I realized he saw the world in black and white and that he didn’t believe there was any room for change. This conversation sat with me in a way that he probably never intended, it gave me motivation. I didn’t want to be defined by others or held back, I was responsible for my growth and opportunities, and I needed to seek others who would help me in these areas. His words impacted me and drove me to reach for more.
- You must put in the work. Opportunities will come along, and when they do, you must work hard, you may have to make sacrifices, you must have integrity and you should always be authentic. Hard work matters, it teaches, exercise your creativity and gives you experience that will serve you well as you continue to take risks.
- Kindness matters. Expressions of kindness impact people and move all of us toward a greater good both inside the business and outside of it. I truly believe we can take smart risks, have open and honest conversations and achieve our goals while being kind to one another. Kindness isn’t weakness; it is a key to building relationships and instilling feelings of confidence and value, and provides people space to create, engage and achieve.
Antonia Hock, global head of The Ritz-Carlton Leadership Center
- Services are all about people — hire the right ones. It sounds simple, but so many people get this wrong every day. Service businesses are about people and their intellectual property, creativity and business acumen applied in the service of others. To build a phenomenal business, you must take the time to hire people who believe in the mission, are likable and have a passion for service. They must have the intellectual horsepower, work ethic and integrity to deliver at scale. Hiring the wrong people will destroy the business from the inside out.
- Be highly differentiated or perish. I see a lot of leaders who think that their business is special simply because they run them. In services, you must be ruthlessly honest about your position in the market. Are you offering a highly differentiated, important service that your clients cannot get from any other firm? Can you tell that story from a client point of view in less than 90 seconds? Be honest and think hard about the answers to those questions. If they aren’t clear, crisp and specific, you will struggle to survive.
- You and all employees are the brand — live it. In services, every interaction with a client, any public image and any interaction big or small demonstrates your brand value and image. You cannot have a bad day where you don’t show up on-point for what your brand stands for or what you deliver in the market. I see many firms that believe if they deliver in front of clients, that will be “enough,” but the culture of your firm, the way everyone conducts themselves day-in and day-out at every interaction, must be “on-brand.” You are your brand. Nothing will be stronger in the market than your constant conduct.
- Be visible, be humble and serve your employees. Leaders in any industry should be willing to do any job, roll up their sleeves and prove that they walk the walk. You must be visible, accessible and highly invested in your employees. As an example, our team knows that I am accessible 24/7 via text. If you are stranded in Marrakesh, and it’s 4am in my time zone, I will be on text ready to help. Also, be humble. The team is building client success project by project. They are doing some heavy lifting. You are there to support, clear the path, provide air cover and make sure everyone flies in formation. Always give the credit to your team for the work and be prepared to always take the body shots on their behalf. Finally, make sure that everyone in your business has what they need to grow, deliver and thrive. That extends beyond business basics. Do you know what they hope and dream of? Do you understand how they want to show up in the world? If not, it’s time to think about whether you really serve them as a leader.
- Operational excellence is mandatory. Services businesses thrive on operational efficiency and optimization. The systems, processes and infrastructure needed to run an effective business may not be glamorous, but they are a mandate to run a profitable services business. Invest in process optimization, and grow an operations team that is passionate about wringing any inefficiency out of the system.
Ryan McInnis, CEO of Picnic Tax
- Deliver great service, first and foremost. This may sound obvious, but happy customers are the only way to long-term success. Our best source of customers to date has been referrals from other happy clients.
- Be honest with your promises. At the end of the day, you can’t be all things to all people. What you want to avoid most of all is promising something to a customer that you can’t deliver. At Picnic, we don’t have the infrastructure to check every return and we don’t claim to do this, nor would it even be legal for us to do so, since we are a platform business. Clients who ask about this get an honest answer — we tell them that we connect them with high-quality accountants, but we are not ourselves a tax preparation service, so we can’t check the returns. We also point out the expertise and selectivity of our accountant network and provide details on the accountant vetting process. We’ve found that after explaining this, most people end up signing up for our service anyway. Customers appreciate honesty, and they will see right through any lies you tell them to win their business.
- Get to know your customers. This applies to all businesses, but it is particularly important in services businesses. If you take the time to get to know your customers, you can have honest conversations about what you’re doing right and what you could be doing to improve. Customer feedback is the most valuable currency in a services business, and the only way to get in-depth customer feedback is by spending time with and truly knowing as many of your customers as possible.
- Don’t prioritize growth at all costs. Try to focus on getting the product right before you move on to scaling it. It’s much better — for the business and for the consumers — to have a functional but small operation than to have a huge organization that isn’t functioning well. Don’t try to scale until you can do so without compromising on the quality of service. One of our competitors did this to disastrous effect and now has a long way to go to rebuild customer trust.
- Be humble. This relates to a number of the previous recommendations and is more of an overarching theme, but if you’re not humble, you’re not going to be able to listen and be receptive to what customers want. You have to know that you aren’t always going to have the answers, and you have to be constantly and eagerly seeking feedback, even if it is bad. At the end of the day, services businesses are serving their customers, not the other way around.
Kim Kim Kaupe, CEO, The Superfan Company
- Listen. You have two ears and one mouth for a reason. You are here to service your clients and customers the best you can. If they are offering you advice or feedback take it and thank them. It will only make you better!
- Get friends who will root you on. Whether they are fellow entrepreneurs or friends from high school get a solid pack around you that will pick you up on your lowest days. You need that inner circle you can all after a hard day and say “I need you to tell me I’m not a loser.”
- Get friends who will bring you back. When you ultimately become successful (because you will!) have a group of friends that will remind you of your intentions or values. Sometimes when success comes so many opportunities are at your feet that you want to jump on all of them. Have a group of friends that will question and say “While this opportunity sounds amazing how is that helping you achieve your goals?”
- Ask for help. My biggest regret is not asking for help sooner when I started my business. You will go faster the minute you start asking for help!
- Sleep and eat well. Think of yourself as an athlete. If Tom Brady ate McDonalds and got little sleep do you think he’d be playing in the Super Bowl? Definitely not. Think of yourself that same way. You want to show up as your best self to make sure the business and your team have a strong leader in place .
Zack Zalon, CEO of Super Hi-Fi
- Service-based businesses are hard, so you have to love it. When you’re supplying services of any kind, you don’t really own anything except your relationships, and you effectively start from zero every year. It can be so rewarding to help people to grow their businesses, to develop new products or new marketing strategies. Still at the end of the day, your customer is going to own every single thing you hand them, and all you’ll be left with is the feeling of accomplishment you’ve generated along the way. So yeah, you better really love your work, because there are lots of other ways to generate revenue that are more predictable, higher margin, and more scalable.
- You can go wide, or you can go deep, but you can’t do both, so choose wisely. As a service business, you can choose to service a wide variety of industries, but you’ll have to offer a very narrow set of services. Or, you can service a very specific industry and offer a much deeper set of options. As an example, let’s say you want to go wide, you want financial services customers plus health care, sports, and entertainment. That’s fine, but it will be next to impossible to win there unless your offering is extremely specific, something that works well across all of these industries, something very targeted like social media posting optimization. Alternatively, you can choose a very specific industry to service — the more specific, the better. Let’s say that you only service pharmaceutical companies. In this scenario, you can offer a much deeper set of offerings, perhaps marketing, website development, go-to-market strategy, industry-specific analytics. This second scenario is probably the better choice, it lets you focus and develop real expertise, but I’ve seen both work well.
- As the great David Baker once told me: With customers, you will always start as a Liberating Force, but you’ll always end as an Occupying Force. Whatever your service business, it’s unlikely you’ll avoid this, so go into every deal secure in the knowledge that at some point, your customer is going to want to end the relationship. If you keep this in mind going in, it’ll make it a lot easier to help your customer when the transition time comes, and you’ll make sure everything ends on a good note. I’ll share that almost all of our word of mouth recommendations were from former customers, so just because a business relationship ends doesn’t mean that there isn’t more business to be earned from that relationship over time.
- Try to stand for something specific and be yourself. There are a million services firms, the only real way to stand out is to stand apart. Analyze your purpose as a business and live it fully in every choice you make. Don’t try to be like everyone else, you’ll blend into the landscape. Be yourself, so that businesses think only of you when they have a problem that they’ll know only you can solve.
- Do your best work every time, and always try to make a difference. Marc Benioff, in his recent book, suggests that “innovation can’t advance in a positive direction unless it’s grounded in genuine and continued efforts to lift up all humanity.” I’d listen to him if I were you.
Alison Mountford, Founder & CEO, Ends+Stems
- Talk to your customers first. I learned this early on from a friend and mentor. You aren’t your target market so don’t waste money building something you want until you know if people will pay you for your product.
- Why you/why this business? This is classic business building advice and something that resonates with me. Anytime I feel like an underdog as a chef creating a technology based service, I remember that anyone can hire out for tech development, but the skills I have in the kitchen and experience with helping families decide what to eat have been learned overtime and can’t be googled or ripped off.
- Get started! I started out very small. I’d still consider my impact much smaller than I envision it being. That means there’s room to grow, which is great. You’ll never go anywhere if you don’t start.
- Find support. I’m a solo founder and it’s always frustrating when I see advice that says “Build a team.” I’ve come to realize this doesn’t have to mean pay 5 large salaries and have an office. For me, I have a team of volunteers, interns, and contractors who are experts in their field helping me grow. Also, having a personal support network of other founders is amazing. No one else can quite understand or support you in the same way as a peer.
- Provide value. Subscription customers will be with you for awhile, and will have to decide to purchase over and over. I work really hard to figure out how to continue increasing the value I provide and build a community around my business so that customers want to stay involved. You can’t “set it and forget it”.
Darrin Giglio, CEO of North American Investigations
- Passion. Without passion of wanting to wake up every day and give it your all, in my opinion, even if you are successful, you will not reach the potential of success you can experience. You need the fire in your belly. There is no better feeling, and it will translate to all the facets of your business.
- Be about the long term. Never be about the short-term money. Make decisions for the benefit of the customers, not your bottom line, giving them a reason to always come back to you or recommend you. With this, you will always be busy with work. Always offer exceptional customer service by alleviating any customer concerns or to offer reassurances they are your priority which they should be.
- Integrity. Simply be impeccable with your work, words and attitude. Do what you say you will do. As cliché as it is, treat people how you would like to be treated. Always put yourself in the customer’s shoes, how would you want to be dealt with as a customer. Be authentic, respectful and trustworthy and you will reap the rewards.
- Communication. Be accessible and as hands on as possible. Clients need to know you are on it. They usually want to communicate with you directly, have their questions answered clearly and in a timely fashion. Listen to your clients, make sure there is a clear understanding on both sides on all aspects of your business together, and never leave room for interpretation. Solve their problems and answer their questions and you are golden.
- Create Relationships. The more relationships you can build and network you grow, the more long-lasting your business will become. I have built a trusted network of Investigators, contacts and resources all over the world, which have immensely benefited my clients and my business.
Colleen Werner, founder of LulaFit
- You have to put your people first, above all else. If you care for your people, they will care for your customers. For me, this has been treating my team at LulaFit like a part of my own family. In fact, the name has caught on and now our entire team is lovingly referred to as the LulaFam.
- Let your team be in charge of their own lives and success. When you treat people like family, you stop trying to micromanage all of their time. For us, this has come out in ways like responsible time off and other cool perks, but the root of this is about trusting that people can prioritize what is important on their own. When they work for a company that connects with their own personal values and mission, they prioritize work. But sometimes, they need to prioritize themselves or their families and you just have to let that happen.
- Don’t look for VC money to start or save you. Most of my pure technology-founder friends find it quite shocking that I waited 4.5 years to raise my first round of outside capital. I think when you’re building a product, you absolutely need outside capital to get off the ground, but most service companies should be able to build revenue organically. Perhaps not as quickly, but organically. I would challenge any entrepreneur, but especially service-based company founders, to go through an exercise to try and figure out how to build the business without burning millions of dollars first.
- Because you’re going to treat your people well and not raise as much money as your SAAS friends, give your employees equity. Help them think like owners of the business by actually making them an owner of the business. I’ve heard so many people say that you’ll never find people who will work as hard or care as much as you do. I tell them they’ve never met my team. There is more than just financial incentives that can motivate people and I find that ownership is a strong one.
- If you’re a successful founder, the number one thing you’ll accomplish is getting yourself fired from every job at the company. You will hear a million times, it’s really tough to pass things off. Yes, it is. Who cares, just do it. And do it quickly. Focus on recruiting people who are better at you and then quickly fire yourself from that job. If a ball gets dropped (it is bound to at some point), trust that you can go back and address it then. But when scaling a company, there’s no time to try and stay possessive over every single thing.
Justin Goodbread, Heritage Investors
1. Find your vision. It doesn’t mean you have to know what the end of the vision looks like. You just have to get the vision, then have the ability to cast the vision with such fervor that others around you want to be a cog in your wheel. Once you do that, the wheel begins to turn, progress is made, and you’re going somewhere. I can remember telling our team, “Look, we’re going to have 50,000 viewers on the blog per month.” They thought it sounded impossible, but here we are today, and it happened. So you have to start with that vision.
2. Hire your opposite. No matter where you are in the business cycle, starting out, or a veteran of self-employment, you are continually trying to build a paradigm of personalities to balance out your entire organization. Use a behavioral profile test, such as a DISC profile, to build out a compatible team and help ensure your success.
For example, we have over a dozen employees in our organization, and I’ve hired every personality type there is. I’m a dominant personality (D), with leanings toward an influencer (I). My operations manager is somewhere between compliant © and supporter (S) and we complement each other. In the areas where I am weak, she has strengths and vice versa. Now, that’s not to say two Ds couldn’t work together. Because they could, but imagine the head butting that is likely going to take place. Therefore, knowing these personality and behavioral traits in advance can help you build your best team yet.
3. Partial out, meaning focus on your strengths and eliminate your weakness as much as possible. This idea goes back to hiring your opposite. My longtime friend and business partner, Jim DeTar, is the exact opposite of me. I’m incredibly detailed. He’s not. I’m introverted; he’s extroverted. I can’t tell you that many times we wanted to kill each other in the first couple of years of business. However, it became evident that we needed each other.
Yes, I was a value driver. I was the founder, I was the CEO, but I needed an individual who could keep me in check. Jim would often say, “Justin gets the clients, I keep the clients.” There ended up being a lot of truth in that statement. But as we grew and as we started hiring personnel around the company focusing on that paradigm of different personalities, what we found is, Justin gets clients, Jim keeps clients. Still, other individuals help us build out systems that keep the processes, thereby continuing to add value to our company.
4. Invest in yourself by investing in your business. Far too often, business owners take too much cash out of their companies. If you’re the founder and CEO, don’t pay yourself for a while or at least reduce your salary. Go back to your college days and learn how to eat ramen! Listen, leaders eat last, not first.
So many are not successful in businesses because they focus on cash in their pocket and not in their business, and it ends up being to the detriment of the business. The more you invest back into your company early on, the stronger your company will be long term.
There was a period of roughly three years when I didn’t get paid the rate I honestly should have. I mean, I didn’t even make enough to meet my family’s needs at that time, but and all my other team members did. I took care of my team paid them first, and now we are all reaping the benefits of that loyalty and leadership. I took the money I should have made redeployed it back in the business intending to grow the company. We have seen a 200% increase in just one year alone.
I also don’t believe in calling our team members, employees, or staff. Staph is an infection. Employee is a demeaning legal term. We have partners, and we have colleagues, we are on the same team, everybody moving in the same direction. So you as the CEO, you as the founder, your job is not to get out behind people and whip them, but to come alongside them, nature and build them up in a way that allows them to outgrow the position they currently hold.
5. Stay humble. You know to receive national press like Forbes and Investopedia, and other outlets say you are one of the best of the best, it can be really easy to sit back and say I did this. It was all me, but that would be the biggest lie of the century. So many people have sacrificed time and energy to help me achieve what I have. Team members have come alongside me and helped us grow this company. It’s not about you; it’s about the organization.
Many times I see young business owners start to talk about self. It’s I did this or I did that, I, I, I, and typically that’s when I see a business start to stagnate. Don’t fall into that trap. Stay humble.
Lynn Heublein, CEO of Skin Spirit
- Know what your clients want. Put yourself in their shoes and have a passion for the service so you can understand it better. I was getting some of the services we offered before I even started the company, and I still do today, and that helps put me in our client’s shoes.
- Happy staff is equal to happy clients. Services business are personal by their nature — everyone loves being around people with lots of energy and positivity. It is so important to create a happy climate for your staff to thrive.
- Your staff has to buy into your vision and share your values. We screen for this before someone even starts and have found that by being transparent about our expectations and standards, people who aren’t a good fit tend to self-select out.
- Don’t oversell — offer value and people will come. Our business is all about long term relationships, so we never oversell in the short run. We’d rather set our clients expectations and work hard to exceed them.
- In today’s market word of mouth, live and digital, is everything. We realize that the experience a client has with us during a treatment will live on as they share their opinion about us to their friends and family, and even online. We focus on making each experience with us exceptional so our clients can be our best advocates.