So, you’ve decided to start your own business. What now? When starting a service-based business it’s important to consider the varying factors that can determine the success and profitability of your business.
This can often feel overwhelming to new business owners. It’s easy to flounder and not know where to start. But don’t worry, we’re here to help.
We’ve compiled a list of some of the most important things you should consider before starting a service-based business.
10 Things You Should Consider When Starting a Service-Based Business
- Market Demand
- Competitive Landscape
- Cost of Entry
- Revenue Potential
- Personal Expertise
- Quality of Service
- Legal and Regulatory Compliance
- Marketing and Promotion
- Plan for Growth
1. Market Demand
Is there enough demand for the service you want to provide?
This is where research comes into play. Look up the area that you want to service and see how many other businesses are already providing that service in the area. Is there enough demand to warrant another business of this type?
If there is enough demand for that service, take a look at the existing businesses in the area that are providing that service. Is there a gap in the service already being provided that you could utilize in your own business?
Identifying a gap in the market or a unique selling point that you can capitalize on could be crucial for the success and longevity of your business.
2. Competitive Landscape
Identify your competition. What sets them apart? Conversely, what sets you apart?
Research your competitors to determine what their strengths and weaknesses are. What do they do well? What could they improve on?
How can you differentiate your business from theirs?
Take a look at the areas that your competitors are lacking in. Are any of these areas something that you could implement into your business as a strength?
Understanding your competition, and especially where your competition is lacking, can help put your business in a better position.
Understanding how you differ from the competition can also give you an edge in marketing yourself. Point out what you do well that your competitors lack.
Think about whether or not your business could be scaled up and grow in the future. Will you be able to expand your services or customer base? Perhaps you’ll be able to expand your service area.
Will you be able to automate certain processes and improve productivity to increase profits? Can you hire employees in the future?
Ensuring the growth potential of your business is the best way to ensure the long-term success of your business.
4. Cost of Entry
Evaluate the costs that will be required to start and run your business. These costs may vary greatly depending on the industry.
What costs will be associated with equipment, supplies, labor, marketing, and retail space?