Home How To Scale A Service-Based Business

How To Scale A Service-Based Business

Guest author Scott Gerber is the founder of the Young Entrepreneur Council.

Scaling any business takes time, money, and often, a lot more effort than you think. Scaling a service-based business in particular is tricky—we’ve seen many try to scale and then crash as they outpace their own growth.

So how can you make sure not to follow in their footsteps? I asked 9 entrepreneurs from YEC for their best advice on scaling service-based businesses. Here, they share what strategies worked for them, and what they would suggest others do.

1. Outsource, Then Hire

When growing rapidly, the knee-jerk reaction is to hire to meet the increasing demand. But before hiring staff, determine if any of the roles and services could be performed by a robust pool of freelancers or contractors. These resources not being on staff would be seamless to the client or end user, but allow the company flexibility if business slows or if someone doesn’t work out. You can always hire, but using outside resources first allows the owner to think about long-term growth strategy versus growing out of reaction to the immediate workload. And you may be able to get expertise and experience from contractors that you couldn’t afford to hire as full-time employees. Angela Harless, AcrobatAnt 

2. Remember You Can’t Do It All

When my business first starting growing, I spread myself too thin by trying to still be involved in everything. Once I learned that I didn’t have to feel guilty about not being involved in every task, I became less stressed, and Crowd Surf started to flourish even more. It’s important to surround yourself with team members who are amazing, because you’re going to have to delegate projects to them. We established a great system of weekly calls and reports to monitor the success of our team members, so I can be knowledgable about everything that’s happening and not become overwhelmed with a massive workload. Cassie Petrey, Crowd Surf 

3. Surround Yourself With the Right People and Right Attitudes

As much as you want to be in multiple places at once, it is imperative that instead you find enthusiastic people who share your brand’s mission to help you scale. The right or wrong person can make all the difference. Trust your gut when interviewing and recruiting. If it doesn’t feel right, or if they don’t share your passion, they are not the right person. Have a manual in place and a training process ready to go before you start looking for the people. Once you find the right people, train them on your brand’s guiding principles so that when they expand your service it is as if you are doing it yourself. The person you hire needs to be competent in the service they are providing, as well as knowledgeable of the market they are serving (both location and demographic). Lindsay Pinchuk, Bump Club and Beyond 

4. Develop In-House Tools

To scale effectively without having to drastically increase payroll costs, identify tasks that could be handled more effectively and find a developer to create your own set of in-house tools to expedite them. At one of my startups we found that hiring more people for blogger outreach made the cost of training and HR too high, which limited our growth. Instead, we brought in a programming team to automate many of the tasks specific to outreach. The tool connected email messages to projects, enabled us to create and send out templates, allowed us to create reminders for tasks, and much more. Using this tool, we were able to double capacity for each employee, thus reducing the need to hire in order to grow. Marcela DeVivo, National Debt Relief

5. Create Detailed Training Materials

Scaling a service-based business means you need to be able to have other people deliver your service as good or better than you would yourself. The only way to do this is to establish an extremely efficient and thorough training program. You will need a manual that explains in detail how to perform every aspect of the service so it can be executed the same way every time. Create accompanying videos, classes and training seminars. Even though people are delivering the service, it needs to be as automated as a factory-made product would be. Make sure to provide significant training time on professionalism and manors, as service-based businesses are about relationships. Thomas Minieri, Planet Ballroom International

6. Focus on Your Core Strengths

Maintain intense focus on the things only you can do, like strategy and business development. Prioritize those things above all else and build processes so you can see your vision through the work of someone else’s hands. —Lindsay Mullen, Prosper Strategies

7. Use a Professional-Services Management System

Having a proper system in place is critical to scaling up a service-based business. For example, if your work requires time tracking, look for a system that supports time logging and resource management. On the other hand, if your work is more production-based, look for a project-management system that supports milestones and deadlines. With both options, you can see at a glance how every client engagement is doing. Ultimately, a proper system should give you a sense of control by knowing how many projects are active, who is working on a what and which resources will become available when. These, and many more questions, can only be answered if you build on the foundation of a solid professional services management system. David Ciccarelli, Voices.com

8. Build Partnerships

Chances are, your customer in a specific industry buys multiple products or services from different vendors. A strategic partnership can be a very powerful weapon to scale your business. Look for those complementing vendors (products or services) who your customers are buying from, leverage an opportunity where your service can integrate into their product or service and vice versa through a revenue share arrangement. For instance, if you’re a mobile app consultancy, you can partner with a web development or a creative agency. Rahul Varshneya, Arkenea

9. Build a Tech Platform

Even if a business is service-based, a founder should build a tech platform to scale his or her business. The platform should be able to help the business streamline operations and improve efficiencies. For example, my company built a proprietary customer-relationship-management system to help ourselves efficiently and effectively manage our customers in a service-focused industry. —Jason Thanh La, Merchant Service Group and K5 Ventures

Photo by plantronicsgermany

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