Did you know that it’s possible to make $100K in just four months?

Besides the profitability, starting a service business also leads to greater independence and job satisfaction. We talked to Brandon Vaughn, who started Wise Coatings in 2021 and now makes more than $500K per month, to learn more.

His passion for marketing and branding transformed his unique service business idea into a thriving 25-location empire. Brandon is ready to share what it takes to launch and manage a successful service business.

Together, we’ll help you create a compelling business plan and find the right niche for your expertise. You can either keep reading or click on any of the links below to jump to the section that interests you:

Keep reading to find out how to start a service business.

What Is a Service Business?

A service business provides services to customers either in person or online. While products may be included as well, the primary function of a service business is to help customers solve a problem, save time, or improve their lives.

Service businesses include companies in the following industries:

• Transportation
• Cleaning
• Travel
• Hospitality
• Construction and maintenance
• Consulting

Many service businesses offer free consultations. Customers hire them because they lack the skills, time, or knowledge to complete the tasks on their own.

Case Study: Wise Coatings

Brandon Vaughn grew up around business owners. He already owned a window washing business, but he wanted to document his entire process of starting a business from scratch.

He got that opportunity when he started Wise Coatings in 2021 with $15K. In the first month, he spent $5K on branding, $2K learning how to pour epoxy floors, and another $5K marketing the service online.

Check out our interview with Brandon about how to start a business:

His initial strategy may have been too aggressive. Wise Coatings struggled to cover expenses in the second month. It nearly went bankrupt when Brandon took on a job that blew up in his face, but he overcame it.

Since then, Wise Coatings services have been in high demand. There are now over 25 franchises in seven states.

Brandon shares more lessons learned and expert tips in The Business Startup & Growth Blueprint with the UpFlip Academy.

Service Business Ideas

There are all kinds of service businesses. Businesses that provide services typically fall into two categories:

• Local businesses like home improvement companies and restaurants
• Remote businesses like digital marketing agencies and consulting businesses

Remote businesses are some of the best small businesses when you’re first starting out. They have lower overhead, and you won’t have to worry about staffing a physical location.

Let’s discuss some of the best service-based businesses in greater detail.

Idea #1. Social Media Marketing

You might consider starting a digital marketing company. According to market.us, digital marketing is expected to grow to $1.31 trillion by 2033.

Find out how to start a social media marketing company from a business owner who already has:

Idea #2. Financial Services

Offering financial investment advice, payday loans, or tax preparation can earn you a great living. You’ll normally have to work at other financial institutions first to become a financial advisor. However, you’ll probably need certifications and licenses to work in this sector.

Check out our blog about starting a bank.

Idea #3. Fitness Business

You could start a business in the health and fitness industry. According to Statista, the health and fitness industry is expected to grow 9.61% each year and reach a market value of $6.73 billion by 2027.

You could become a personal trainer or start a gym.

Idea #4. Maintenance and Repair Service

All kinds of businesses provide maintenance and repair services. This includes handyman services, air conditioning repair, car shops, and landscaping companies.

If you’re interested in starting a lawn service business, learn more from Mike Andes, the founder of Augusta Lawn Care. He turned his lawn care business into one of the fastest-growing franchise systems in the country.

Idea #5. Childcare

Childcare is another service business that can earn a great living. Consider becoming a babysitter, starting a nanny service, or creating an in-home daycare. Find out how this daycare owner makes $11.2 million per year.

Idea #6. Business Consultant

If you’re a professional with lots of experience, consider starting a consulting company. Find out how OnStrategy CEO Erica Olsen started a $500K-a-month service business:

Idea #7. Car Washes

Start a service business washing cars. For passive income, you can automate it or hire people to run it.

Learn how to start a car wash below:

Idea #8. Cleaning Service

You might want to start a cleaning business. In fact, you probably already have everything you need at home.

Check out our interview with Cristobal Mondragon about how to start a cleaning service business:

If you’re looking for even more tips and tricks, sign up for Cristobal’s 7-Figure Cleaning Business Blueprint in the UpFlip Academy.

How to Start a Service Business

You’ll need to perform the following tasks when you start a service business:

1. Research the market.
2. Write a business plan.
3. Organize your finances.
4. Create a service website.
5. Register your business.
6. Develop a pricing plan.
7. Promote your business.
8. Provide excellent customer service.
9. Improve your skill set.

Get ready to learn how to start a service business.

Step #1. Research the Market

Once you decide what type of service business you want to start, you’ll need to think about how you’ll turn it into a profitable business idea. That means you’ll need to do some market research.

Make sure to document everything you find because you’ll need it when you write your business plan.

Step #2. Write a Business Plan

Every small business owner should create a short business plan when starting a new business, whether in the service industry or not.

Many successful entrepreneurs recognize that their business plan helps them stay on track and true to their goals.

Learn how to write a business plan.

Step #3. Organize Your Finances

You’ll need to cover startup costs to start a service-based business. You might take out a personal loan or use your savings or a credit card. You may also be able to borrow some money from friends and family or take out a small business loan.

While you always hear about small business loans for startup capital, it’s challenging to qualify with a home services business unless you already have revenue. Franchises also tend to have an easier time getting approved.

Learn more about small business loans.

Step #4. Create a Service Website

Every successful service business needs a website. Learn about creating a website for your new business.

Step #5. Set Up Your Business

While many service business ideas can be run without a license, you’ll want to think about how to start a service business legally. This is especially important if you plan on hiring employees and working with commercial clients. Follow the steps below for setting up a business:

1. Choose a business name.
2. Create a business structure.
3. Get your employer identification number.
4. Get a business license.
5. Open a business bank account.
6. Get business insurance.

Let’s look at each aspect of a service business setup.

Choose a Business Name

Setting up a small business starts with choosing a business name. You’ll want to:

1. Brainstorm names.
2. Search the trademark database through the U.S. Patent and Trademark Office.
3. Check website domain name availability on a site like DreamHost.
4. Check the availability of social media handles.

Check out our extensive business names category for inspiration when naming your service business. You can also use our business name generator for more ideas.

Create a Business Structure

You’ll want to create a limited liability company (LLC) or corporation for your new business. The personal liability protection of an LLC or corporation is helpful in lawsuits, filing taxes, and applying for small business loans.

Check your secretary of state’s website for information about how to register. For more information, check out our blog about the different types of business structures.

Get Your Employer Identification Number

You’ll need to get your employer identification number (EIN) from the Internal Revenue Service when you start an LLC or corporation. There’s no charge to get one.

An EIN is especially important when you hire employees. It’s how you tie employee and company tax filings together.

Get a Business License

A new service business may need licenses, permits, or other certifications to operate. For instance, many professional services and contracting businesses require specialty licensing, bonds, insurance, and more.

Get local assistance from the Small Business Administration (SBA) to find the best resources for your location and industry.

Open a Business Bank Account

Make sure to get a business bank account. Accepting payments, managing cash flow, and paying business expenses are all part of business management.

You might want to consider applying for a bank account at some of the top SBA lenders. Building a relationship early will give you a head start when you decide to apply for a small business loan. The table below shows the top 504 lenders.

Get Business Insurance

A service business needs insurance policies to protect against unforeseen events. Some of the most common types of small business insurance include:

• General liability insurance: This covers against accidental bodily and physical injury that the company is liable for.
• Professional liability insurance: Professional liability protects you in case there are errors or other problems with your work.
• Workers compensation insurance: This protects the business when an employee is hurt on the job.

We recommend checking Simply Business to get quotes from multiple insurance companies.

Step #6. Develop a Pricing Plan

As a service provider, you’ll need to create a price sheet or formulas to establish the amount you’ll charge potential customers.

Many entrepreneurs charge by the job or square footage. They’ll charge more for the first service and other factors, then give discounts if busy clients hire them on a routine basis.

Check out our blogs to learn about pricing methods for service business:

• House Cleaning Pricing
• Pressure Washing Pricing

Brandon explained:

Step #7. Promote Your Business

You’ll need marketing efforts to bring in new customers. The process will look similar to this:

1. Identify your target market.
2. Perform market research
3. Write a marketing plan.
4. Set up marketing channels.
5. Implement your marketing strategy.
6. Ask for reviews.

Marketing is essential to operating a successful service business. There are numerous marketing strategies you’ll want to use as a small business owner, including:

• Market research
• Creating a marketing plan
• Email marketing
• Social media marketing
• Content marketing
• Search engine optimization (SEO)
• Traditional marketing
• Paid ads
• Asking for reviews

Perform Market Research

We can’t stress it enough: You need to focus on the services people want. You have to research what customers are looking for and let them know you offer those services.

Create a Marketing Plan

Once you’ve created a business services list and identified your target market, you’ll want to create a marketing plan. Check out our blog about creating a budget to help you market your service business using start-up funds.

A new business’s success often comes down to its marketing strategies. A service business marketing plan should focus on how to reach and educate customers and strategies to keep them coming back. Brandon explained:

Use Email Marketing

Email marketing consists of gathering email addresses and creating funnels to take people through the customer journey. From there, it’s easy to automate emails using software.

Think about the different types of emails you’ll need to send. Some common emails for service businesses include:

• Booking email: Send this after someone has booked your service.
• Services completed email: Thank the customer for the chance to serve them and ask for a quick review.
• Promotional emails: Let customers know when you’re running a sale.
• Informational emails: Educate customers on products and services that help them maintain their homes.

Use Social Media Marketing

Share everything on social media when you’re starting a company. It doesn’t have to be high-quality video or images. People just like to see what’s going on, and they become familiar with a business when they see more from it.

Develop Content Marketing

Content marketing is simply creating useful content that will help your potential customers. It doesn’t have to be complex.

Check out Mike Andes’s website for a great example of how to use content marketing. It provides short videos that answer questions about starting a services business—all while getting Augusta Lawn Care’s name out there.

Use Search Engine Optimization

Use SEO to target your website content to common internet searches and rank higher on Google. This strategy is a long-term play.

By targeting high-volume searches, service businesses can get large amounts of traffic from this strategy. For instance, UpFlip has 30 pages that generate over 1,000 visitors per month.

Include Traditional Marketing

Every service business should use some traditional marketing to reach its target audience. Many service-based business ideas use a strategy called “three rounds” or “five rounds.” This involves sending a postcard to the three or five neighbors closest to your new customer.

Use Paid Ads

Paid ads are an essential part of any business’s marketing strategy. Digital advertising options like Google Local Services Ads can increase your website’s traffic and reach new customers. Brandon told us:

Ask for Reviews

Customer testimonials are a crucial piece of service business marketing. Make sure to automate requesting reviews.

There’s even software that provides customers with pre-written reviews. A strategy like this allows you to place target keywords in your reviews and tell Google what your service business is all about.

Step #8. Provide Excellent Customer Service

It should go without saying, but you need to provide exceptional customer service as a service business owner. This involves multiple aspects, including listening to the customer, doing the job right, and cleaning up after yourself. When problems arise, make sure you’re resolving customer complaints in a timely manner.

Step #9. Level Up Your Skills

A service-based business should focus on continuous improvement. This might mean taking professional development courses, improving your processes, learning new business skills, and creating training procedures.

Many owners of service-based businesses recommend teaching others about your services. This helps develop your skills too. That’s why Brandon partnered with us to create his business startup course.

How to Manage a Service Business

Research the Competition

You’ll want to perform market research to understand how other business owners manage their service businesses.

Fortunately, business owners have become much more disclosive about what they do. Many business owners share intimate details about how they run their business on social media to develop their expertise and educate potential customers.

Just search online to get all kinds of great tips. For more of our interviews with successful entrepreneurs, check out the UpFlip YouTube channel.

Identify the Service Business’s Needs

You need detailed knowledge about current and potential customers, your cash flow and business expenses, and time management.

Once you understand your needs, it’s time to set up software and tools to manage your internal processes. For instance, many service businesses use software like QuickBooks to track revenue, business expenses, payroll, and profit.

As the business grows, you might want to upgrade to HubSpot to manage most of your communications. It offers cool features like contextual marketing that displays different information based on what the company knows about the customer. The most useful features are in the paid plans.

Hire High-Quality Employees

Hiring employees can be a daunting task. You’ll need to get a payroll processor, monitor time, comply with employment laws, train the employees, and pay them.

Some of the things you can do to make hiring easier include:

• Consider using HR outsourcing solutions.
• Learn about recruiting and hiring.
• Use pay-for-performance strategies.

Brandon told us:

Listen to the Customer

Customer satisfaction is the key to acquiring new and recurring customers. After starting a service business business, you’ll want to:

• Think about how you would like customer interactions to go when you hire a professional.
• Listen to the customer to understand their wants and needs.
• Communicate openly and honestly about what you can and can’t do and why you suggest the solutions you do.
• Meet your commitments.
• Request feedback.
• Adjust your business processes based on the feedback.

Sometimes, small changes like adding a call center or providing quotes on your website can be the difference between booking clients or missing out.

Seek New Opportunities

Home service professionals and other businesses should always be looking for ways to increase their revenue. This could mean networking or adding a new service.

You might have to invest in employees or new software, but opportunities will arise where you can increase your client base without deviating from your business plan. Take advantage of them when you can.

How to Scale a Service Business

Scaling is all about creating systems that perform well even as your workload and revenues increase. This process normally involves:

• Documenting everything
• Automating routine tasks
• Improving processes
• Hiring and expanding responsibly

Let’s discuss some ways to help grow your business when you’re ready to scale.

Increase Your Marketing

Increasing your marketing can help you ramp up your business when you have excess capacity. Google Local Service Ads is a great way to get more business because you only pay for people who contact you.

However, it’s a bit of a waiting game. Brandon Vaughn warns:

Expand Your Services

Another way to increase your business is to expand your services. For instance, pressure washing is a seasonal business, so Brown’s Pressure Washing does gutter cleaning and hangs Christmas lights during the offseason.

Just make sure that the expansion doesn’t require a huge investment in other tools, equipment, and licenses.

Hire More Employees

A service-based company will eventually reach a point where it has to hire people to expand the business. Once your business starts rejecting customers because you don’t have time to do the work, you’ll want to start hiring.

There are certain stages many business founders go through including:

• Owner and operator: Many people never choose to go past this step. The small business owner does everything during this stage.
• Manager and trainer: Small business startups that hire employees will normally operate in this manner until they get big enough to have divisions and managers. The owner is actively running a business but not performing most of the customer-facing roles.
• CEO: At this phase, the business startup has a whole team of managers running it and the founder is the CEO. The CEO oversees the managers and guides the direction of the small business.
• Owner: At the highest level of business success, the owner can step away from operations completely and pursue other ventures, sell the business, or retire. At this point, you are completely hands off except for board meetings and calls with executives.

Open More Locations

Opening a second location for your service business is another way to scale. The steps to starting a business in a new location are virtually identical to starting a small business from scratch. The main difference is that you will already have better processes in place and you may be able to combine some roles.

As you get more locations, you may want to start using a service business franchise model and open a call center that serves all the locations. Brandon explained:

If you need help starting a franchise, consider hiring a consultant to guide you through the process. We recommend Tom DuFore of Big Sky Franchise Team.

Ready to start your own business?

Starting a service business can provide independence and profitability.

We covered market research, business planning, financial preparation, and registering the business. We also discussed marketing and long-term management strategies.

You have just about all you need, but it’s up to you to start your new business and pursue your goals. What service business idea suits you best? Let us know in the comments below.