What Should You Do?
So what should you do if you are on your own providing a service? Don’t despair, here are some ideas that should help:
- Track time. In this type of business it is even more important than tracking your finances. You should track what you spend your time on and apply the same analysis you would to your finance. For instance, you should calculate carefully for everything you do your return on time invested (ROTI). Including how much you are making from each job / client per hour, your return on different services you offer, and how much you get back from different marketing activities. Where possible spend more time on what provides the best return and less on what provides a low return.[Side-note, why time is more important than money: If you spend all your time and haven’t made enough money you have very few options. Whereas if you have ran out of money but have 20 hours available in the week ahead at least you have the time available to try and make more money]
- Consider outsourcing activities as a halfway house to taking on that first employee. Especially if there are areas where you are weak that you think someone else may be able to provide a better return. This may mean outsourcing a part of the actual service you provide or outsource something administrative that takes up a lot of time like your marketing.
- Leverage IT and software as much as possible to improve how much return you get on your time. This could mean specialist software that helps with the service you provide, or making better use of standard software to save time like spreadsheets and accounting software. Anything that makes you more proficient at your service or at your admin and business generation duties.
- Try to expand in to areas that aren’t as time dependent. Like offering a product related to your industry like a book or an online course. Something that you can offer to existing and past clients will save time on marketing. It only needs to subsidise your existing income enough to get you to that first employee. A product like this can also help bring in new clients for your main service so it can be used as a marketing tool.
- Duplicate. Look for ways you can duplicate your effort. For example Solicitors use template contracts. You could design websites, provide marketing or manage finances for the same type of company so that you are reusing things you have spent time on. You may also gain efficiency by doing all the work together for instance if you were running a social media campaign for a dentist locally and one elsewhere in the country (so there is no conflict of interest) then they may be happy for you to post the exact same thing on both their social media profiles most of the time, you could use software that does this automatically.
- Make overlap. This is where you make alternative use of assets your business has built up such as it’s client base / contacts, your ability to deliver a particular service, any software you have paid for or any systems you have built. For example, a personal trainer with hundreds of past and present clients and relevant contacts would have an easier time setting up a group exercise class as he can market it to existing contacts. He may also be able to use the same equipment he normally uses for clients and the same facilities. Essentially you are looking for a way to generate income more efficiently than someone just starting up a new business, by re-purposing assets you have already built up, providing a better return on your time.
- Try and get friends or family to volunteer some of their time and pay them back at a later date once you have that first employee. Show them this post to explain why you need their help!
I hope you found this helpful. Feel free to comment with any ideas of your own that may help service based businesses.