How to start a service-based business – three case studies

Are you trying to get a service-based business or freelance career off the ground? Read three clever ways service-based entrepreneurs overcame common start-up problems.

Running your own business is exciting, liberating and wonderfully rewarding. But it can also be immensely challenging.

You may be familiar with the a day in the life as an entrepreneur image that often pops up on social media – a heart-warming (and reassuring!) graphical representation of the ups and downs of life as an entrepreneur.

One minute you are flying, the next you are full of self-doubt and struggling with set-backs. Then you bounce back and feel elated… and so it goes on.

Service-based businesses face unique challenges

It’s comforting to know that all entrepreneurs face problems in their start-up journey. But how do you navigate past them? And importantly, how do you tackle the problems unique to your industry or sector?

Every industry comes with it’s own unique set of challenges. And in this article, we explore some of the particular issues faced by service-based businesses, including:

  • Setting rates for services.
  • Getting paid fairly for time spent on projects.
  • Building a strong pipeline of work.
  • Managing busy periods.
  • Maintaining self-belief during quiet times.

How three business owners have overcome their challenges

Paula Hutchings from Marketing Vision Consultancy has worked with many start-ups and small business owners, including a number of service-based entrepreneurs.

Now she’s sharing the experience, advice and practical steps taken by three women to overcome the challenges they have faced.

So if you’re a service-based business owner looking for inspiration, grab a cuppa, read on, and be assured that you’re not alone in your struggles!

1) How a copywriter built trust

One way a service-based business owner can encourage a strong pipeline of business, is to generate trust-building word-of-mouth referrals.

Rachel Hodges, content strategist and copywriter, dedicates time to building up trust with her customer-base to ensure a regular flow of work:

“A major challenge of running a successful, service-based business is identifying where your work is going to come from. It’s worth spending time researching possible channels and the networks you can be part of.

In the creative field that I work in, as a copywriter and content strategist, my clients can be businesses of any size looking for my skills to meet their needs or creative digital agents that bring me in as a third party to assist their own clients.

Because my clients are very interested in how the quality and relevance of my work will benefit them and their business, word of mouth referrals are very effective for me. I also identify key influencers, such as digital agencies, that come to me to support their own clients when the need arises.

That’s why it’s important I leverage my work to show other potential clients what I do. My website has a body of case studies that I regularly refresh with recent projects.

It is also really important to devise methods to build repeat business. This may be retaining the same client over a long time or could be through devising a service you develop once but reuse again and again for multiple clients. Whichever way you choose you’re building up customer trust, great for building word-of-mouth referrals.”

Learn how to turn happy customers into your best advert by writing powerful case studies, with this quick and easy guide!

2) How a social media manager traded skills (and won business)

Being flexible and embracing skills trading can help kick-start a customer base.

For Victoria Hill, co-founder of start-up South London Social, flexibility in their rates and being open to skills-trading has enabled them to build a flourishing customer base in their local community:

“South London Social is small, friendly social media agency based in South East London offering social media management, workshops and masterclasses to small businesses in the community.  

The challenge we face as a small start-up ourselves is setting rates and prices for other small local businesses. Often business owners aren’t aware how time-consuming managing a social media channel can be.

We use our expertise to advise them how much to invest in social media to get the best results. We overcome this challenge by being really honest, open and of course flexible.

Initially we will have a phone conversation with a new client and then a face-to-face meeting before rates and prices are agreed. We really get to know them and their business and then work together to develop a bespoke social media solution that right’s for everyone.

We are firm believers in also swapping skill sets instead of money with local businesses. We love the idea of helping a really small business with social media advice or support in return for something that will benefit our business. It helps us to work within our community and build that local feel that we want for South London Social.”

Fancy swapping skills to get your business off the ground? Find out how to successfully start skills trading.

3) How a PR consultant used time logging to set her rates

Logging the time you spend on client projects can help you set your rates with confidence – as Ros Morgan, founder of Morgan Fraser PR, found out.

When Ros first set out on her own, keeping a detailed log of the time she spent on each project helped her to overcome the struggle of setting her service rates:

“The most challenging aspect of running my own business has been knowing what to charge for my services. In the past I handled new business accounts and knew what the market was charging. This also meant I knew what people were willing to pay, or would expect to be charged.

However, I found this didn’t help at all when I set up on my own. Why? Because Morgan Fraser PR (MFRP) is a completely different PR company to any I have had worked at – in terms of size, resources, time available to each client, location and so forth – and so I had to figure out what MFPR would charge, and in doing so, figure out what I was worth (which is tricky enough!).

The first thing I did was talk things through with another professional outside of my industry. I then considered all the services I was offering and what made MFPR unique. Thirdly, and most importantly, I began logging the time I spent on each client or administrative exercise, per day in order to understand exactly how I was spending my working time.

After a few weeks I used this information to determine what my hourly rate was really worth (taking my experience into account too) and as a result, I’m now better informed when proposing fees for a campaign.

To be fully conscious of how I was spending my working day was like changing the habit of a lifetime. I even set myself an alarm to remind me to log the hours at the end of the day.

But like most things, once something becomes routine (after weeks of reluctant data input!) I had my result, and I was thrilled and relieved.

I now feel in a comfortable place when discussing fees and whilst I’m still very open to negotiation, I have an informed understanding of what my services are worth and can discuss this confidentially with prospective clients.”

Do you struggle with money and setting your rates? Read how to charge what you’re worth, and our complete guide to raising your freelance rates.

Have you got a question about your service-based business? Tweet Paula @MarketingVC or contact her through her website – she’d love to hear from you.