Tips for service-based businesses
A service-based business is one that provides its customers with a service for a fee. These businesses make their money by selling their time, energy and expertise in exchange for a result.
1. An accountant is paid for the time and expertise it takes to review your finances and provide lawful, accurate and timely advice based on your individual financial position.
2. A massage therapist is paid in exchange for the time and energy it takes to complete your massage, with the expectation that at the end you’ll feel better.
When selling your services, you’re selling your skills, knowledge and brand. Your clients and customers are buying your time, along with the services you specialise in. To be successful as a service-based business, customers need to see the value of your services.
Try these tips:
1. Know the services you provide – understand them inside and out, and be ready to answer any questions that might come your way. Take a gym membership for example, you should know what is included and excluded in every membership on offer.
2. Have success stories, testimonials and examples ready to share with your customers to help them see the potential benefits they could experiences from your services.
3. Know your point of difference or unique selling point – understand what makes you stand out from your competitors and use this to your advantage when marketing your business.
Pricing your services
Pricing your services correctly is an important part of your business’s financial success. Before finalising your prices, make sure to:
1. research your competitors and similar businesses
2. review all your business costs, including your salary
3. consider how your pricing can influence who your potential customers are (for example, are you a budget service catering to students?).
Knowing what your competitors charge for similar services and how much your business costs to run will allow you to make informed decisions when setting your pricing structure. Following these tips can help you set a price which keeps you competitive and profitable.
Tip: Don’t forget to include GST in your prices if your business is registered for GST.
Adding goods to your service-based business
Some service providers will also sell products as part of their business model. For example, a mechanic may sell parts for your vehicle (products) alongside the labour costs for installing those parts (services).
Selling products to your existing customers can:
1. be a good way to make more money
2. keep your business front of mind if your brand or logo is on the goods
3. allow you to provide a more complete service, (your clients won’t have to provide the products and parts needed to finish the service).