Growing any business can be a very challenging process, and today we will go over the 5 most common mistakes most businesses make when starting a service business. This post is not for those who are looking for 5 to 10 monthly clients. These practices are made for those who want to scale a business to 6, 7, or more figures per year.
Not setting yourself up for scalability
Setting up your business to grow without you is the key to a successful business. If you can leave your business for a year and come back only to learn that the business grew without you there, you now have a successful business. It also means that if you used that year to focus on marketing, your business would explode.
Let me give you an example of what I mean when setting yourself up for scalability. I’ve been in the cleaning industry for a long time and I’ve seen 2 types of people. Person A buys products and equipment that are great for the job. Person B does’t come with the right products or equipment for the job (typically they don’t know better or they do not want to spend the extra money to get superior alternatives).
Person A does 4 jobs with ease. They have a great procedure of how they start the job, their products are strong enough to take certain stains out without much effort, and the vacuum is easy to work with allowing them to get through the job quickly. Person B does 2 jobs a day in the same amount of time, going home exhausted. Their procedure is okay, but they use poor products, making them scrub minutes just to get certain stains out, vacuum is older giving them trouble, and slowing down each and every job.
Although person A spends more money on keeping up with good products and equipment they are performing 2 more jobs daily, earning way more money and coming home way less exhausted than person B. Person B may think they are doing great, but based on what person A is doing, they can be doing much better. From my experience person B usually quits and complains. Person A has a great foundation and with that foundation they can open up their own cleaning service, teach others their methods, and eventually free themselves from performing the jobs themselves. Person B would never be able to grow a business.
That is how growing a business looks like in comparison. There are people that use the right procedures, tools, and materials. Then there are people that make everything harder than it should be.
Not studying metrics
How do you compete with someone when they are selling 3 times as many clients as you while doing less work? That is the power of testing, something that a lot of small businesses do not do. Testing is key to your success. If I made you 2 websites today, giving both of them 100% effort, neither I nor anyone in this world would be able to determine which website performs better and sells more clients. Without testing, how do you know which version is the right one for your company? One can make you double the money while the other can be a total bust. Studying metrics in order to sell is just one piece of the puzzle.
You also have to study what is working when performing the service itself. For example; for the last few months, you’ve been cleaning with the same products. One week you ran out of those products and tried new ones. All of a sudden your clients loved the smell of the new products and each of them complimented your work. I would say it would be a smart move to make the switch. The happier your customer is, the faster your business will grow.
Here at BookingKoala, we have someone study metrics for hours each day. They study everything closely, learning which content people read so that we can improve that content to help you, which features people prefer over others, and much more. My goal is to make BookingKoala the best platform in the world for service-type businesses, and without testing, listening to customers, and studying metrics daily, there is no way to do that.
Not leveraging existing customers
Your existing customers already decided to use your services for a reason. To grow faster, you must learn to implement strategies that will increase your growth. When used properly having a good referral system is still the best way to gain a customer for most businesses. By best, I mean most cost-effective. Would you rather spend $100 acquiring a customer on Facebook or reward that same customer $20 for bringing in a friend to book your service? Not only was it cheaper but you just made your existing client happier. Above is an example of one of the referral strategies used. This works because it’s convenient for the user. Simply give someone a link and both of you are rewarded.
Not listening to your customers and workers
Paying attention to your customers and workers is key to your success. Even if you no longer deal with them yourself, you need to have a structure in place to know what they have been struggling with and what they like. If they keep complaining about something, you need to address it. If they fall in love with something, you need to figure out a way to give it to them. To give you a perspective of why this is so important, take a look at BookingKoala. If I never listened to my customers and employees when I was growing King of Maids, there would be no BookingKoala. I created the software because I wanted to solve every problem everyone had using technology while making my life easier in the process. On top of making my cleaning service superior, I even created something magnificent that now other businesses are benefiting from. Listening to your customers and employees is the only way you will find massive success.
Not positioning yourself for the win in the long run
The easiest way to get ahead for a small business is to plan ahead. For example; when Yelp first came out, it was just like any other business. No one knew about it, but yet some businesses started to see its potential. They signed up and started to gain reviews. Once Yelp started to pick up, those businesses that gained a lot of reviews hit the jackpot. All customers would go to them first and new businesses had a very hard time catching up. Today, Yelp is extremely competitive and if you are a new business with a small budget, it will be impossible (maybe not impossible but very hard) for your business to compete there. This is where planning comes in. You need to find the next trend and you need to believe in that trend until it becomes successful enough where it benefits your business. If you pick the right one, your business can change very quickly.
Bonus tip: At the time I’m writing this I see NextDoor as possibly being that next trend.
It is important to set up your business properly from the very beginning. It will make your life much easier and your business will grow faster and more efficiently.
Filip Boksa
CEO and Co-founder at BookingKoala, home to thousands of entrepreneurs worldwide. Grew his first business King of Maids, to over 5 million by 22 with $6,000 and no outside funding. Today focuses on helping businesses through BookingKoala.
