This is part of a series on How to Start, Run, Grow & Fund a Business in South Africa. These pages have to be read in order:
- How to Start, Run, Grow & Fund a Business in South Africa (using what you currently have)
- Choosing the right Business Idea for You
- Writing the Business Plan
- Supply Value Logistics Chain – Research and Understand Your Industry
- Raw Materials Business
- Equipment Business
- Skills Business
- Manufacturing Business
- Distributor Business
- Wholesale Business
- Retail Business
- Service Business
- Test if Business Idea is right for you
In a service business, you sell something that you know how to do. You sell a skill that you have learnt. But don’t just think of a skill like plumbing or electrical. If you own a piece of equipment, that equipment can be used to make a product but can also be used to offer a service. One piece of equipment can have two different business models (I will delve deeper below).
A service business is why having a skill is so important , this business can be started with very little, even nothing. The more indemand a skill the more your service is worth and you can charge.
We know from our supply value logistics chain analysis the value of skills, every value chain has it. The person making the product needs skills (manufacture), the person transporting the goods in trucks (logistics) need driving skills, the person eventually selling the product (retail) needs sales skills.
A service business can take many forms, it can be used to make something new, to refurbish a used item, to repair a broken item. Cleaning a dirty item is also service business.
As a small business owner, scaling a service business is hard, especially if you a one-person business or you and an assistant. First and foremost you need to get your pricing right, you can charge per hour, you can charge per job, you can charge labour only or factor in materials in your pricing as well. To grow this business you need to get to the point where you are not doing all of the labour, as new jobs come in you hire more people. The problem is many people are unable to get to that point and they have a business that is dependant on them doing the work. It is easier said than done, and each industry will be different but that should be your goal.
Product vs Service Business
What constitutes a service business is not as clear cut as charging per hour for labour. If you have a piece of equipment and doing custom jobs then you are in fact offering a service. Let me give you a few examples:
- If you have a sublimation printer and a heat press and you print mugs with peoples faces or logos on then you have a mug printing service. But if you print mug memorabilia that is going to be sold in a curio shop at the airport then you have a product business and there are different considerations.
- If you have a vinyl cutter and you make custom signs for people you are offering a signage service, but if you make wall art or car decals that are sold in shops or website then you have a product business.
Both of these examples and even other businesses like custom furniture vs retail furniture completely different businesses. The custom service businesses are more time and labour intensive and that has to be factored into pricing. Many people have also switched between the businesses if one does not work.
Like I mentioned on the skills page when you offer a service you are offering something that is worth something and you are able to leverage this to make money. You don’t even need money, people can supply the equipment and materials and you take that equipment and material combined with your skill to do the job.
Service Business Ideas on Khoi Capital
Start, Run & Grow a Laundry Business
Start a Road Freight Company
Start a Contract Transport Business
Start Your Own Online Travel Agency In South Africa
Start a Wedding Planning Business
Start an Event Planning Company
Start a Bike Repair, Service and Retail Shop
Start a Project Management Consulting Business
Start a Dog Grooming Business / Doggy Parlour
Start a Handyman Service Business