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What Is a Service Business?

October 18, 2022 4 min. read
Academy / What Is a Service Business?

A service business provides a skilled service, personal labor, or expertise instead of a physical product. This includes hairstylists, accountants, plumbers, doctors, and many more examples.

These services exist to help people who don’t have the time, knowledge, or skills to complete the tasks themselves. That’s why service-based businesses are often profitable and always in high demand.

1. What types of service businesses are there?

Service businesses can fall under many categories, including:

  • Health and wellness (e.g., doctor’s office, dental office, hair salon, nail salon, spa, massage therapy, physical therapy)
  • Business services (e.g., information technology consultant, law office, marketing agency, software engineering, real estate, financial adviser, graphic design)
  • Transportation (e.g., bus, taxi, airline, ride sharing)
  • Home services (e.g., lawn care, cleaning, plumbing, dog walking, junk removal)

READ MORE: Quote services fast with our free estimate template

2. What is a good service business to start?

Starting a service business can be rewarding. You can be your own boss, work flexible hours, and help customers solve problems they don’t have the skills to do on their own.

When you’re deciding what type of service business to start, ask yourself questions like:

  • What experience do I have? Some regulated services require you to have a license, like HVAC or plumbing. Others are easy skills to pick up and don’t need certification, like lawn care and cleaning.
  • What niche is open in my service area? If there’s a service gap in your area, you can be the one to fill it. For example, if all local cleaning businesses are booked months out, or no pool cleaning companies in your town offer maintenance, that could be your niche.
  • What is my startup budget? You can start a cleaning business for roughly $685 (USD), while starting a pest control business can cost upwards of $6,000. Consider how much money you have available and what kind of funding you can get.
  • Do I want year-round or seasonal work? You might want to only work a few months of the year, especially if you already have a full-time job. If so, try offering a service that’s only in demand for part of the year, like holiday lighting or snow removal.

Check local regulations to make sure you have the required training before you start a business. Read our guides to appliance repair certificationHVAC certification, and plumbing certification.

READ MORE: Check out our up-to-date home service salary guides

3. Service business best practices to follow

Running a home service business is very different from running a product-based company. Instead of focusing on product quality, you’ll be focusing on the quality of your customer experience.

Follow these best practices when you’re starting and running your own small business:

Originally published August 2020. Last updated on October 18, 2022.

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