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How to Scale a Service Business

Do you offer a service heavily reliant upon your relationship with your clients?

Are you having difficulty growing without needing to dedicate more of your own time?

Pretend you have an accounting or medical practice. For the most part, your clients do business with you because they trust you as a professional, and your business generally grows because of your relationship with your clients.

In fact, in these types of businesses, where expertise and relationships are the Unique Selling Propositions, clients can be easily lost if they establish a relationship with one of your employees who leaves your practice.

This is a problem, as these types of businesses are quite unscalable–where you can’t grow without permanently putting in more hours and face-time.

So what to do? How do you change a business model such as this to make it scalable? How do you grow your business in such a way where your time wouldn’t grow with it? Below are some tips on how you can accomplish this.

“Productize” your service

It is rare that at item is 100% a good or 100% a service. It is usually a mixture of both.

For example, you purchase cough syrup at your local drug store. While it may not sound like you are purchasing a service, consider the cashier bagging the merchandise for you, taking your credit card, and even the store stocking the cough syrup in the most convenient place.

The same is true with services: there is always a product element of a service. Consider an accounting practice. One service that an accountant performs for a business is preparing the financial statements. The service is the preparation, but the actual good provided is the financial statement itself.

Using these examples, try to target the part of your service that is most like a product and use that as a basis for scaling.

For example, a web designer offers the service of designing a site. The product they offer is a finished site. You can “productize” this service by designing web site templates and either selling these templates or working off of these templates when putting together a site.

If you choose to work off of the templates, the service of designing is de-emphasized while the product (in this case, a more manufactured service) is emphasized. You may not be able to charge the same amount as you would for a custom web design, but this service is completely scalable.

Make it uniform

If you want a service that is scalable, it must be uniform. Uniformity means something is easily repeated and duplicated.

You want your service to be something that is repeatable so the customer encounters the same outstanding service every time. Uniformity will make the service seem more reliable and thus more attractive to the customer.

Something that is uniform will not require you personally to service the client since you are turning the service into something routine.

Make it basic

The more simple your service is, the easier it can be repeated and duplicated.

Chances are that if the service is simpler, there will be less skill required to perform the service. It will also be easier to train employees.

If making a service more basic is difficult, consider dividing the service into its fundamental parts. Then, delegate these more simple parts according to the position and skill sets of your employees.

Make it technical

Making a service technical will make it easier to automate, outsource or delegate.

Something that requires creativity or judgement will require experience and talent. This is difficult to repeat and scale, so make these types of services more technical by turning creative or judgement elements into systems if you can.

Scale a service that requires a lower level of expertise than your own

If you have ever been to a dentists office, you’ll notice that usually a dental hygienist performs a lot of the routine work on patients.

Why is this? Because dentists are trying to make their business more scalable–they want to grow their business and their clientele without over-stretching their time.

They have dental hygienists perform this routine work because they know their level of expertise is well equipped to handle this kind of work.

They delegate certain work where appropriate, where their own level of experience is not necessarily needed until the very end where they check everything over.

Learn from this practice. Try to scale a service that can be delegated to someone with less experience than you, but can still perform the service without any problem.

This routine work is a great example of a scalable service. Certain personal touches and experience is removed and uniformity and technical skill is added.

The customer still has trust that the routine work is being performed well, but the more experienced dentist does not need to perform the work themself.

The overall customer experience must be outstanding

If you ensure that all of your staff is dedicated to outstanding customer service, your client will feel more loyal and trust to your overall business. They will want to stick with your business because you have established an image of reliability and great service.

Ensure that your customers cannot be stolen by departing employees

This is a big problem with service and professional businesses. You don’t want the risk of losing a client to an employee who leaves your organization.

In order for a business to be scalable without these kind of risks, your customers must feel loyal to your business and they must find value in what your business provides.

If they feel that your overall service is outstanding and unique, their loyalty will lie with your business before any single employee.

Take, for example, financial representatives at bank branches. You may have established a relationship with a specific rep at your local branch because of their expertise and good customer service.

However, chances are your loyalty to your bank is due to good products and outstanding overall customer service. If the bank rep were to leave tomorrow, you probably wouldn’t follow him or or to the bank they leave to.

This is because the customer has an established loyalty to the BUSINESS and finds value in the overall customer service the entire BUSINESS provides.

Thus you must ensure that your service is designed in such a way that your clients enjoy working with your individual employees, but they know the service they get will be uniform with whichever employee they work with.

Make it transportable

If the work can be done remotely (e.g. not performed face-to-face), it can be completed by anyone (or anything) qualified for the work. This means you can outsource the work or even automate it if possible.

If outsourced, you can have the work sent directly to your customer. All you have to do is relationship servicing to ensure your clients are happy with the service.

One benefit to this is that you can eliminate management costs as well as salary and benefits expenses.

Another benefit is that making a service transportable means it is much easier to make the service uniform. The customer will encounter the same level of customer service and service quality every time and both your time and the customer’s time is saved.

Automate as much as possible

Automation is almost always better than delegating or outsourcing. If your service is uniform and transportable enough where it can be automated, you have even greater profit margin and scaling potential.

Look for the opportunity to automate any part of the service if possible.

Step aside

Now that you have structures and systems in place to ensure that your service offered is scalable, step back to ensure that it can grow without you.

Allow others to manage the day to day affairs of the scalable services you offer, this way you won’t be tied down to managing more and more as the service grows.

Create a product based on your expertise

Why don’t you capitalize on the knowledge you have acquired in your industry? In addition to offering services, why not sell an actual good that is a product of your knowledge?

A perfect example of someone who has done this is Dr. Oz, who is frequently featured on Oprah. Dr. Oz has gained a lot of publicity (and money) over his “You” books.

Dr. Oz capitalized on his knowledge of the human body and health in a very unique way. His approach to bringing value to the customer is the perfect example of how he utilized his knowledge to create a scalable business. He knew that his knowledge would be best scaled by putting it in print, not offering medical services.

This can be done instead of offering a service, or in tandem with your scalable service. It can also be used to market your service-side business.

Market your service through a product

Should you decide to both establish a scalable service and sell a product based on your expertise, you can use these two together to market one another.

Your product can market your scalable service and your service can market your product. The two together can act as an excellent marketing combination to expand your business without demanding more of your time.

Are there any other ways you can scale a service business?

6 comments… add one
  • Timothy Tavarez February 16, 2009, 4:46 pm

    An excellent and extensive write-up pertaining to the many that deal with the difficulties of service-work. +Rep!

    • Matt Thomas February 17, 2009, 12:06 pm

      Glad to hear that you enjoyed the post, Timothy. Thanks for the comment!

  • Andrea >> Become a Consultant February 26, 2009, 12:16 am

    This is a well written post and it uses some very familiar and concrete examples. Most people can relate to your Dr. Oz examples in a way that they couldn’t relate to, say, a health management services consultancy!

    • Matt Thomas February 26, 2009, 11:58 am

      Thanks for the comment Andrea. I found that Dr. Oz was the perfect example of a service professional who was able to create a scalable business that didn’t need his continuing expertise in order to grow. Doctors, lawyers and accountants all face this difficult task of growing their businesses without stretching more of their time. Dr. Oz solved this problem by utilizing his expertise to create a very useful information product(s) and got a lot of publicity for it. Other service professionals can learn from this practice and package their expertise in such a way where it can be sold without them needing to be present for the distribution.

  • blackbv March 9, 2009, 8:13 am

    Thank you for your submission to the Small and Home Business blog canival.

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