MBA2097 Why You Should Start a Services Business + Free Ride Friday

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Visit Dell.com deals. Hey oh. Welcome to the $100 RMBA show. Powerful business Lessons delivered daily every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and today's episode is Free Ride Friday. On Free Ride Fridays we give away a lifetime membership to one of our programs. We're giving away Easy course over at EasyCourse co. It's a $500 course showing you how to build your own online course step by step. In 30 days you can win it for free. Just leave us an Apple podcast rating and review and you enter our weekly random draw. Listen in on Friday to see if you won. It's that simple. We announced this week's winner a little bit later in the episode. In today's episode you will learn why you should start a service based business. In my experience, I believe service based businesses are one of the best businesses to build, run and grow. Especially if it's one of your first businesses as an entrepreneur and I'll tell you why. Some of the biggest companies and brands you know are actually service based businesses. People need to get things done that's never going to go out of style, you're always going to have an opportunity to be able to serve new customers and old customers alike. I'm going to show you in today's episode why building a service based business is a smart idea. How it can lower your risk of failure, how it can improve your chances of success and growth, and how you can actually live a better lifestyle while making good money in the process. Let's get into it let's get down to business.

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Starting a service based business, or an agency as some people call it, is one of the safest and one of the most lucrative ways of making money as an entrepreneur. One of the reasons why I encourage people to look at starting a service based business business as their first business is because the risk is low. The number one thing that causes businesses to go out of business and to fail are too high expenses. Their expenses are way out of control and that's because they need to spend a lot of money to make the business happen to actually provide what they want to provide to the customer, the product itself. With service based businesses, your overhead is actually quite low. Meaning if for any reason you're having a slow month or you don't have as many customers as you would like, it's not gonna cost you an arm and a leg just to keep the doors open. The thing about service based businesses is that you get paid for the work, meaning you only actually pay for what it costs you to provide the work. When you have work, Let me explain. A neighbor of mine has a car repair service. It's actually a pretty cool service that brings the mechanic to your home or your garage, does the maintenance, does the fixing and then goes away. It could be a flat tire, it could be changing the oil, it could changing the spark plugs, whatever. The point here is that he has a team of freelance mechanics, mechanics that are on call ready to do the work and they have an hourly wage for that gig. If they don't have a customer, they're not going to actually call upon this mechanic. Therefore they don't have the expense of the mechanic in today's day and age. You don't need to have full time staff to have a service based business. We're in the gig economy where people are willing to be a little bit flexible with the relationship, with the job itself, but of course they're going to charge a little bit more. That's okay. You're going to pay somebody with a higher hourly wage, but you're only going to pay them when you have work, when you have business. So in most cases, especially with online businesses, your only regular expense is your own salary, right? Or your website costs, which is, you know, dollars every month. Maybe some of the software you use to create the service or provide the service, whether it's like maybe video editing, softw, or maybe it's graphic design software, but all these expenses are minimal. I remember one of my first service based businesses when I became a full time entrepreneur was I was doing graphic design, I was doing website design, blog design and development for my clients. At a certain point I couldn't do all the work myself, so I started to hire freelancers to do the work. And again I would charge the customer more than I am being charged by the freelancers so that I can make a profit.

It's called arbitrage.

Really what the customer paying for in this situation is me dealing with them, giving them great service, being the concierge and the middle person to make sure we deliver the product or the project on time. I had a few pieces of software that I was using to do this to help my freelancers out. Some accounting software, some invoicing software, and that's pretty much it. So as you can see, your overhead is quite low, therefore your risk is low. When you're having good months, you can save those acorns so that you can pay those expenses when things are not as busy. The second reason why a service based business is great for a new entrepreneur is that you can control your scale and your growth. Some businesses you don't have control over that like a software business. If your software starts to get popular and you get a lot of users, you can't just close your doors. You've got to keep serving your customers. You got to start hiring people quickly. You got to start hiring customer service and engineers and that can get hectic and you can make mistakes when you're rushing, make bad hires. But with a service based business, people are expecting you to have availability, understanding that they might have to wait. And in fact, if you tell a customer or a client, hey, I'd love to take on your work, but we don't have any availability until another two or three months, you become more desirable, like this person's sought after and most of them, in my experience wait and they actually put down a deposit so they can reserve that time. So if you feel like things are getting overwhelming, you can pace yourself by having a waiting list so that you can take the time you need to hire, you know, your next freelancer or somebody to help you out, like an assistant to manage the process. This also applies to your free time. You could schedule your holidays throughout the year to make sure you have time to rest and recharge and you're not taking client center client work. You can have less pressure on yourself and enjoy your free time and the fruits of your labor with a service based business because you can again turn up and down the volume and plan your holidays well in advance. Another reason why I'm a big fan of service based businesses is that the real value of your business is your systems and yes, your actual service. What you provide your customers have to be high quality and really wows them to the point where they recommend other people to you. But the point I'm trying to make here is that once you build a system for your service based business, setting operating procedures, how everything's done, what you're expecting from each person on your team, how everything is done in what order, who to go to if they have a question, deliverability standards, once you've documented all this stuff, it's really just plug and play. Most service based businesses don't have a hard time with talent. You can easily find people to fill in the spots. You could replace people if they leave you and they jump in, they read the sops, they know exactly what they have to do, how to do it, and how to make sure they're working up to the standards of your business. So you're going to spend some time building out your system. In the beginning, even if you're doing all the freelance work, all the service work that you're providing your customers, because it's going to be absolute gold for you. And when you get results from your system, you start relying on it more and you feel like, hey, I'm not the roadblock here, everybody can do their job without asking me questions. Another reason why I love service based businesses is that they're actually high value businesses. If one day you want to sell your business, you have an incredible amount of value, have incredible asset to sell, you have a client list, you have reoccurring revenue, you have a system, you have great team members, or freelancers that you work with on the regular. Another reason why they're so high value is that they're not volatile, right? They're stable. Some of the best businesses out there are not cool or sexy. Law firms, plumbers, electricians, hair salons, you know, massage therapists. These are all businesses that have been around forever because they're stable and that has value. Gas, snacks, tolls.

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To wrap up today's lesson, if you're starting out as an entrepreneur, I believe a service based business is a great way to get started because all you need is your skills. Whatever you could provide. That could be writing, skills, that could be design, it could be craftsmanship, whatever it is, you can start with you as the provider. But don't get stuck in the stage. Start building your system and start hiring some freelancers to take some of your gigs off your plate so you can take on more customers and more customers and that's how you scale, build a reputation yourself, deliver great service, get testimonials, build a presence online, blog, work on your SEO. You'll be surprised how easy it is to rank for service based businesses, especially locally by doing just a little bit of SEO work. Bar is very low so you're going to be able to compete by doing very little. People need to get things done. They want it done for them. This is why service based businesses still live on and will continue to do so. Thanks so much for listening to the $100 NBA show. Today's episode's not over though. It's Free Ride Friday. Let's see who won this week's Free Ride. And the winner is Mike A Terra. Mike Atera is from Cyprus and they give us a five star review saying just what I needed. This podcast is easy to understand and somehow almost every episode that comes out helps me solve a problem I encounter. Thank you so much and never stop being amazing. Thank you Mike for that great review. Your mission is to email me over at Omar MBA Net so I can make sure to hook you up with the lifetime membership to EasyCours at EasyCourse Co retails for $500 for lifetime access. But Micah just won it for free. You can win it for free too. Just leave us an Apple podcast rating and review wherever you are in the world and you enter our weekly random draw and you're in the draw until you win. Just listen in on Friday just like today to see if you won. Before I go, I want to leave you with this. If you're going to choose a service based business, choose something you love, you're passionate about, you just enjoy doing anyway, you do it for free. Then every day is a pleasure. Yeah, there's some admin, some business work and some marketing, but eventually you're going to have some people on your team to help you do that. And you could just focus on your craft and focus on what you love, producing. Then you don't work a day in your life. Thanks so much for listening to the show. I'll check you in Monday's episode. I'll see you then. Take care.

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