How to Grow a Service Contractor Business
Most service companies start with self-employment. You have a talent, craft, or service that you are willing to provide labor for in exchange for money.
At some point, you have more business than you can handle on your own. So you hire someone to help you with the workload. Now you have employees and need office staff to manage workflow.
The trades are the perfect service business. Skilled labor and specialized equipment make jobs difficult to DIY or outsource. The cost of starting a new company is low.
There is no luxury to a working toilet. Unlike pet sitters or house cleaners, the trades are essential.
Congratulations if you have started a trade service company. You’ve got work as long as you want it. Service businesses may be in high demand, but that doesn’t make them easy to run, manage, or grow.
I’d say that growing a service business is one of the hardest things I’ve ever done. Yes – I’ve been there. I know the struggle.
There is no one correct or perfect way to grow a service business. Too many factors are at play for there to be a single set of rules. Every situation, location, service type, and customer base are a bit different.
At some point, instinct and personal knowledge have to take over.
When you are busy working in your business, it is difficult to take a step back and consider the big picture. That’s where advice articles like these come into play. They can help remind you.
Use this “how to grow a service business” guide as a push in the right direction. Warning – you will still have to think for yourself. These are not easy answers.
Now, this is not a “how to START a service business” guide. I do have that though! You can find it on my blog, along with lots of other tools that get much more specific than we will get here.
How to Grow a Service Business Lesson #1: Customer Service is the Most Important Thing
You might be rolling your eyes. Of course, customer service is important. That isn’t enough.
It is THE MOST important thing.
Customer service is more important than the quality of work you do. Customer service is more important than the price you charge. Customer service is more critical than your branding.
Customer service is more important than any other activity you do in your business.
Yes, your work needs to be up to the task. Yes, competitive pricing helps. Yes, your branding should be memorable and fit your target market.
Customer service is the one true king that rules them all. It is not overstating it when I say customer service is the reason people do business with you. The best customer service means their priority is yours.
Excellent customer service can mean different things to different people. That is why you have to understand your customer. You have to know what they crave.
Some customers want a reasonable price. Fast service. Flexible appointment times. Others crave white glove service.
Customers will tell you they want it all. That is true, but there is a prioritization. If forced to, they could rank their customer service desires top to bottom.
It is crucial you understand which service opportunities are the best fit. Focus on those priorities and execute with consistency. These are your cornerstone service principles.
Mastering customer service skyrockets the chances of your service business succeeding. Figure this out early in your business. It doesn’t cost you anything but will pay huge dividends.
Understand the kind of customer that connects with your cornerstones. While you are at it, your employees should align as well. That provides consistency of service.
If you aren’t sure how to decide on your cornerstones, start listening. Listen to your favorite customers first. You want more of them.
Next, understand where your competitors are failing the market. Find a pet peeve that you can exploit. Reviews are your secret weapon.
Your online reviews are a great start. Positive feedback highlights your strengths. Negative reviews help you understand weaknesses.
Then move on to your competitors. Understand where they excel. Understand where they fail.
Their failure is your opportunity.
Make sure you can deliver before you make promises. Customer service is a promise to the customer.
That’s how you build a brand. It’s not a logo. It’s more than a logo.
Decide what you are going to do an become incredible at it. Customer service is now your secret weapon.
A customer service focus will help you grow faster, with fewer issues, and better success.
How to Grow a Service Business Lesson #2: Systematize Everything
I’m not a big fan of rules in my life, but I love them in my business. Creating a control and a workflow for handling every task in your business is the key to growth.
Peter Drucker (the father of modern management) said, “The best way to predict the future is to create it.”
When you discipline yourself – and later your employees – to follow a system you are designing the future. You are determining the outcome with practiced and measured behavior. Shaping the future means anticipating needs, seeing opportunities, and focusing effort.
When growing your service business, time is your most valuable asset. There will never be enough of it. Building your business means multiplying the work getting done.
You can’t clone yourself, so multiplying means hiring.
If you want to keep consistent quality, a system is crucial. No employee will ever do it quite as good as you, but a system with clear instructions is the closest thing. It makes training, accountability, and measuring success that much easier.
McDonald’s rocketed to popularity because they had a system. (If you haven’t watched The Founder, I recommend it.) Their method allowed them to provide customers with an improved, consistent experience.
Employees prefer to understand your expectations. It allows them to feel they are succeeding in their jobs. People may not like rules, but they crave them.
Rules, standards, and quality demands don’t have to be inflexible or rigid. Your employees aren’t robots. They need room to think for themselves.
Let’s pretend you are creating an appointment booking system. That doesn’t mean giving your CSR a script to follow. Instead, it is setting some ground rules like:
- Speak with a smile. Research shows that people’s voices sound friendlier when they smile!
- Ask follow-up questions to understand the customer’s concern and appointment request.
- Repeat appointment details back to the customer. Ask them for verbal confirmation that the details are correct.
These simple guidelines create an expectation for your employee. If they do not fulfill their obligation, you have a benchmark to hold them to.
Follow-up is key to the success of systems. Another Peter Drucker quote is, “What gets measured gets managed.” If you create a policy but don’t hold your employees accountable – you have wasted everyone’s time.
Even after creating these rules, you still have to manage employees.
How to Grow a Service Business Lesson #3: Hire Smart
There is no getting around hiring in a service business. People are at the core of what we do. Until robots take over Earth, that is.
Employees will forever be your greatest asset and your greatest frustration.
If you haven’t hired employees yet, nothing I can say will prepare you for how time-consuming it is. I mean that with love for every one of my employees.
Hiring takes forever. Training is draining. Managing people is frustrating at times.
I’m going to dig in here because it is worth understanding this issue. As a service business, you are a people company. Learning lessons about hiring and optimizing employees are crucial to success.
Be clear about the position you are hiring.
Define the role. A clear job description is the first step in setting up a potential new employee for success.
Role definition isn’t a problem with field workers. Their job is straight-forward enough.
Office workers are where the problems tend to happen. Too many small service businesses expect their office staff to be a one-stop-shop. They get asked to perform every administrative task known to man.
I can understand why this happens. As an entrepreneur, you are comfortable wearing many hats. You expect an employee to have the same mindset.
Don’t get disappointed. Specialization is often the sign of a good employee – someone who wouldn’t be able to work for themselves. They could make a great long-term employee.
Trying to find a “generalist” who can answer the phones, manage your marketing, bookkeeping, pull permits, keep up with your scheduling, pay your taxes, order parts, maintain your website, and on and on … is like trying to find a unicorn.
Even if you find someone willing to do everything, they won’t do it well.
Sure, they might understand or grasp the basics. Think of it like a plumber doing electrical work. They won’t burn the house down, but they aren’t experts.
Asking for the moon is an easy way to set your office up for failure.
Most small businesses can’t afford to hire specialists for every little thing. I get that. You don’t have an HR manager when you have three employees.
That’s why I’m a big fan of outsourcing these specialists office tasks.
Outsourcing allows you to hire a specialist for a fraction of the cost.
Be careful what you outsource. Start slow and build trust. Learn to manage remote workers.
I recommend starting with things that are not customer-facing. Website management, bookkeeping, marketing, email, and mail monitoring, invoicing, bill payment, and collections. These tasks – and more – are easy to outsource for a fraction of the cost.
Take your time finding the right person.
Don’t take the first person who lands in your lap. Especially if that is a friend, family, or spouse. Sure, they might be cheap but be very careful before hiring friends or family.
(This is coming from someone who works with their entire immediate family. Including my spouse.)
As small business owners trying to a grow a service business, we get tempted to hire the first warm body. These people are going to be the face and voice of your business. You will have to work very closely with them.
When we work with people we know, we tend to bring a lot more of our baggage to work with us.
Managing people’s behaviors is one of the hardest parts of owning a service business. That goes back to service being a people business. It’s unavoidable.
Communicating with people and maintaining relationships is hard! Sure, it comes more natural for some than others. Don’t underestimate the struggle that this creates for most growing service business owners.
Accept that Mistakes Happen (And May Be Your Fault)
People are our product. Our product comes with natural defects – it’s called being a human. People make mistakes (including you). That means you will have to handle those mistakes sometimes.
It is difficult to learn how to lead people with grace.
If you are good with people, consider yourself ahead of the game. If you worry that leadership is something you will struggle with, look for a mentor or coach.
My unpopular rule of thumb is that when an employee makes a mistake, I must first ask – what did I do wrong? Except in the most toxic situations, an employee isn’t sabotaging you on purpose. That means they need better training, systems, or understanding of your expectations.
Employees can not read your mind. Failure to follow a rule or expectation you did not communicate is your fault. We tend to make assumptions, and those are very dangerous.
Take responsibility for your role as leader.
Growing a service business is fun but a wild ride. Remember that there will be ups and downs – that’s entrepreneurship. You had this crazy idea that you could do this on your own and you have proven that you can.
Now for the hard part. Growing a service business comes down to these three things:
– Connecting with an ideal customer and knocking their socks off.
– Getting your ideas and visions out of your head
– Leading people in the image of your business.
It’s about learning how to multiply your success. That’s a tremendous opportunity and a huge responsibility.
Can you build a service business and replicate the success you’ve had on your own? That’s not an easy question to answer. It isn’t for everyone.
I’ve got faith in you.
Author & Speaker
Anja is the creator, writer, and speaker at Tradebiz Toolbox. She has a long and storied history with small business development but cut her teeth on the contractor industries in her family's plumbing company.