How to Scale Up a Service Business

When you read articles on scaling businesses, they are very often aimed squarely at businesses that sell products. They talk about how to reduce the overheads of manufacturing, how to sell to a wider audience and how to automate manufacturing. If you have a great product you can set it up to sell practically on its own; creating passive income and a highly repeatable business model that’s easy to scale.

But what if you provide a service? What if you’re a hairdresser or a writer? What if you’re a web designer?

In this scenario as a sole trader, your only option will be to provide more work in order to get more pay. Eventually you’re going to come to the limit of how much output you’re capable of producing.

Here, we will look at how you can specifically scale up a business as a sole trader providing a service.

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The easiest way to scale a service business is to hire someone else. This might involve hiring staff, or it might just mean working with a freelancer or white label service.

Either way, you are now going to pass on the extra work that you can’t complete to that new employee.  Ideally, your new employee will bring in more money, than they cost you. Presto – you’ve just added to your base rate.

What’s great about this is that the more people you hire, the more you can add to your earnings. What’s more, you can eventually start to lower your rates as you have multiplied your profit margins several times over and this will mean it’s even easier to increase your turnover and revenue.

Franchising

Another option is to take what you’ve learned and create a franchise. Here, you rent out your experience, your brand and your list of clients to someone else and thereby profit from their success. This is the model used by the likes of KFC and it has worked very well for them indeed!

Productizing

Another option is to try and productize your business. You now understand your service better than anyone, so why not see if there’s a more hands-off way you could package? If you provide golf lessons, could you create a golf eBook or a “Learn to Play Golf” video series?

The above three options are great (but not the only) ways a service provider can help scale their business.