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Is Scaling a Service-Based Business Even Possible?

October 12, 2022

Scaling a service-based business is notoriously difficult beyond a certain point. But it can be done with the right approach.


I’M PROUD OF MY BUSINESS.

I bet you are the same?!

As service-based business owners, we take pride in the quality of our work.

The thing is, in the early stages of our business journey, being consistent in that quality delivery is easy... because it’s just us doing the work.

But word spreads, and clients keep knocking on our door. The pipeline fills up. We get busier, and as we go, we figure out the best way of doing things. And still ... we get busier.

Until we get to the point where it’s time to hire our first team member. And still more clients want to work with us. So we add team member number two ... and three.

AND THEN WE HIT A CEILING. 😢

Because what worked when you were a one-man band no longer does the trick.

You’re flat out, putting out fires left, right and centre. You’re also annoyingly distracted with quality checks because service has become inconsistent, communication is limping, and there is no end to the managing staff and resources.

Let’s face it, you’re working all hours of the day and the night.

But the worst thing is: despite more clients coming through the door and all your hard work, PROFIT MARGINS ARE DOWN!

You throw your hands up in the air and you pose the question:

IS SCALING A SERVICE-BASED BUSINESS EVEN POSSIBLE?


The Unique Quirks Of A Service-Based Business

When you have an agency or a service-based business, we have this idea that we’re in the business of selling our skills, knowledge and experience in exchange for money. And while that is not wrong, what we’re really selling is our time!

And that is where the problem arises.

See, time is a limited resource. Once you run out, you have to add more resource (a new team member), which increases the amount of clients you can serve, but also your expense ... with the above effect on your profit margin.

This is why the service-based businesses model is notorious for having a really low percentage profit margins. (I’ve seen as low as 5%!) To have a sustainable business, your profit margin should be at least 20%. 😲

When we face declining profit margins, the typical response is to scale back the expenses OR to increase prices. Reality is... you can only do that for so long.

And that’s where businesses hit the ceiling.


Scaling For Growth

BUT THERE IS ANOTHER WAY YOU CAN GROW YOUR BUSINESS!

I want to introduce you to the concept of scalable growth.

It means growth that can be scaled AND sustained without a negative impact on the quality of service you are delivering, while maintaining a healthy profit margin.

Scalable growth is not a strategy, it’s a not a tactic, it’s not a growth hack. It’s a fundamental approach to growing a profitable service-based business.

And while that may sound very vague now, we’ll flesh it out in future podcasts. So bear with me for now.

The thing to take away at this point is that scaling a service-based business with sustainable growth in mind means stepping back, rethinking everything you do, re-focussing, and then step by step putting the fundamentals in place so your business is ready to cope with growth without collapsing under the pressure.

It comes with a warning, though! It is NOT a quick-fix. 30 days will not do the trick. You may even need to take 2 steps back to move 10 steps forward.

But if you’re willing to go on the journey, it can also be a lot of fun. Because when you focus and persevere, it will take your business to the next level. And I will be there to guide you!

So ... what does this step-by-step approach that enables scaling for growth look like?


3 Steps For Successfully Scaling A Service-Based Business


Step 1: Commitment

The first step is critical. Let’s face it, we won’t get anywhere without dedication and determination!
Unless you prioritise the scalable growth of your service-based business, you will unwaverly get distracted by other tasks and put it off. Committing equates to allocating time each and every week to do the work towards scalable growth.
No excuses! NONE!


Step 2: Core Foundations

Next, you need to go back to the canvas; the vision you have for your business, and the core values that underpin it. You need to revisit the question of what differentiates you from your competitors and figure out your ideal client. Finally, you need to know your biggest revenue streams. Pour all this into a single elevator pitch.

This is the information that will get you started.

Step 3: Get Your Service-Based Business Ready For Scalable Growth

Next we need to do the foundation work in 3 different areas:

1. The Systems

  1. Integrate The Systems. Usually when we introduce a new system, they fulfill a need. Initially, we don’t think about integration. But as we grow, our data gets fragmented and information gets siloed into different areas, making it harder and more time-consuming to run your agency. We no longer have a good overview. So our first job in preparation of scaling a service-based business is to make our systems cohesive and ‘talk’ to one another. 
  2. Are Our Systems And Processes Efficient? Ask yourself if you are documenting your repeatable processes. You may be aware of them, but is your team? And if the team is aware, do they follow the guidelines or instructions? If the answer is 'no' to any of these questions, there is some work to be done in this area. 
  3. Look At The Service Packages You Offer. Customising the service package for every client who walks through the door is the ultimate time gobbler. Personalisation-Yes! Customisation-No!
    If customising rather than personalising, is what you’ve been doing, it’s time to look at ways to create service packages that are ‘modular’. Think about how you can target the needs of your clients so they can pull from the service packages as they require. Each package need to have its own streamlined and repeatable process.

2.The Team

  1. Create An Accountability Chart. If you haven’t got an overview of responsibilities for the pre-packaged services, it’s time you create one (or update the one you have). It doesn’t mean having a separate person in every single role. It means identifying roles you need in your organisation, that can be (re-)allocated as you are scaling a service-based business.
  2. Recruitment And Onboarding. Starting from the needs that arise from your accountability chart, it’s a lot easier to recruit the right people for the right role with the right cultural fit. Of course, this also brings up the need for systems for recruiting and onboarding
  3. Leveraging Talent. Have you ever considered how you leverage the talent inside your organisation? Do you have clear expectations? What about regular team meetings, are they set in the agenda? Do you check in with your team on an 90 day cycle or less?

3. The Clients

  1. Marketing strategies: If you haven’t got a working marketing strategy for your service-based business in place, it’s time to do some work in this area. Check if it attracts your right-fit clients in a repeatable way. 
  2. Strategies To Feed The Sales Funnel: Next, it’s important we also have a repeatable process for attracting clients and moving them through the sales funnel. (Don’t forget a process that assesses whether the leads coming in are a right fit for the services you offer.) 
  3. Processes For Clients: Once you have the signature on the dotted line, you need onboarding processes and regular check-in points with your clients. 

That’s it! Is scaling a service-based business even possible? With the right approach it is!

Once these core foundations for scalable growth are in place, your business is set-up for the journey ahead.

We already mentioned it will take a while to work your way through these steps and I’ll repeat it here. (In my experience, with the right commitment, it is do-able over the course of a few months.) But it’s worth it to take the time and to do it well, because working on the scalable growth approach allows you to continue to grow your service-based business AND increase profits.

SO... Are you interested in scaling for growth, but still not sure where to start?

I‘m your gal!

  • Are you a service-based business owner or agency owner?
  • Do you generate about $8,000-10,000 per month?
  • Do you have a small team?
  • Are you ready to take your agency to the next level? 


Book a FREE 60 Minute Scale Strategy Session with me! Sandrajulian.co/scale

Before the meeting, I’ll ask you to do an Agency Scale Scan. This will help us gauge your current business situation.

During the 60 minute call

  • We’ll look at your current situation and determine what is working and what needs some attention. 
  • We’ll uncover the number 1 bottleneck that is restricting your growth and holding you back.
  • We’ll develop a 3 step growth plan that you can do now and will set you up for the next step in your business journey.

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