Wednesday, January 6, 2010

Service Oriented Businesses

This blog post will be part of a series of posts which describe various common business models.

Service Businesses: This is a huge category so I'm going to generalize a lot. Basically, you provide a service and someone pays you for it. One year when I was in college I paid my December rent at the beginning of the month and had only $22 left in the bank. That meant I had no means of buying Christmas presents for anyone, and no means of even driving home for Christmas because my car was out of gas. $22 meant I would barely have enough to eat for the month. But one thing I did have was a lot of snow. I found a snow shovel for 9.99, and walked all over town looking for driveways that were still snowed in. On that very day I made over $100.00. That was good money, but it still left me pretty cheap on Christmas gifts, so I prayed for more snow. Yeah, I actually did pray about it.
I got two more storms in the next two weeks, skipped a few classes, and made a lot more. My first day of shoveling I had to walk all over the place looking for driveways that were not shoveled. I was friendly with my customers and asked if I could come back next time it snowed. I did a thorough shoveling job, and they told me to come back. This saved me several hours of hunting for clients the second time it snowed. Thats how service businesses work. You get paid for providing a service. Do a good job and be a friendly person, and you will get easy repeat business. I still have that shovel. A ten dollar investment earned me several hundred.

I knew a 19 year old who started a lawn-mowing business when he was 14. By the time he was 16 he had bought three brand new riding mowers and had a list of over 100 clients. He hired out his friends and made over $40,000 for himself each summer from when he was 17 through 19. Last I heard he was out of high school and was planning to into a year-round business of mowing, leaf raking, snow shoveling, and whatever else he can get into. If you work hard you can get a long list of clients quickly. You don't need a sophisticated plan and a business degree.

The service model is a pretty inexpensive way to start a business. All you need is your own skills and maybe a few basic tools. Its a good way to make some money that you can use to either reinvest in your business, or use to start a different one that requires more up front capital.

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...