Want to learn how to start a service business? Then this is your guide!

We’ll go over the steps to set up your own service business.

Plus, I’ll share my advice on finding the most profitable service businesses.

Ready to start learning?

Let’s dive right in!

You’ll learn:

• What a service business is 
• How to start a service business

What is a service business?

Are you unsure what a service business is?

It’s pretty straightforward:

Instead of selling physical or digital products, you offer your:

• Skills
• Expertise
• Time

This could be anything from cleaning houses and providing massage therapy, to teaching skills like yoga.

That said, ideally you want to jump into a business that’s easy to start and can bring in a lot of money.

That’s why coaching, consulting, or freelancing are the best choices.

I’ll explain this more below, but in short:

With the right skills, you’ll be offering a high-value service. So that you can charge premium prices.

Plus, getting started doesn’t require much — you don’t need lots of equipment or an office.

Now, let’s cover exactly how to start a service business.

How do you start a service business?

There are nine key steps to set up a service business.

Let’s take a closer look at each one.

Find a business idea

To kick things off, you need to find your business idea.

Your idea doesn’t have to be revolutionary — but it does need to be in demand. 

How do you land on a good business idea?

Use this strategy:

• Choose a business you can start right away
• Pick a business model with a high profit margin

And the reason why I say coaching, consulting, or freelancing are the best choices is because they tick both boxes.

You turn what you already know into a high-value service.

This means you can increase your revenue quite quickly.

And to get started, you often don’t need anything more than your laptop.

For instance, I built a six-figure online coaching business from scratch — without any fancy setups.

And many of my students are currently doing the same.

Take Ruby, for example.

She used to work for big dating sites like eHarmony. She turned the insights from her previous job into a thriving relationship coaching business. And she now earns six figures helping ambitious men find more dates.

Again, no fancy equipment was needed whatsoever.

Are coaching, consulting, and freelancing the only options?

No.

Many services businesses can be tweaked for better profit margins.

However, some ideas will always require more initial investment.

Think of:

• Massage tables for massage therapy
• A kitchen setup for gourmet catering
• Gardening tools for landscaping
• And so on

This means those businesses will always be more complicated to set up.

Because besides your skills, you also need specific equipment.

Plus, unless they’re high-value skills, you’ll make less money and need to invest more of your own time. 

Not yet sure what your business idea is?

Then take a look at this list I put together for you with the most profitable service business ideas.

Whatever your business idea is, though, you won’t get far if you don’t know how to reach your target audience.

That’s where market research comes in.

Research the market  

Doing market research early on sets your business up for success.

It helps you:

• Figure out if your business idea is profitable
• See how your idea fits into the market
• Pick your niche
• Understand your audience
• Learn what has and hasn’t worked for others

Combining your skills with a specific market demand is where you find your niche.

The right niche helps you target people who really want your service. 

It means:

• Easier marketing
• Less competition
• More money because you’re offering exactly what some people are looking for

Just reading about your market isn’t enough, though.

You need to TALK directly with your target audience.

For instance, you can:

• Talk with people you know
• Join online forums and groups
• Connect on social platforms

Direct conversations with your audience show you things that surveys and data alone cannot. This gives you a competitive edge.

This hands-on approach helps you figure out:

• Who your target audience is
• What challenges they face
• How you can help them

Market research is an ongoing process. Markets always evolve, and so do the needs of your clients.

But once the initial information is in, it’s time to set goals based on what you’ve learned about your market.

Let’s look at that next.

Set realistic goals

Step three is setting business goals. 

Why should you work with goals?

Business goals help you:

• Measure your growth
• Adjust plans
• Stay focused

Ultimately, clear targets lead to real results.

So, how can you set up great business goals?

Here’s a simple three-step breakdown:

1. Big goal: Start by asking yourself what you want to achieve. This big-picture goal sets the direction. In my case, my big goal was to have a true Freedom Business. I wanted to live life on my own terms so that I could spend more time with my loved ones.
2. Milestones: Next, lay out milestones. Each milestone should bring you closer to the big goal. For instance, the milestones for achieving a Freedom Business could be: 1) Getting a steady client base, 2) Automating business operations, and 3) Expanding your business.
3. Subgoals: Then, split those milestones into bite-sized goals. For the ‘automation’ milestone, you could use these subgoals: 1) Identify core tasks, 2) Systematize routine tasks, and 3) Use automation tools.

To dive deeper into how to set the right goals, watch this video I’ve created for you:

The key is to work with goals that are both ambitious AND achievable.

It can be tempting to aim very high right away. But this only sets you up for disappointment.

And yes, I’m speaking from experience here.

Here’s the thing:

Setting goals without a plan to achieve them means you’re working with dreams — not real goals.

A business plan can help avoid that trap.

But what matters much more is focusing on the right things.

Let’s cover that next.

Create a business plan

Do you need a business plan right now?I know that it might seem like you need lots of complicated plans or marketing tactics.

But having a successful business doesn’t come down to creating a business plan. 

With the right strategy and skills, anyone can build a business — YES, even without a business plan.

What matters most is that you focus on the right things.

In other words:

What results do you need right now? And how will you achieve them?

In the beginning, the main result you want is finding your first clients.

This is where your market research comes in handy because it shows you the best way to reach your target audience.Ultimately, that’s what Pareto’s principle is all about. It suggests that 80% of your results come from 20% of your efforts.

In other words: A small part of what you do will bring most of your success.

Identify those actions and zero in on them. (See step eight for advice on how to get your first few clients.)

That said, if you feel like a business plan will give you clarity, go for it.

I’ve already written articles on:

• How to write a business plan
• How to create a coaching business plan

The key is to keep it simple and not spend too much time on your business plan. (A one-page plan is more than enough.)

Next up, let’s look at how to manage your business finances, which is a big part of keeping your business going.

Understand your business finances

As mentioned earlier, service businesses are relatively cheap to start. Especially compared to a product business or a startup.

And if you want to work as a coach or consultant, you often don’t need anything more than just your laptop.

That’s another reason why these business ideas are so profitable.

For other businesses, like cleaning or gardening, you must buy equipment first.

Figure out what the exact costs will be BEFORE you jump into your new business.

Again, the best business ideas are those that you can start without a lot of costs.

With coaching, consulting, and freelancing, you use your existing skills.

That way, you don’t need a loan or funding. This lowers your risk a lot.

However, if you want to start a business that’ll require more upfront investment, take a look at SCORE’s webinar on SBA funding programs.

Set up your business 

Not sure how to get your business off the ground? Then this checklist of mine will make the process easier.

But in short, here are four important steps:

• Choose your business structure: For new entrepreneurs, the go-to options are usually a sole proprietorship or a limited liability company (LLC). Sole proprietorships require minimal paperwork. LLCs, on the other hand, need a bit more effort to set up. But they offer benefits like legal protection and potential tax advantages.
• Register your business: Registering your business is sometimes as simple as telling your local or state government your business name. If you’re operating under your own name, you might not even need to register at all. However, skipping registration means missing out on legal protections and tax benefits.
• Look into licenses and certifications: Check if you need any licenses or certifications BEFORE you start offering your services. It’s often not required for online businesses — unless you’re in fields like medicine, accounting, or law. Plus, always double-check for local requirements, like a home business license, an occupational permit, or a DBA (“doing business as”) registration.
• Get business insurance: Certain service businesses might need insurance to protect against potential risks. Some examples are personal training, massage therapy, or running a cleaning service.

With the basics of setting up your business covered, let’s explore how offering packages can boost your business.

Create a service package

Instead of charging by the hour, offer complete, result-focused packages.

Here’s why this approach works:

Charging hourly might seem straightforward, but it limits how much you can earn.

Much like a regular job, you’re trading your time directly for money.

But with packages, you highlight the results and growth your clients will achieve.

Packages also provide a clear plan of action.

Your clients know exactly what to expect and when. This makes the whole process transparent and structured.

Of course, working with packages is not possible for all service businesses.

Services that deal with emergencies or require on-the-spot solutions often need to stick with hourly or per-job billing. That’s because the work is so unpredictable and varies greatly from one call to the next. Some examples are emergency plumbing or on-call IT support.

If you can, though, always group things instead of working by the hour.

How do you do that?

Here are three examples:

• Create a three-month coaching or consulting package
• Bundle ten massages at a slightly discounted rate
• Put together a full house renovation deal
• Offer a month of home cleaning services as one package

This strategy keeps your marketing costs down.

When you sell packages, you’re not just selling a single service — you’re selling a whole experience or result.

This means you can attract clients with the promise of a TRANSFORMATION.

That’s much more appealing than a one-time service.

And because clients are committing to more from the start, you spend less time trying to get more clients.

If you’d like to learn more about creating your first package, then this video will help you.

It focuses on coaching packages, but the information can be applied to different service industries.

With your packages done, you’re ready to offer great value.

Now, all that’s left is finding your clients.

Let’s dive into that next.

Find your first clients

If you’re still learning how to start a service business, finding your first few clients can seem like a big challenge.

But good news: It doesn’t have to be complicated.

Here are three great options to find your first clients:

• Your network: Your friends, family, or acquaintances might need your services or know someone who does. Reach out to them, and let them know what you’re offering.
• Social media: With the right market research, you’ll know where your potential clients are. Be there too and offer them value. Engage in conversations and answer questions. This is a great way to build trust and credibility. It gives potential clients a taste of what you can do for them. The important thing is to be part of the community. If you’re only there to sell yourself, people will pick up on that.
• Word of mouth or referral: People trust recommendations from those they know. Encourage happy clients to spread the word about your services. Plus, referrals often bring in clients who are a great match.

To get your first clients, you actively need to put in effort.

But it won’t always be like this.

As your credibility and reputation grow, you’ll notice more and more people coming to you.

Plus, with each happy client, you’ll also have a new glowing testimonial.

Leverage these to get even more clients.

These testimonials are powerful; they’re like personal recommendations that tell potential clients,

“This could be you.”

For more tips on landing your first client, watch this video: 

Your happy clients are your best marketing tool.

That’s why getting clients should come before heavy marketing efforts.

Market your business

Once you’ve got your first paying clients, it’s time to grow your marketing strategy.

Great marketing brings in a steady flow of clients.

But how do you go about growing your marketing?

The trick is to double down on what’s already shown success.

Whether it’s:

• Paid advertisements
• Search engine optimization (SEO)
• Email campaigns
• And so on

Concentrate on one or two marketing methods at a time.

Because if you zero in on what works and slowly do more, your business will grow the right way.

On the flip side, trying to do too many marketing strategies at once leads to feeling overwhelmed and seeing little to no success.

For example, in the beginning, I focused on Facebook groups and paid ads.

Now, I prioritize YouTube and SEO.

This focused approach has allowed me to grow my revenue to multiple seven figures — without a massive social media following.

After all, my goal was never to increase my “followers,” but to create a true freedom business.

And with the right strategy, there’s no reason why you wouldn’t be able to do the same.

Next steps 

There you go! You now have the basics on how to start a service business.

Running your own business comes with many perks.

But of course, there’s a lot more that goes into running a highly successful business.

If you want to learn more, then check out my FREE PDF that breaks down, in simple steps, how to use your current knowledge to build a thriving online business.

Read more:

Overcome Your Fear of Starting a Business

Finally Go From Employee to Entrepreneur

How to Start a Successful Coaching Business