Blueprint for Success: Key Considerations Before Expanding Your Small Service Business
Your business is doing well, you have a loyal customer base, a good reputation, and now it’s time to expand. Marketing is the logical next step and will get your business more visibility, more leads, and ultimately help you generate more revenue.
However, what many small business owners learn the hard way is that unchecked growth can reveal the cracks in your business’s foundation and ultimately prove to be a liability! Don’t let the siren call of short-term gains get in the way of your business’s long-term success!
Before increasing your marketing efforts, it is absolutely essential to ensure that your business is ready to handle the influx of new customers without diminishing your quality of service. This article will look at the common pitfalls of rapid growth and discuss what you can do to prepare for an upcoming business expansion!
Laying the Groundwork: Essential Steps Before Scaling
We’ve seen firsthand how rapid growth can harm small businesses if they aren’t prepared. A business that generates one hundred fifty thousand dollars in revenue per year can get away with a lot of business practices that simply won’t work when moving up to the million dollar mark!
While some changes will need to wait until your revenue has ramped up, there are a few essential steps that you can (and should) take before you start scaling your business.
Crafting a solid business plan
Oftentimes the role of a good business plan is overlooked. Sure, when you’re an owner/operator it can feel a little silly writing a multi-page document about how your business will be run – but the role of your business plan is in guiding future expansion.
Without a clear plan and a well defined business model, growth is often random and piecemeal. This results in your business turning into an unmanageable mess of procedures, services, and products that don’t necessarily mesh into a cohesive and successful idea.
We recommend that entrepreneurs and new small business owners take a look at the Small Business Association’s resources to learn more about creating a good business plan.
There’s an old idiom that goes “it takes money to make money,” and while there are certainly exceptions, having some money set aside will definitely help with business growth.
When your business is growing you will encounter numerous new expenses including new equipment, staff salaries, moving into a bigger space, purchasing additional insurance, and dozens of smaller payouts that are simply a part of growth.
Now, these extra expenses aren’t a bad thing – and each of these is a necessary component of growth. However, if your bank account at the end of each month is looking pretty bare, then these expenses are going to create a lot of stress, and may even cause serious cash flow problems.
You should go into any expansion with a healthy balance sheet. Be sure to budget for any major expenses that growth may require. If you are in the home service industry, the cost of expanding your fleet of vehicles can add up quickly, so plan ahead!
Building a strong team
Oftentimes businesses start out as solo-ventures – but if you want your company to grow, a strong team is essential. However, this is often the most difficult part of expanding your business and is where we have seen our clients have the most difficulty.
Building your team is a balancing act – add too many people too early, and you’ll struggle with payroll and may need to let people go. Don’t add enough people and you’ll burn out your staff and they will leave or mutiny!
The phrase “quiet quitting” may be all the rage nowadays, but the phenomenon is not new and is often not so quiet. Unhappy office staff have been known to refuse to answer calls, ‘accidentally forget’ to book appointments, or even start their own rival business!
Too often staff are underappreciated until they are gone. Remember that while you are 100% committed to your business, your staff are just performing a job and want to be treated well, paid well, and not have to stress about it when they go home at night.
Pay your team fairly and don’t let your team shoulder the stress of ownership. As the owner this is your burden, but you also are the one who will ultimately reap the greatest rewards.
While pen and paper may be all you need to manage your appointments right now, it is essential to recognize that as your business grows so too will your need for efficient systems. Systems that are good enough now can quickly become bottlenecks for your future productivity!
Using CRM tools
When you decide it’s time to start getting serious about your business, it’s time to get a customer relationship management (CRM) tool. There are dozens of these tools available, often with industry-specific software that caters to your particular needs.
These tools are generally sold as software-as-a-service (SaaS) and will have monthly subscription fees – but these fees more than pay for themselves. Remember, missing an appointment will easily cost you the monthly cost of one of these programs in lost revenue – not to mention the potential impact of the bad review your upset customer may leave!
Accounting and payroll services
In addition to a CRM tool, we recommend that you offload your accounting and payroll to experts. Most of us are not accounting professionals and these tasks carry significant liability if done incorrectly. You’ll save time and avoid major headaches down the road by hiring a qualified accountant and payroll specialist to handle this for you.
New hires and job descriptions
Another area of your operations that is worth streamlining early is your hiring process. We recommend using a single point of contact for new hires instead of having resumes come in from several different channels.
Indeed.com and LinkedIn (not an advertisement, merely services that our clients have had success with) are good free hiring platforms with robust tools that make screening new candidates easier. If you want to add a link for job applications to your website it’s as simple as linking out to your Indeed job listings.
Rather than only listing new positions when you are actively searching for new employees, keeping your job listing up all the time lets you build up a pool of qualified and interested candidates.
Also, now is a good time to spend some time creating detailed and accurate job descriptions. It is not enough to say “answer phone calls, respond to emails, and be proficient in Microsoft Office!”
Job descriptions need to include a job title, include a specific and narrowly defined description of duties and responsibilities, expectations of experience, and specify who the new hire will report to. In many cases the company you use for your payroll services may also offer assistance in creating job descriptions.
Understanding your market
As the business owner, it is absolutely essential that you have a robust understanding of your market. This will help you identify opportunities and potential challenges – but perhaps most importantly, will protect you against shills and bullshit artists.
If you hire a marketing company and they assure you that your business needs to invest heavily in a target market that you have never been able to serve, alarm bells need to start ringing. Of course, there is a time and a place for radical change – but you need to have a strong enough understanding of your market and current customers to identify (and ignore) bad advice.
Growth Without Compromise
Once you’ve launched your new marketing initiative, you need to be ready for the ride. You will start getting more calls, generating more leads, and booking more appointments, and if you keep doing things just the same as before you may find yourself overwhelmed.
Only accept the work you can handle
This is the most important lesson that business owners can internalize. While you may be eager to accept every single project that comes in, know that there will come a time when you will be better served by turning away new business.
In the past we have seen clients get dangerously overbooked – resulting in long waits for emergency service appointments, unhappy customers, and bad reviews. Be honest with yourself and the people you’re working with. Don’t be afraid to turn away work that is getting in the way of you achieving your goals.
As mentioned above, using a CRM tool is an essential part of growing your business and will help ensure that you only accept work that you are staffed to handle. Don’t count on being able to quickly hire new employees to cover surplus bookings, because if the hiring process takes longer than you anticipate (and it often does) you’ll be left scrambling.
Be prepared for changes
Growth brings change, whether you like it or not! We’ve had clients experience such rapid growth that they were literally kicked out of their existing office space because their fleet of work vehicles expanded too much for their facilities!
Instead of waiting for these changes to be forced upon you, set milestones for your growth and make these changes on your own schedule.
Continuous training, hiring, and team development
We’ve already addressed the importance of starting with a strong team – but it’s worth remembering that maintaining your team is an ongoing process.
Growing your team
Hiring new staff is a big commitment and should only be done when you’ve got enough work to keep your new member on your team all year round. However, there are a few ways to help find qualified help without necessarily needing to commit to a new full-time hire.
Oftentimes local technical colleges will have a large pool of candidates looking for apprenticeships. This is a great way to get access to trained and motivated individuals. Similarly, some states have job placement programs for ex-offenders, and in many cases will offer your business incentives for hiring.
An added benefit is that, unlike traditional hires, if one of these job placement programs or apprenticeships doesn’t work out, your business will generally not be liable for unemployment claims.
Supporting your existing staff
This is a big one! Your current team knows how your business is run, will train your next generation of staff, and are vital to your future success. Keep your team well-paid, happy, and give them the resources they need to succeed.
In regards to that last part – don’t assume that you know what resources your team needs and don’t be afraid to ask them! You might think that hiring an assistant for your office staff will make them happy, but perhaps they’d rather that money be used to replace the existing clunky CRM with one that offers powerful automation tools.
Try to provide your team with the education, time, and support they need for them to grow with your business. Instead of hiring managers from outside of the business, promoting from within helps ensure that you perpetuate your existing business culture and rewards success.
Navigating legal considerations
We’ve got to preface this by saying: We are experts in marketing and not law. With that said, here are some general things to consider as your business grows.
A bigger business may require more insurance or different licensing.
For many home service businesses, like plumbers and electricians, small projects (often under $5,000) can be done without a license. Exceed this amount and you’ll need to make sure that you’ve got the necessary documentation or you may find yourself on the wrong side of the law!
Expanding into new regions may come with new legal requirements.
Licenses, insurance, and hiring laws may vary greatly from state to state. In some cases you may even find that local regulations vary across county lines or within certain cities. Do your due diligence before expanding into new regions.
Feedback and adaptation
Keep an eye on your customer feedback and take it very seriously. Positive reviews are great to see, but ultimately it is negative reviews that tell us where we need to change. If a particular service is routinely getting negative reviews then this is your sign that your business is simply not very good at this service!
There are really only two paths forward: stop offering this service or improve your training to the point where you’ve completely addressed the complaints. In many cases simply dropping services that your customers aren’t happy with is the best choice.
Remember, Google reviews are the lifeblood of the service industry – too few reviews or too many bad reviews and your business will struggle. Getting bad reviews is easy – simply make customers unhappy and they’ll come pouring in. Getting good reviews, on the other hand, takes dedication and work. Check out our guide on how to get more Google reviews with less work.
Marketing and branding for growth
In order for your business to grow you need more people within your target audience to know about your business, and you need to convincingly explain why they should choose to work with you over a competitor.
Increasing your company’s visibility
Getting more eyes on your business can take many forms, ranging from on-page search engine (SEO) optimization to pay-per-click advertising to sponsoring local community events. We recommend working with a marketing company that is familiar with your industry as they will better understand who your target audience is and how to reach them.
We have found that most businesses are able to reach more new clients when they take a multi-faceted approach. SEO helps put your website in front of more people, while social media platforms like Facebook and Instagram are great for increasing customer retention and brand awareness.
Be sure to pay close attention to your Google Business Profile, as this is a great way to reach potential customers. We’ve found that upwards of 30% of our client’s leads come directly from GBP and local SEO!
Finally, don’t forget about the power of word-of-mouth marketing and repeat customers. Referral and loyalty programs are effective growth strategies that are inexpensive and easy to implement.
Effectively communicating your company’s value propositions
Answering the question “why should your target audience choose to do business with you over your competitors” is an essential part of any new marketing strategy. The answer to this question is known as a Value Proposition and despite its importance, it is often overlooked by small businesses.
We’ve written an entire article explaining value propositions and their role in marketing and strongly encourage you to check it out!
Delivering a consistent message across all of your company’s marketing channels
While we can’t make any blanket statements about what your brand identity should look like – we can safely say that it should be cohesive! Everything from color scheme to the tone of your content should match on your website, on social media, radio ads, billboards, etc!
Remember, your prospects likely haven’t made the decision to work with you from a single point of contact, but they are leaning towards it. As they move from a Google ad to your homepage to a service page they should see the same messages reinforced and elaborated upon, rather than being presented with something novel at each step along their journey.
Laying the Groundwork for Growth
Taking your small business to the next level is an exciting and rewarding prospect but growing your business is not as simple as simply increasing your leads.
Growth needs to happen across all levels of your business, and just as in most areas of life, there is such a thing as too much of a good thing! If you sacrifice your customer experience or employee happiness for more appointments then any gains will be short-lived.
Having a solid business plan, a strong team, and a streamlined operation are all essential prerequisites for successful growth. Once you’ve started expansion, be ready for changes, keep your team happy and growing, and don’t be afraid to turn away excess work when your schedule is full!
If you’re a home service business and are ready to start getting more leads, we can help. Cut Throat Marketing specializes in marketing services for small home service businesses and we can help you take your business to the next level!