Guide

Service-based small business ideas

This guide looks at ideas for starting a new business using your skills or experience to provide a sought-after service.

What is a service-based small business?

Small businesses are a big part of Canada’s economy. In 2022, businesses with 1 to 99 employees made up 98% of all employer businesses and employed 10.7 million people. The vast majority of these are in the service sector, providing skilled services, personal labour, and expertise to customers. Accountants, plumbers, hairstylists, and personal trainers are all common service-based businesses These businesses help their customers by offering skills and expertise that they don’t have, or by completing time consuming projects.

While some professional service-based small businesses, including doctors and lawyers, require years of education and training, this article focuses on starting new businesses that are easier for entrepreneurs to enter, with lower startup costs and shorter training periods.

Why you should consider starting a service-based business

Running your own business can be fulfilling and financially rewarding. You can be your own boss and create something of lasting value for you and your family. As a service-based business owner, you can work flexible hours and help customers solve problems they can’t figure out on their own. Some of these businesses can be relatively easy to set up and may have lower startup and overhead costs.

If successful, your business can be profitable with high margins. You can start small and grow your company with more clients and employees at your own pace. Part of the process to having a successful small business is to find your market niche and then come up with a USP – unique selling proposition – that makes your offer stand out from the competition. Some service-based businesses are relatively easy to manage and may not require a lot of education, training, and skill certification to operate. Others require skills, education, and training, and can be demanding to manage. Some businesses can be started out of your home, which can be convenient for parents with young children, and it can be done on the side along with your day job.

How to take your small business idea into reality

Before you set up your own company, make sure your small business idea is financially viable and has the potential to succeed. To make sure you get the right fit, be sure to do your research to identify your target customers and understand their wants and needs. You should also explore your idea more fully, to be sure the business will be profitable and in high demand.

The next step is to select the right business structure for your new company. In Canada, there are three common business structures – sole proprietorship, partnership, and corporation – with pros and cons. So you need to pick the one that’s right for you. After that, you need to choose a business name that describes your business well, is catchy, easy to remember, and, most important, available.

When you’ve done these, you should write your business plan, to spell out your vision for the business and how you intend to accomplish it. The business plan consists of the following:

  • Business overview
  • Sales and marketing
  • Operations
  • Human resources=
  • Financing
  • Action plan

Bringing all of these elements together gives you a roadmap for your business and helps you understand your likely startup costs and how much to charge customers.

When you’re ready to start doing business, you will need to decide whether to go the “Brick & Mortar” route or opt for an online business by offering services virtually. For some retail businesses, commercial location will be an important consideration. For others, like B2Bs and tech startups, it is likely to be less important.

Whatever the business, entrepreneurs should make sure they have effective digital marketing support. It’s critical their services are easily found on the web, their websites are compelling and actionable, and their selling points are clear and understandable. They should also optimize their social media platforms to promote their services with content that fully engages customers.

A service-based business provides a skilled service, personal labour, or expertise instead of a physical product. These include hairstylists, bookkeepers, and tradespeople among others. These services help people who don’t have the time, knowledge or skills to complete these tasks on their own. Service businesses fall under different categories, including personal services, home services, business services, beauty and lifestyle services, marketing and sales services, and technology and online services. Here’s a look at service-based small businesses where you don’t need many years of schooling or a lot of money to get started.

Personal services

Personal services help individuals improve their lives. These service business ideas include:

Personal trainer

Working out of a gym or independently, trainers develop holistic fitness programs comprised of fitness, health, and nutrition targeted to individual needs. Trainers are required to have professional fitness certification at varying levels.

Personal chef

Working directly for celebrities, politicians, or business leaders, personal chefs are responsible for shopping for ingredients and designing and creating meals. They may be trained in culinary schools or are self-taught.

Home services

Home services provide different services targeted at improving life in the home. These include:

Cleaning services

There are a variety of residential cleaning services and maid services, or commercial and franchise operations.

Car wash

This includes washing cars, cleaning inside and out, detailing, polishing and waxing, and windshield cleaning.

Landscaping and lawn care services

These landscaping services include building and maintaining garden areas, patios, and outdoor spaces. This also includes lawn installation and maintenance, including lawn mowing, mulching, pruning, trimming, and general garden services.

This involves general around-the-home maintenance, including repairing leaks, broken cabinets, jammed doors, TV installation, and other simple tasks.

Meal delivery services

Meal delivery such as UberEats or DoorDash is aimed at those who can drive and are looking for a flexible schedule.

Transportation services

Ride-sharing services like Uber or Lyft work for car owners wanting a flexible work schedule, picking up and dropping off passengers at their destinations.

Childcare services

This involves caring for children and includes nannies, babysitting, short-term, long-term and special occasions). More formal childcare service settings, such as running a daycare centre, require childminder practitioners to be licensed.

Eldercare services

This involves caring for senior citizens. There are a variety of levels of such services, including caretaking and adult daycare. More formal eldercare services require licensing.

Pet sitting

This could be caring for pets while owners go on vacation, watching pets, or running kennels on private property or at the pet sitter’s property.

Pet grooming

Pet groomers bath and groom pets (dogs and cats), brushing, combing, and clipping nails. Groomers usually require specialized training and experience to offer this service.

Dog walking

Walking people’s dogs, either individually or in packs, can be a good service-based business.

Pet behaviour management training

This involves animal behaviour management training for difficult pets. This profession requires specialist training, expertise, and experience.

Business services

Business services provide support to other businesses and business owners. Here are some examples:

Virtual assistant

Virtual assistants help business owners in day-to-day office management, scheduling meetings, making phone calls, making travel arrangements, doing data entry, and managing email accounts.

Bookkeeping services

Bookkeepers work with small business owners to keep their accounting current. Tasks are likely to include invoicing, account and credit card statement reconciliation, managing accounts receivable, and accounts payable. These skills will require college training and certification and prior experience.

Consulting business

Consultants support small businesses by consulting on a wide range of topics, including strategy, financial, IT, management, marketing, sales, human resources, and operations. Typically, this is limited to one area of specialized expertise and experience in the workforce.

Property management

Property managers handle day-to-day real estate matters in either commercial or residential properties. This may be in either a single property or larger portfolio of properties.

Event planner

This involves event planning for small private events like weddings, conferences, and larger functions. Event planners typically have specialized expertise in one area, such as weddings or corporate events.

Sales and marketing services

These services support the sales and marketing activities of other businesses. They are often creative in nature and require professional training, certification, and experience. Many of them involve digital marketing. Some top service-based businesses include:

Graphic designer

Graphic designers provide design and visual imagery for other client businesses, using digital illustration and layout software for web design. Projects may also include brand identity, logos, posters, and advertisements.

Copywriter

Copywriters create marketing materials for businesses on a variety of platforms, including website content, sales materials, flyers, brochures, digital commercials, and email campaigns.

Photography

Photographers can do different categories of images for clients. Photography businesses typically specialize in a particular niche, such as weddings or corporate photography.

Email marketing

Email marketers develop email campaigns for businesses, including newsletters, and sales emails and, on occasion, managing email campaigns for other businesses.

Marketing services

Marketers can create marketing strategies and conduct campaigns for businesses either on a freelance basis or on contract.

SEO strategist

SEO strategists are responsible for boosting website traffic through technical and on-page search engine optimization. They work with business owners to identify strategies and techniques to heighten the SEO value of a website.

Social media management

Social media managers handle social media activities of a company, analyzing trends and engagement data, and planning their digital campaigns.

Podcast producer

Podcast producers help clients create and produce podcasts, often involving research, writing, editing, and producing the audio clips.

Beauty, lifestyle, and wellness

These are growing industries that provide services for individuals and businesses to improve the quality of others’ daily life. Examples include:

Yoga instructor

Yoga instructors can be based in a studio, gym, or private space, teaching sessions for individuals and groups, and organizing retreats. Instructors will require professional training, certification, and experience.

Makeup artist

Either home-based or from a studio, makeup artists have a niche for supporting weddings and special events.

Life coach

In growing demand, life coaching sessions with individual therapists are either in-person or online and usually require minimal equipment.

Technology

Technology services are growing and usually require professional training and certification in a variety of areas of expertise, including online business ideas. These include:

App developer

Creating and programming apps for businesses and organizations. Some developers are self-taught, while others get college degrees or certifications.

Computer repair service

This involves repairing and fixing computers and related electronic equipment for individuals and small businesses.

Website designer

This includes designing websites for individuals and small businesses, either on a project basis or through a monthly maintenance contract.

Additional FAQs

What are some of the most successful small businesses?

A good service-based business idea can help you succeed if you plan it well. Businesses in high-growth industries with lower startup costs tend to be more profitable. According to an American Express review of the data, the most successful small businesses include cleaning services, personal trainers, personal wellness, bookkeeping and accounting, and computing services.

What services do people need the most?

The most popular services in demand include fitness, cleaning, pet-related services, transportation, home services, and services for children. The top service businesses include personal fitness trainers, hairstylists, pet sitting, transportation, childcare, and eldercare.

What are the advantages of a service-based small business?

With low overhead and no inventory to support, service-based small businesses offer services to people rather than products. These companies are easier to launch, their focus is on selling skills instead of physical goods, and they are very scalable when there is an opportunity to ramp up operations.

Disclaimer

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

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