EFP 60: 6 Gotchas Regarding Service Based Businesses

Justin Cooke

August 15, 2013

Every business model has its flaws and running a service-based business is no exception.

The Flaws of a Service Based Business

Joe and I have been involved in several companies that offers services to businesses/clients and have spoken to many of you that run consulting agencies. It’s rough out there! We wanted to sit down this week and discuss some of the “gotchas” that come with running a service-based business and share our thoughts on how to overcome those obstacles.

I’m interested to hear if you’ve run across any of these issues in your business – we’d love to hear from you in the comments!

Check Out This Week’s Episode Here:

Direct Download – Right Click, Save As

Topics Discussed This Week Include:

  • News/Updates: AdMob, WPRankTracker, and due diligence reports
  • Customer retention and selecting the right clients
  • Value your time and the prospecting black hole
  • Getting squeezed like a turnip
  • Delivery expectation and productized services
  • Adding value and making someone else rich

Mentions:

So…do you work as a consultant, run an agency, or delivery services? Have you struggled with any of the points mentioned in the show? Anything we missed? Let us know on Twitter, drop us a voice recording, or leave us a comment below!


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Discussion
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  1. Interesting episode. You have a very valid point about structuring your hours to suit, IE. we’re available for meetings between 9 – 11. I’m in a service based industry now, with standard 9 – 5 work ours, supplying materials handling services to a wide range of industries, that work all sorts of hours. If we have to supple a out of hour service, ie. Breakdown repairs, – Charge for it. We charge a minimum 4 hours, so it might be $400… Once you explain that to a client, they usually are happy to wait, until normal working hours to save themselves a few dollars.

    Its these times, you need to be able to structure your business, to be able to handle most client demands. because that’s what your opposition will do. but you nee to be smart and charge accordingly for it. Giving things away for free is a great way to go broke…

  2. sebi 20 says:

    You guys loosing energy by the time. I need more energy on the new podcast please !!
    I saw you are more motivated to speak about niche websites and outsorcing in general and that is ok :)
    also…good podcast. thank you !

    • Justin Cooke says:

      Hey man,

      Yeah, a little less energetic on this one, eh? I had a bit of a cold and neither of us were 100%, I think…but the content still came out ok. (I hope)

      A friend mentioned to me the other day that, although he really liked this episode, it’s probably not as helpful/useful to our core audience. I’ll keep that in mind for our future episode topics, I think. It’s useful for contractors and service-based entrepreneurs, but that’s not our “main” audience, hehe…

  3. Really enjoyed this episode. Nothing bonds like lamenting about bad clients :)
    I think the customization problem is the biggest by far and I would love to hear a whole episode about dealing with it – how to tell clients “no” or “that’s too much work” or “would you just shut up and accept the design?”. From where I stand it seems like webdev clients think of themselves as patrons of art, assuming their websites will get to museums somewhere in the future, while not having a clue about what’s efficient, good in user experience (UX) terms or suitable for the Internet. How would you tell them “it’s not your bathroom or kitchen to decorate. leave it to us and make peace with standard solutions and designs that work best”?

    • Justin Cooke says:

      Thanks, Chris!

      I definitely hear this argument from designers and UX guys all the time – it’s a difficult/touchy situation to have to both deliver on the clients needs AND make sure that you’re following best practices, delivering something that will WORK, etc. Sometimes the client’s design changes are not congruent with their long-term goals and it can definitely be challenging to point that out in a way that keeps everything working, heh.

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