Today’s guest is Brittany Becher from Scoop Industries. Our topic today is service businesses and more specifically what you as an owner of a service business can do to create a business that will be sustainable both economically and personally. Service businesses by their nature are small and more are solopreneur type businesses than many others. This provides some advantages and some challenges that you’re going to want to learn about.
The truth is that running a really small business is about 80% the same as running a big one. The main difference, you have no support staff. You’re going to have to do it on your own, at least in the beginning. Brittany is going to help us understand some of the differences and steps you need to take to create a business you’ll be happy with and one that you can grow……if you want.
Even if you don’t have a micro-business, you will want to listen to this episode to apply some of the lessons you’ll learn in this episode. Some of the things we’ll be covering today are:
- Building a business is hard work even though you’re being bombarded with get rich quick pitches.
- How if it seems to good to be true, it probably is in the context of building a business.
- Why building a proforma budget is an important thing to do to make your business successful.
- Understand that creating a service business might be the easiest path for you to start your own business,
- Know that there are only three ways to increase your business. Learn what they are in this episode.
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.
Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick and you’re at The Sustainable Business. Today, our guest is Brittany Becher and I hope I didn’t massacre her last name, I usually do that.
Brittany is a co-founder of Scoop Industries. And they are focused on growing service businesses through some simple strategies. And one of the things we talked about, just a bit before we started, was the fact that they often are working with people trying to debunk the idea that an internet business or service business you’re going to have instant success. And I can tell you from being in business, for over 40 years, there is no such thing as instant success except for people who’ve been doing it for 20 years. And also, they become successful. And that’s basically the way it seems to work.
So why don’t we bring Brittany in and we’ll start talking about your business and what you need to do to make it sustainable?
Hey, Brittany, how are you today?
Brittany: I’m great. Thank you.
Josh: So tell me, we were just talking about some of the hype that happens in the internet world about building businesses and you don’t have to put any effort in. What’s your thoughts about that?
Brittany: Oh, I have lots of thoughts.
You know, first of all, I think, what it boils down to is, as humans, we love a good rags to riches story. We love a good overnight success story because it somehow plays into this idea that we don’t have to do a lot of work to have a lot of success. Also, it’s this sort of the modern day winning the lottery, I think. You know, “Oh, I’ll just put this website up and all these people are magically going to find my website, and buy my products, and buy my courses. And I’m going to be a millionaire tomorrow morning when I wake up.”
And there are some new stories out there that put that narrative into people’s heads because they’re pulling bits and pieces out of different stories and they’re really hyping that up. And it’s just not true. And as you said, if you’d been in business for a long time, that there is really no such thing as an overnight success.
And it boils down to the whole thing where if it seems too good to be true, it probably is. You know, I remember my parents taught me that when I was a kid. And it very much is at play in the online world, specially, because you don’t even need a storefront.
You just need a fancy website. And not even a fancy one at that point. You can make a fancy website or a website that looks fancy pretty easily these days and there’s no real backing. If you’ve got a couple bucks and the ability to type something in a computer, I mean, you can have a business and you can say whatever it is that you want to say about yourself and your company even if it’s not true. And unfortunately, there’s a lot of that hype out there.
And then what happens is people that are trying to run business that are doing the work day in and day out, they sit there and they think, “Oh my goodness, I am such a failure because I am not making six figures in a day, or I am nowhere near a million-dollar business”, or whatever the hype of the moment is in the online world. And it starts to beat people down and it’s not telling you the whole story about a business. There’s so much more to a business as I’m sure you know, then the revenue so.
Josh: Yeah. I get very, very tired of reading, “Make your six-figure business a seven‑figure business” or “Make your five-figure business a six-figure business.” It’s not as easy as it sounds. That’s for sure.
So, Brittany, what would you recommend that people do, if you do want to build a successful business? And forget the size, but what they might consider a successful business?
Brittany: So I think the first thing that’s important but oftentimes we overlook when we think about starting a business or we think about, “Oh, it would be fun to do that”, or “I would rather do that than what I’m currently doing at my day job” is we fail to really ask ourselves “What does success look like for us?” And everyone is different. Everybody has different personalities. Everybody has different circumstances in life. Everybody has different amount of time and resources that they can put into things. And I think, you really need to understand what your definition of success is because if you don’t figure that out for yourself, it’s going to be really hard and you’re going to get distracted by all the shiny objects out there if you aren’t true to what that means to you.
So maybe it means, maybe you want to start a side hustle and you know that you need to bring in an extra thousand dollars a month to your pocket to help your household or whatever it might be. Or maybe you have a goal that you want to leave your day job in six months and so you need to replace that income. You need to figure out, first of all, what your metric of success is going to be and then work towards that.
One of the things that is often absent from all of the income claim marketing that you see on Facebook, and Instagram, and all of the social media channels is they show you the revenue that the business brought in but very rarely do they ever talk about what goes into running a business, right? So expenses, team members, taxes and the things that are just aren’t the super glamorous parts of business but those are all taking a chunk away from that revenue.
It’s not uncommon for a lot of these businesses that have six-figure and seven-figure claims to actually not be taking that much home and putting that much back into their own pockets. And that’s okay if you’re going to take five to ten years to grow a really large company for some reason. But if you are a solopreneur or one or two people and you want to make some money for your household and your life, you probably want to keep a lot of that money in your pocket.
So I think realizing that there is often a tradeoff for what is actually staying in your hands or what you’re actually taking away from the business versus what the overall top line number that the business is bringing in. So that’s the first thing, getting really clear on that.
And the other thing I would encourage people is, kind of depending on what that success definition looks like for you, challenging yourself to think about a services-based business if possible. So there are a multitude of different services you can do. You can be a bookkeeper. You can be a hairstylist. You can be a marketer. You can be a masseuse. You can be a yoga– you know, there’s endless amounts of things that you could do.
And the reason why I really love services as the first foundation of a business, especially a business even if you’re running it online or using online as part of your way to deliver, is that it’s a pretty fast path to cash. And I don’t mean that’s it’s going to make you a millionaire overnight. No, it’s not.
But if you have a service that you are able to offer and people are willing to pay for, it’s pretty easy to get one or two people to say “yes”, or four or five people to say “yes”, versus going the online business route, trying to build a massive email list, and then running a complicated launch, and setting up all different landing pages and opt-ins and Facebook ads and all of that because all of that costs a whole lot of money and it takes a whole lot of time, and expertise, and knowledge, and you’ve got to reach a sea of big, huge audience of people to get just a few people to convert.
Josh: Okay. So we know we need to have a service business. And we know that we’re not going to become a zillionaire over a day. But what specific steps do I need to be taking, if I’m going to go into business? Here, we’re dealing with businesses that are already pretty much established. So, what should they be thinking about as they go forward with their business?
Brittany: Sure. So you need to figure out, if you have enough clients.
Josh: So how would I know if I have enough clients?
Brittany: Well, if you’re meeting your goals.
Josh: What does that mean?
I mean, again, well, if I’m meeting my goals or if I’m not meeting my goals, I mean, it sort of says, “Well, how do I know if I have enough clients?”, saying that “Okay, I want 10 clients.”, but why 10 clients?
Brittany: I’d encourage you to look at the revenue because you need to know– I mean, 10 clients, if they’re paying you $10 each is not going to be the same as 10 clients paying you $1000 each, right?
Josh: That would make sense.
Brittany: When I say goals, if you’re not meeting your revenue goals that you need or that you want to be reaching, then I would argue, you’re going to need to find more clients or you need to take a look at your prices and your packaging to see if there is a way to leverage that there.
Josh: Well, there’s only three ways to increase sales. And those three ways are pretty simple. It’s either you get more customers, you get those customers to buy more stuff from you, or you raise your prices. So, it seems to me, if you’re not meeting your revenue goals, you should be looking at one of those three things.
Josh: So which one would you usually have people look at?
Brittany: It depends on what your goals are, like I said. But for a lot of clients that we help, usually what we find is they’re spending their time in the wrong places. They actually need more clients. They’ve only got a couple or a few. And they have the bandwidth and the ability to take on a few more. And they have a service that they can easily offer.
And so, instead of spending time working on your website, or writing a blogpost, or updating your social media channel, you should be out there connecting with the perspective clients that can turn into actual clients for your business, whether that’s networking, reaching out via email, asking for referrals and introductions in your networks. That’s going to be a very tangible thing that you can do day in and day out that’s going to help move you forward. Whereas, I would argue, you don’t even necessarily need a website for a service business. So if you’re spending time chasing the shiny objects of the online world, it’s harder.
Josh: Okay. So which of those things would you recommend is the best way to get new customers?
Brittany: My favorite is to reach out to your professional and your personal networks, if you haven’t done it. Especially if you’re towards the first couple of years of your business going and you’re not doing it in an annoying way but letting people know what it is that you do and how you can help. And if they can pass your name around to anyone that they might know needs help.
I find that, often times, when we work for ourselves, we work from home, even people in our immediate network don’t even know it is that we truly do. And so, being out there and talking about it, step 1. I also think we all have a lot of untapped professional networks that, whether it is from our former job or a previous client engagement, that we don’t do a great job of continuing that relationship. So reaching back out, letting them know, “Hey, this is what I’m up to right now. If you know of anyone or if you’d like to chat, I would love to sit down and have a conversation with you.”
Josh: So here’s the challenge with this, and I think you’re right that that is a great way to grow a business. But I get contacted probably at least once, if not twice, a week by somebody who wants to have a phone call. And the real purpose is to get me to refer people to them.
And even if I know somebody well, and they come up and they say, “Gee, can you introduce me to people?” For me to introduce anybody to a service professional, I’m taking a huge risk. And my risk is reputation risk, meaning that if I refer you to somebody who I know and you do a crummy job, it’s not you that’s going to look bad, it’s me that’s going to look bad. So when you’re advising people to do the referral methodology, to grow their business, how do you help them get around that issue?
Brittany: Well, I think that’s absolutely a challenge, right? And first of all, I would say, “Don’t do a crummy job.” I mean, don’t go into–
Josh: Let’s assume you do a good job. I, as refer-er, am taking the huge risk.
Brittany: Absolutely, I agree with you, 100%. But what I’m saying is– so what I tell people is, “First, make sure you do a really good job so that your referral engine continues to work for you.”
I would argue then, if you’re coming across that, if you’re having a challenge with getting people to refer you or introduce you to folks, I would reach out to past clients that you have worked with – happy past clients. If you don’t have that as part of your off boarding process to ask for referrals and introductions, that is a very valuable untapped avenue to getting new clients into your door because they worked with you. They know the work that you do. And, oftentimes, people have to be reminded that you would like a referral or introduction.
I think introductions are sometimes easier than referrals. They don’t have as much of that weight to it because– I mean, I’m 100% on board with you there. That can be a challenge. But these are just avenues that people often overlook. And if you’re looking, you’re try to bring in more clients, it seems really easy way to start getting more people into the door.
Josh: Okay. So what I’m hearing you say – and this is, in my opinion, a really big deal is that the best place to get introductions– and by the way, an introduction is a form of a referral, it’s just a warmer one, at least in my opinion, is that when you have somebody who is happy with your services and you ask, they may be likely to make that introduction.
But if you’re going to another professional, or let’s say you’re a masseuse and you go to a chiropractor and you’re asking them for referrals, you’re really probably barking at the wrong tree unless you’ve already done some work with clients of that chiropractor.
So it would seem to me that the best way to get an introduction and to build more business is with somebody who’s happy with you already. And if you don’t have anybody that you’ve done business with, do some jobs free so people get experience of what you do. Would that make sense?
Brittany: Yeah, that definitely makes sense.
Josh: So if you wanted to scale your business– let’s just pivot for a second, what would you recommend you do?
Brittany: So, for scaling your business, we talked a little bit about this earlier. But one of the ways to grow your business is to charge more, so pricing.
Josh: That’s not scaling your business. Scaling is adding more people and is adding more customers that go past you or that you can’t do it yourself.
Brittany: I would argue that scaling means growing your business and making more revenue, so not everyone wants to add more people to their team. That is obviously one way to do it, is to add more people. But you often have a lot more leverage in your business around your pricing than most people realize in their industries, if you’re doing a service – especially professional service.
Josh: Let’s talk about that for a second. If I’m charging $100 an hour, how would I go about testing what the upper range of my business would be?
Brittany: So if you’re charging $100 an hour and people are not saying no very often you have some opportunity there. You have to do a little bit of research as well. I mean, there are certain industries where like the top of the cap is going to be at a certain point.
But there are people that charge $50 for something and people that charge $200 for the same thing per hour. And so, this obviously can take some time. You’ve got to have the right expertise to get the results for what you’re doing. But if you’ve been charging let’s say $50 an hour or $100 an hour for years, there’s room there to increase. Especially if you’re working on a retainer model with clients, there’s room there to increase that hourly rate, for sure.
Josh: So how many people should be saying, “No, you’re too expensive” before you start not raising your rates anymore? So in other words, I’m charging $100 and I go out to you and I say, “It’s 200.” What percent of those people I’m quoting $200 to should be saying “no” because of the price before I realize I’ve raised my prices too much?
Brittany: I mean, I don’t think there’s a hard and fast number there but if there’s more than 50% of the people that are saying “no” and when you’re talking to qualified people, people that you’ve either done an intake form for or that you know are– you know not to be just off the street, “Hey, would you pay me $200 for this?” And if it’s qualified needs.
I mean, if you’re normally closing 60% to 75% or more and then you start closing 50% or less, I mean, that’s a good sign that maybe you’ve met that threshold. The other thing that that might indicate is that if you want to increase your prices to a certain point then either you need to take a look at your services and/or the market that you’re going after.
Almost every market, like [inaudible 00:17:31] reach is going to have some price top. But then there’s always another market that you could tap into that they would pay $200 an hour without batting an eye. It just depends on if you are willing to move into a new market.
Josh: Yeah, I call it the proportional pocket book. In other words, if someone is going to hire me, they’re not hiring me unless they make at least a half million dollars a year because I’m too expensive. But if someone’s making a million dollars a year or two million dollars a year, hiring me is an easier decision than somebody making a half million dollars a year.
So I always say to people, “Think about what is the proportionate amount that you’re charging based on what the pocketbook the person has.” So if I’m a masseuse, for example, and I’m dealing with people who make $75,000 a year, I’m probably not going to get much more than 100 bucks an hour. But if I’m dealing with people who make $300,000 a year, I could probably charge $250 an hour. And those customers might not even bat an eyelash. Would that make sense to you?
Brittany: Oh, absolutely.
Josh: So that’s one of the things you might think about for pricing is, “What is the proportional pocketbook you’re trying to get when someone is looking at your services”.
So do you have any really good nuggets for service businesses to find clients? After referrals, what would you do?
Brittany: You know, I think, really figuring out where your audience is hanging out, so where your target market is at and being there, whether that’s attending conferences, or joining online forums, or Facebook groups. And just being a part of that conversation and being visible and of service in those ways.
A lot of times service providers, we tend to– let’s say I’m a bookkeeper. Well, I tend to have my sort of bookkeeping associations and peers. And I hang out with them a lot, whereas, they’re not going to hire me. If I’m looking to go work for lawyers, I need to see where the lawyers are and be where they are. That can be very, very lucrative especially if you’d find [inaudible 00:19:30] or a really tight target audience that you want to go after or hang out where they are and be of service there.
Josh: Oh, that sounds like becoming a niche-a-holic because that’s one of my favorite things in the world so.
Brittany, unfortunately, we have just run out of time and I’m going to be that some of our listeners today might be interested in finding you. So, if they wanted to do so and have a conversation, how would they go about doing that?
Brittany: Yeah. You can find all of our contact information over at scoopindustries.com. And if you want to reach out to me directly, you can send me an email at firstname.lastname@example.org. I’d be happy to answer questions or start a conversation.
Josh: Hey, Brittany, thanks so much for your time today. I really appreciate it.
And I also have an offer for you. I’ve been working for years and years on this project. And I finally have nailed it down. There are five things you need to be paying attention to in your business if you want to create a sustainable business.
And I’ve done a free one-hour audio CD course on those five things and what you might want to be thinking about. To get this, it’s really easy, all you do is take out your smartphone and please don’t do this if you’re driving. But take out your smartphone and text the word SUSTAINABLE to 44222. That’s the word SUSTAINABLE to 44222. You’ll get a link. You give us your name and address and we’ll mail that CD to you. And by the way, if you don’t happen to have access to a CD player because cars aren’t having it anymore, just send me an email at email@example.com and I’ll just send you the audio file.
So, again, this is Josh Patrick. Thanks so much for stopping by. And I hope to see you back here really soon at the Sustainable Business.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802‑846‑1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at firstname.lastname@example.org.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.