THE SERVICE BUSINESS MODEL

Service is something you do for someone else. If you do something in return for money you are in the services business. You can offer services as an employee or as an independent contractor. Employees are hired and controlled by their employers. Independent contractors offer services but have more control over their time and resources compared to employees. The service economy is quite big actually.

Services are usually offered in person but there are ways to scale them. For instance if you’re a teacher you can reach more students through online learning. You can also record clips of your tutorials which can be accessed online. As an independent contractor you can hire more people to help you. For example if you run a law firm you can hire more lawyers to take on more work. You can also automate the service provision. For example banks have deployed ATMs and online banking tools which require no physical interaction with bank staff.

Selling a service is often the easiest way to start generating some income. The capital requirements can be so low as well. Most people in the world earn a living by providing personal services in employment. The only requirement is usually some specialised knowledge and skill set which anyone can acquire.

You can enter the service business by observing the unfulfilled needs around you. Then you acquire the relevant skill set and tools. Then you market your services. For example you can start a carpet cleaning business by talking to your neighbours if such a service was needed. If the answer is positive you do some research on the necessary equipment. You can begin by hiring the gadgets and doing the work yourself. If your service is excellent your customers will refer you and that’s how the business will grow. Eventually you can buy your own equipment. This is the route I have taken with The Money Engineer. The Money Engineer is now a brand which offers paid financial literacy services to different audiences.

Try to establish yourself in a space with little competition and where the barriers to entry are high. Cutting grass is not so difficult and there are many people in that business. However landscaping is not obvious and there are very few people who understand what they are doing.
Strive also for areas which require some kind of licence to operate. The licence acts as a barrier to entry. That’s why there are very few architects.

We are all uniquely gifted and can offer some valuable service to other people. The service business model is available to anyone who is willing to try.

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