Over the past few months, I have come across an influx of articles, webinars, masterclasses, and podcasts all tackling the topic of “How to Start an Online Business.” While starting an online business in which you are selling a product or providing services exclusively online is the popular end goal for many, I wanted to research and create a guide outlining the steps for those wanting to start a business or side hustle for the first time.
This article will explore starting a service-based business as a solo provider or freelancer.
We will take a step back and start from square one before you even consider diving headfirst into the online business world. Square one for most people is starting with a purely service-based business by doing client work.
For the sake of clarity, we are defining a service business as a business that uses one (or more) person’s time and skills to resolve or clear another person’s various challenges or problems.
In this guide which will be split into two articles, I’m going to give you practical steps for helping you start a service business whether it’s full-time or as a side-hustle.
Here’s what I’m going to be focusing on:
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Before we start laying out a plan, l think there is value to understand why starting a service-based business (a.k.a. doing client work) is the best way to get started when starting a business.
The most glaring misstep I see people make who want to start some sort of business is they jump right into trying to create it online first. They will spend time and money trying to create an over the top website, an eCommerce store, or some grandiose digital product or app. In most cases, it takes time to build these types of services and products online. Success in this manner requires having an existing following in which you are seen as an authority or expert. Expertise is built up over time and there is no better way to accumulate it than by providing a service.
Here is why starting a service-based business is the first logical step when starting a business:
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What problem are you solving and how will you solve it?
The holy grail rule for all businesses is to solve people’s problems. Plain and simple, all businesses exist to solve problems. Therefore, you as a person in business are a problem-solver.
So how do you know what problem to solve?
The service you plan on providing should answer this question. Determining this is a very important part of the process that requires self-reflection. You’d be surprised how many people start a service-based business without fully understanding the problem they are solving for others. This step may seem trivial, irrelevant, and blatantly obvious for some people, but don’t skip this step.
Start by answering these questions to generate ideas for choosing a service for your business.
Answering these questions should get the juices flowing. A good exercise to do is to free write the answers to these questions in a journal or on your computer. The goal here is to just empty your brain with any ideas and insights that come to mind. Spend a day or two reflecting on your insights but go with what feels right and comes easiest and natural for you.
Here are some tips while you are coming up with ideas:
Now that you know what service you will offer, you need to clearly define your audience.
Who needs this service? This is another critical piece that should not be overlooked.
Do a quick brainstorm and answer these questions.
Determining your audience is crucial—spend some time giving this some thought. Write down the answers to these questions like you did previously in step 1. The goal in this step is to do some research so you know exactly who you want to serve. This will allow you to create better services and offers that help that specific group of people.
But is it profitable?
If you have been able to successfully define what you re good at, what you enjoy doing, and what problems other people are having that you can solve, the next question to answer is: will people pay for this service?
Plenty of people have great ideas for a business, start taking action on that idea only to have the wind taken out of their sails because they realize the market isn’t there for what they are offering. You have to find an avenue that is practical to be profitable.
Does your skill match someone else’s needs and are they willing to pay for it?
Remember the holy grail rule of why businesses exist is to solve problems. You will make money when you solve people’s problems.
Don’t spend too much time overthinking this. Determine your audience, understand if the service you are offering aligns with the problem they are facing, recognize if they are willing to pay for it, and move on. Go with your gut. You will refine and pivot as you go.
Before moving onto step 3, the goal at this point is for you to have landed at a vision for your business that strikes a balance between:
This is is the sweet spot you are looking for.
In essence, this is the formula for defining the vision for your business:
Your Skills & Passion +
What People Need +
What They Are Willing To Pay For
In part II of this guide, we explore how to start providing your service by finding your first customer.
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