How to Start a Service Based Business on the Side: Service Business Development 101

By Kimberley Borgens


You know that thing you like to do…

That hobby that is costing you money every year and you don’t have a way to write it off on your taxes?

The coaching advice you are giving to your friends for free and you are starting to feel taken advantage of?

Those fashion tips that you share all over social media with nothing to sell for people to pay you for?

Maybe it is time for you to start a service based business on the side to earn some extra cash and make a bigger impact in your family and your community.

What is a Serviced Based Business and how do you start and grow one?

One of the biggest benefits to starting a Service Based Business is essentially there is no big start-up costs to begin. You can offer your time and be of service to anyone and be paid a good price for your services. Let’s be clear what it means to be of service to someone.

Service is defined as; to repair, maintain or provide something to someone.

A service based business is intended to help, aid or do someone a service. To enhance or empower another individual, family or organization so they can provide assistance to someone or something else. Create a value that someone is in need of and provide that value in a responsible way to be of service.

Service Based Businesses provide value to their customers through intangible skills, expertise and time. This is different than a product based business that sells something that is a tangible object or physical product and can be repurchased in most cases without change.

There are three types of Services you can offer as a business.

  • Business Services
  • Social Services
  • Personal Services

When starting out in your business, chose one type of service to start, don’t try to fulfill all three with what you offer. That confuses buyers and most of the time they are only looking for one form of service. A confused buyer doesn’t buy, so keep it simple to one of the main services. Once you have established a community and a great product with one form of service then you can look for ways to include another service to aid you community.  Yes, some businesses will offer services that will provide for one or all three types of services. It takes a special person to incorporate all three at once and yes you could be that special person. Most of us need to start with one and then add more in as it is a lot more work to try to fulfill all three right away. Either way decide for you how to make it work if you go with one, two or three of the types of services. Some things will overlap no matter what. I am not talking about the over lapping pieces. I am sharing that taking on all three on a full scale right away is a lot of work and business service development is hard enough without making sure all are being serviced at once.

Let’s look at some benefits to starting a service based business.

  • You choose your business idea and your ideal client to work with
  • Low cost start up
  • Flexibility of your time, energy and what you offer
  • Setting your own pricing structures (reasonably)
  • Freedom from bosses and with what you want to create

All of these are great reasons to start a service based business. And there is a lot more to it. Those are just benefits that get people excited to start a business. There are still so many other things to consider and put into place for you to start and be successful at being an entrepreneur. Understanding that a great service based business entrepreneur is in it for the long haul and not just for fast wealth is important when you start out. So let’s take a look a t a few more things you need to know when you start up in business to make sure you do last long term and can create a legacy for yourself in business.

What are the basic steps to starting your new business?

  • Choose your business idea
  • Who is your target client
  • Choosing your business name
  • Determine your business legal structure
  • Register your business with the IRS and all governing agencies
  • Get your business insurance
  • Decide your pricing
  • Create your plan

Let’s break down your basic steps so there is no confusion of what needs to be done by you. Take time and answer the questions provided. The more you can do right away the better the potential return will be. Understand that you will want to do some research to make sure you are starting a viable and profitable business.

Choosing your business idea:

  • What service do you want to provide and create an income with?
  • How much revenue will I need to create to cover business expenses and personal bills?
    • Is this a profitable business? (Is someone else doing something similar? And what are they getting paid for their similar product or service?)

Who is your target client:

  • Who do you truly want to work with?
  • What are their demographics? (Age, Income Status, Gender, Career?)
  • Why do you want to work with them?

Choosing your business name:

  • What is the name you want for your business?
  • Does someone else have that name and URL?
  • What does that name mean to you?
  • Is it easy for people to know what you do or will you need to explain it?

Determine your business legal structure:

  • Sole Proprietor
  • Limited Liability Company – LLC
  • S-Corp or C-Corp
  • You will want to research each one to figure out what legal structure is best for you. You can upgrade later down the line as you grow and dig deeper into what your business offers.

Register your business with the IRS and all governing agencies:

  • State Franchise Tax Board wants to make sure you pay your taxes too.
  • Depending on where you are operating your business from you may need a city or county license. My recommendation is to not try and skip by these important licenses. The fine for not having them is greater than the price to get them.

Get your business insurance:

  • Get insurance for your business! We live in a society where everyone want to sue you if they disagree with you. Insurance is part of normal business expenses just like a telephone and computer. You can start with a simple policy and move up to something bigger as you get bigger. (If you need an agent where you live, reach out as I bet I can find you someone who can work with you.)
  • Decide your pricing
    • How much will you charge?
    • If you broke it down, what will you be paid hourly?
    • How much time will it take you to provide the serve and value needed for that rate?
    • What research did you do to determine that price?
    • Is your pricing for a beginner in your industry or someone who has been doing it for a long time?
    • How are you going to fund the business expenses need to start up?

Create your plan:

  • I am not going to tell you to write a business plan. It is a great idea and you will need to do it to get a business loan or grant. Most people feel overwhelmed with the thought of having to write out a business plan and many businesses that are successful never wrote an official business plan.
  • It is important to have a plan in place. Write down your intentions and know what you want to create and how you are going to make that happen. That kind of a plan can get you started and if you continue doing it on a regular bases will move you from being a business hobbyist to a serious and professional business even if it is a side hustle.
    • What plan will you have in place?
      • What do you need to start your business?
      • How much will it cost?
      • Where will you get the money to start?
      • What help will you need along the way?
      • What resources do you currently have available to you?
      • What skills and resources will you need to get?
      • When do you want to launch your business?
      • Who will you reach out to first to be your first client (hint- don’t ask family)
      • Who will you get support from?

Now that you have the basic ideas of starting your side business you can get started planning how to create more cash flow and go do those things that you always wanted to do. No more excuses to stop you from getting started. Service based businesses can be the lowest cost start-up businesses there are. Kids often will begin service based business development early because they want something to do or some money for a special product they want. So if kids can do it so can you!

You have the basic tools to get started and you can visit the blog and find 21 Serviced Based Business Ideas You Can Start in 2021 for more ideas on businesses you can start.

This is a great book if you want to explore some money challenges you face or if you are thinking right now that you don’t have time, energy or money to start a business. Author Larry Winget breaks it all down in You’re Broke Because You Want to Be – How to Stop Getting By and Start Getting Ahead.

Kimberley Borgens

About the author

Kimberley Borgens was married at 18, a mother at 19, and divorced at 20, she has journeyed from being a single mom on welfare to recognizing her strengths, fighting for what she believes in, and successfully building 5 thriving businesses with hundreds of employees and million-dollar budgets. Kimberley is a speaker, business mentor, and coaches her clients to transform their small business into a thriving business. Kimberley is living her own legacy as she inspires and motivates women to be fearless, become more like a CEO of their business and life, and enjoy the freedom they've dreamed of. She knows what it's like to start from nothing and build a strong solid business and she can help you too.

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