A purely service business idea can be very advantageous startup option. The cost to launch is generally lower than product-based startups and the preparations generally require less lead time. However, the downside is that a pure service venture is inherently limited in sales potential. That is, your maximum possible sales are limited by the number of hours you are able to turn in to billable work. The best way to improve profitability in a service-based industry is to add complementary physical product to your offering.

Most services lend themselves to adding physical product, whether a single item or a line of appropriate add-ons. Some examples:

Landscaping/Lawn Service — Resale of specialty plants; landscape materials such as tiles, bricks, timbers; decorative lawn items; indoor garden setups; door mats Carpet Cleaning: Door mats; spot cleaner; air freshener Auto Detailing: Auto wipes; auto storage accessories; emergency road kits; auto scents Business Consultant: Time-management systems; software; customized forms; office organization supplies Massage Therapist: Aromatherapy supplies; stress balls; books; relaxation music cds; body lotions

The advantage of adding physical product to your service is obvious — you can increase sales without increasing your customer base. Don’t worry about seeming pushy in upselling your clients. As long as the products you offer make sense with your services and benefit the customer in a clearly defined manner, most will appreciate you making their lives a bit easier. And, offering physical product is quickly becoming the norm. Training consultants sell their workbooks to the trainees, national carpet cleaning companies offer entire catalogs of products to protect your carpet between cleanings, and doctors sell basic supplies out of the office. As long as the products you sell are directly related to what you do, your customers won’t think anything of you leaving a brochure or telling them about your products.

If you are not sure what might work for your particular service business, start by checking out the competition. Even if you serve only your community, look outside your area for similar companies and see what they have added to their sales efforts. Check your trade association for ideas as well. Brainstorm a list of complementary businesses and products — what else fits in and around your niche? All hair salons (formerly a purely service venture) now sell hair and skin care products as standard…and expect around 20% to 30% of their gross sales to come from the physical products! If your business is dog training, complementary companies would include dog sitters, veterinarians, pet food suppliers, dog sports companies, and the like. Consider whether the products they offer could be easily integrated into your service business. If your business is training or consulting, brainstorm products you could develop as add-ons to help your trainees maintain the lessons you teach. Whatever your service, be creative in identifying potential physical product to increase sales.

Talk to your current clients about your plan to add physical product. You may be surprised at the great ideas they come up with. Test a variety of products and brands. Survey your clients and always be looking for opportunities to add new revenue streams. Think big — a line of products that increases your bottom line by 20% or more makes a huge difference over time!

By: K. MacKillop

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