5 Biggest Challenges of Running a Service-Based Business

When you run a service-based business, you can leverage your unique skills to make your venture profitable. But just like with any business, you may encounter some challenges down the road.

The strategic management of a service business is unique and requires a different way of strategic thinking since your services are the primary entity you're selling.

Your business depends entirely on maintaining high service quality at all times. Customers and new prospects will only be attracted to your business if you give them an upscale experience.

As a leader, being aware of the challenges your business is facing can help you anticipate and find a specific solution to keep your business running.

Challenges You May Face in Your Service-Based Business

Although you may have done all it takes to grow your business, you’re bound to face challenges, which can hinder your progress if not fixed. They include:

1. Time and Project Management

In every team under your leadership, you'll always encounter one employee who will need help to overcome their problems for the project to be completed on time.

Since you've worked with your team on various projects, you already know which member has time management issues. You'll need to monitor the situation closely and step in when necessary.

Make a detailed schedule for each project and let everyone know their responsibilities regarding deadlines so you can keep tabs and solve time management issues on time.

Keep channels of communication open so you can track the performance and progress of each employee. Consequently, you'll find out if there's an issue and deal with it before the project's deadline. Use technology like project management tools to monitor and remind them of the deadlines and communicate effectively with each other.

2. Hiring a Skilled Workforce

Your employees should be skilled enough to carry out assigned tasks. Some projects can be quite challenging and may demand a particular level of knowledge and expertise. You have to decide whether you'd hire someone skilled or train your existing workforce to handle the project.

The best way to go about this is to document the vital skill sets needed to accomplish the project. Analyze your employees' strengths and weaknesses, and if necessary, you can train them to improve their knowledge and fill the skill gaps.

However, if you can bear the cost of hiring additional skills, then go for it. This might be a better long-term solution if it means your existing employees won’t have to abandon current positions where they’re performing well.

3. Client Communication and Management

As a service provider, you'll attract different customers with varied needs. There will be customers who want to use your services (users), customers who purchase your services (buyers), and those funding transactions (funders).

These customers could be three different people with different needs and benefits or just one person whose needs you have to understand very well. Know your customers, develop relationships with them, and manage them well.

Remember, you're responsible for coordinating everything in your organization, from resource management, marketing integration to people management, and more.

Knowing your customers will help you organize your business effectively to meet your customers' demands at all touchpoints.

Communication is crucial in every business. Whether through email, text messages, live chat, or social page, make it happen. Create an email list to communicate offers and new services to your clients, create an app, or address their concerns and inquiries via live chat, and so on.

Put software in place that'll monitor their activities and behavior to help you improve your services. Just stay in touch, and you'll grow your customer base.

4. Finding New Clients and Standing Out From the Competition

Getting new clients as a service-based entrepreneur isn't easy. You've got to market your services intensively.

You must find tactics that'll help you attract new clients and retain your existing ones. Appealing to your prospects' emotions can help you a great deal when pitching your services. Often, emotions fuel people's decision making. Time-limited offers are often a successful method because they create a feeling of urgency and fear of missing out.

Remember to appeal to logic as well. Be clear upfront about how your service helps customers solve a real problem –  their revenue will increase, operations will be streamlined, and so on.

Sometimes your prospects need proof to see the value of your services. You can use social proof to let them know that you've served other people that benefited a great deal from your services. Testimonials from previous satisfied customers can help sell your services and increase the chances of winning more business.

Building a brand that differentiates your company is also essential to your company's success. Prospects often look for something to connect to, and a strong brand will give them a reason to choose you over your competitors. Define what your organization stands for, and what you want it to be known for.

Your unique brand perspective will make you stand out, and you should strive to communicate it to the people to connect with them.

5. Resource Management

Managing resources can be quite challenging if you have a lot of equipment distributed between employees or locations. You'll need to effectively track everything in your firm so you can quickly identify what is broken or missing, and what gets used to a lot that might be due for maintenance.

Well-managed resources can reduce company costs and help you track any missing equipment or data. One of the worst things that can happen is to start working on a project only to find out you’re missing something or it doesn’t work properly. On top of losing money on project delays, you also have to go out and buy new equipment.

Since you require updated, accurate resource utilization and skills information at all times, real-time analytics and reporting tools can help you manage your resources effectively. A cloud-based piece of software that can be used with a smartphone won’t be a big burden to your team, but it will give you the visibility you need to allocate and track your resources and predict future needs confidently.

What It Takes to Sell Your Services

With the right methods and tools, you can make your prospects see the value you're offering. You can sell more effectively if you focus on demonstrating that you understand your customers' pain points and know how to solve them.

When running your service business, you have to sell yourself the same way you're selling your business. Make your prospects see you as someone they can trust and rely on, and as someone who can solve their problems.

You'll also need to make sure that your employees can deliver the same service standard that you promise to your clients. If just one employee is underperforming, it reflects negatively on your entire business. Make regular feedback and training a priority.

Running a service-based business doesn't have to be challenging. It's all about strategic planning and getting a little boost from technology. Identify areas in your business that you’re not happy with, and search for targeted solutions for each of these problems before they escalate.

Build strong connections, develop relationships, and build a rapport. This way, you'll have more chances of closing deals and make your service business a success


Author bio

Ashley Wilson is a content creator, writing about business and tech. She has been known to reference movies in casual conversation and enjoys baking homemade treats for her husband and their two felines, Lady and Gaga. You can get in touch with Ashley via Twitter.

Mercy - CBNation

This is a post from a CBNation writer. CBNation is a Business to Business (B2B) Brand focusing on increasing the visibility of and providing resources for CEOs, entrepreneurs and business owners. CBNation consists of blogs(, podcasts ( and videos ( CBNation is proudly powered by Blue 16 Media.

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