How to Start a Service Business From Scratch

Start with one job you can do well and sell clearly

The fastest way to stall a new service business is to offer everything. “We do roofing, gutters, siding, painting and a little handyman work” sounds flexible, but a customer cannot tell what you are best at, and Google cannot tell what to show you for. Pick the one service you can deliver well today and describe it in a sentence a stranger understands: who you help, what you do, where.

You can add services later, and you will. The first one earns the reputation, the reviews and the cash that pay for the second. Owners who try to launch with five offers usually end up mediocre at all of them and tired by spring.

Be honest about the gap between doing the work and running the business. A great painter is not automatically a great estimator, scheduler, bookkeeper and salesperson. You will be all of those for a while, so write down which of those jobs you like least. That is the first thing to fix, hire for or buy a system for.

The boring setup that protects you

Decide how the business will be organized before the first invoice goes out. A sole proprietorship is the default if you do nothing, and it is simple, but it ties the business and you together legally. Many owners form a limited liability company or another entity so the business stands apart from their personal assets. The right choice depends on your state, your trade and your tax situation, so sit down with a local accountant and, if contracts or injuries are part of your work, an attorney.

Whatever you choose, get a federal tax number if you need one, open a bank account in the business’s name and run every dollar through it. The habit matters more than the account type. When business and personal money mix, bookkeeping gets harder, taxes get more expensive to untangle and anyone looking at your finances, from a lender to an auditor, has a reason to doubt them.

Check licenses before you advertise. Many trades need a state or local license, a registration, a bond or a permit to pull work. Some cities require a business license for any operation. Ask the licensing office of your state and county what applies to your trade, and keep copies of everything you hold in one folder you can find in a minute.

• Name the one service you will sell first
• Choose and form your entity with a local accountant
• Open a business bank account and a business card
• List the licenses, bonds and permits your trade needs
• Get insured before the first paid job, not after

Price the first jobs on purpose

New owners price by guessing what competitors charge and then undercutting it. It feels smart and it is a trap. The low price brings the customers who shop only on price, who complain the most and refer the least, and it leaves no room for the day a job goes wrong.

Work out what an hour of your time, a day of your crew and a truck on the road actually cost you. Add materials, fuel, insurance, software, your own pay and a cushion for callbacks and slow weeks. That number is your floor. Quote above it, and learn to say the price out loud without apologizing for it. We go deeper on this in the guide to pricing and quoting.

Your first ten customers

Your first ten customers will mostly come from people who already know you. Tell friends, family, former coworkers and neighbors exactly what you do and exactly what kind of job you want. Ask each customer for a review and a referral the day you finish, while the result is fresh and they are pleased.

Then make sure the people who hear about you can find you. A clear website, a complete Google Business Profile and a few real reviews do more than any flyer. When someone is told “call this guy,” the next thing they do is search your name. What they find in those ten seconds decides whether they call.