Starting a service-based business can be an exciting prospect for aspiring entrepreneurs. It provides plenty of opportunities for financial growth and independence.
Unlike product-based businesses, service businesses rely on providing valuable skills and expertise to prospective clients. Whether you have a passion for coaching, design, tutoring, catering, or finance, the possibilities are endless.
Despite this, launching your own service business does come with its fair share of challenges. From choosing your niche and developing a client base to launching a company website – there’s a great deal to consider.
Thankfully, we’ve put together this handy guide that will help you through the process, taking you through each essential step to get your service-based business off the ground.
What is a service-based business?
Before we dive straight in, let’s be clear on what a service-based business really is. A service-based business provides services, usually personal, business, or social services, instead of making or selling products to clients.
Think of it this way - while shampoo is a product, a haircut is a service. Similarly, while an online course is a product, online coaching is a service.
There’s no specific set of qualifications required to start a service-based business, as these types of businesses span a wide range of industries. So long as you have the appropriate skills and expertise, anyone can start their own service-based venture.
Why start a service business in 2025?
Service-based entrepreneurs will confirm that in today’s business landscape, service-based companies are crucial in driving economic growth and meeting a diverse range of consumer needs.
They come with a wealth of benefits for prospective startups, including low overhead costs, and flexibility, to name a few. Here, we take a look at some of the key reasons service-based businesses are so relevant in today’s economy.
They’re simple to set up
One of the main advantages of setting up a service-based business is they’re incredibly straightforward to set up compared to other business models. To start a service business, you’ll require little more than a license, a smartphone, and your own skills going forward.
It’s a much easier market to dominate, with no need to spend a ton of cash marketing yourself when there’s already a great deal of demand for your services.
Competing with others providing similar services involves offering better prices, service, and quality. If another competitor in the industry is offering poor or outdated methods, you can make up for those shortcomings.
Low overhead costs
One of the biggest financial benefits of starting a service-based business is that the overhead costs are incredibly low. The services you provide are intangible, which means they can’t be consumed or stored.
Unlike product-based businesses, you won’t need to worry about maintaining inventory, warehousing, or distribution.
All you’ll need to do is cover the cost of your workers and overheads. Additionally, you’ll need to buy the basic tools to get started with your venture. Often, this simply involves a PC and a stable internet connection.
Flexible hours
This is one of the most attractive prospects for aspiring service-based entrepreneurs – the ability to set your own hours in keeping with your schedule. You can work where you want, when you want, and decide how much time you need to dedicate to your venture.
This means ditching the drudgery of that oft-dreaded 9-5, dictating when you need to be sat at your desk, giving you the flexibility you need to thrive.
Brand recognition
Service-based businesses have the advantage of scaling their brand’s reputation quickly. By providing consistent and exceptional service regularly, businesses can foster strong relationships and loyalty among customers. Satisfied customers are likely to recommend you to others, building your portfolio via word of mouth.
It's easier to be recognized as an expert in your field or become known as the best provider in your area. If you spend your time focusing on results, you’re likely to gain visibility and momentum.
Diverse revenue streams
Service-based businesses can also provide diverse revenue streams, offering a variety of services appealing to different customer needs and preferences. For example, you could offer tiered service packages to prospective clients.
If you were someone who owned a digital marketing agency, you could offer these clients basic, standard, and premium packages, each with its own levels of service. These might include social media marketing, content development, and end-to-end campaign management, depending on the customer's specific needs.
You could even form partnerships with similar businesses to diversify your income. For example, if you’re a personal trainer, you could team up with a licensed nutritionist to offer combined fitness and dietary plans, helping clients achieve their health goals with more tailored services.
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How to start a service-based business
Now we’ve taken a look at some of the key benefits associated with service-based businesses, we can move on to discuss how you can get started with yours.
No matter what industry you want to break into, there are some fundamentals you’ll need to know to start a service business. From creating your business plan to developing an online presence, there are multiple things to consider to give yourself the best possible chance of success.
1. Refine your business idea
With so many service business ideas out there to choose from, ultimately, you’ll want to settle on something experiencing considerable demand.
You’ll need to do your homework and see where your service idea fits in the marketplace. You can ask relatives, friends, acquaintances, and community members who fit your ideal target persona, and use the information to figure out what your audience wants.
What is your target persona? It’s a fictitious person that a marketer creates to help them better understand how to address their target audience. You’ll find and gather data about your top consumers to build a profile of that person, along with their needs, and interests.
For example, let’s say you were starting a home organization business. Based on customer data, and any other information you’ve gathered, consider your audience’s needs and pain points.
You might come up with a target persona named Sue. Sue is 35 years old and works as a freelance writer and designer. She makes a yearly income of $35,000 and lives by herself in an apartment.
Her main pain point is that she has a small space and feels overwhelmed by the clutter, but she doesn’t know where to start with downsizing. She wants to reduce possessions and create a more minimalist environment.
Sue’s preferred service is hands-on guidance to help with decluttering, choosing what to keep or donate, and finding storage solutions to minimize visual clutter.
Once you’ve defined one target persona like the one above, it will become easier to generate more and more fictitious consumers. Ultimately, this will help guide your marketing efforts, enabling you to run tailored campaigns that speak directly to the pain points and goals of each persona.
2. Create a business plan
Now that you’ve developed an idea for your service-based business, and generated key target personas who benefit from your help, you can start to delve into a more detailed business plan.
Entrepreneurs who formulate a business plan are more likely to achieve ‘venture viability’ (a favorable judgment of a business's potential to be profitable and sustainable over time).
A business plan is your master blueprint, helping you define core concepts and go through every step of execution. Make your plan as detailed as possible, outlining the purpose, operations, finances, management structure, and future revenue predictions of your venture.
The most important things to include in your business plan are:
- Mission statement: The ‘why’ of your business.
- Business idea and service offering: What your business will offer to generate money.
- Marketing and sales strategy: How you plan to promote your business.
- Operational plan: How you plan to execute your business goals.
- Financial plan: How you plan to fund your business, including startup costs like equipment, insurance, and so on.
At first, putting together a business plan can feel a tad overwhelming, but it will help you outline your ambitions and still factor in logistics such as budget.
3. Register your business
Registering your business is one of the longest steps for any prospective owner, so it’s good to get started as early as possible. It’s vital that you register your business, as it will build your credibility and ensure everything’s legally sound.
Registering your business gives you an Employer Identification Number (EIN) to use for tax purposes (and when hiring future employees), and also lets you obtain corporate bank accounts and small business loans.
If you fail to register your business, this can lead to several problems further down the road, including penalties. Bear in mind that the process and requirements to register your business will vary according to country, state, and city, so make sure to do the appropriate research first.
If you’re struggling to get to grips with the legal side of things, hiring a small business lawyer can be a good idea.
4. Sort out finances
Though some businesses can be started on a shoestring budget, this isn’t always the case. More often than not, you’ll need to get your finances in order before launching your venture.
This will help you figure out whether you need to apply for a loan, find an investor, or start saving yourself.
As we mentioned above, service-based businesses are often attractive to first-time owners due to the low overhead costs, but there are still usually some startup fees to think about. For example, if you’re starting a cleaning business, there’s a range of specialized tools and products you’ll need to purchase to get started.
You’ll need things like rubber gloves, cleaning supplies, and vacuum cleaners before you start accepting jobs. These are called ‘sunk’ costs, which means the money spent will not be regained.
You can create a list of things you’ll need to get started with your business, and factor these into your overall budget.
Along with figuring out your budget, setting your prices is another thing you’ll need to decide on. You need to find the right price point so you’re not working for little to zero profit, and you’re not overcharging so no one wants to hire you. Here are some pricing strategies you can use for your business:
- Hourly rate: One of the most widely used forms of pricing, this is a business model where you charge your clients based on the amount of time you’ve spent working on a project.
- Package pricing: Similar to charging a flat fee, this option lets you bundle two or more complementary services together.
- Value-based pricing: This is when a company determines the pricing of a product or service by accounting for their customer's perception of its value, rather than exclusively focusing on production costs or the prices set by competitors.
Initially, you might set out introductory costs that are generally lower than average when first starting out, then gradually increase prices as your reputation builds.
Bear in mind this price point isn’t set in stone. You can test the waters to see how customers respond, then adjust accordingly.
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5. Develop your skills
Starting a service-based business has never been easier, but there are a hoard of other people out there who likely have the same idea as you. This means you need to stand out from the crowd. What better way to do this than by leveling up your professional skills?
Educating yourself on business management and strategy can teach you how to market services effectively and understand customer behavior. Learning about things like digital marketing, social media strategies, and customer retention can help you make more informed decisions that drive growth.
The business world is constantly evolving, which means taking a course can make you aware of new trends, technologies, and best practices within the service industry, helping you to adapt and gain an edge over your competitors.
Find the top online business courses on Whop and learn how you can build your first business.
6. Spread the word
Next up, you’ll need to effectively market your business to ensure it reaches the appropriate customer base. Here are some of the best ways to boost traffic and promote your business.
📧 Email marketing: Email marketing can help build awareness around your brand, and maintain awareness through scheduled reminders. You can create customized email marketing campaigns and newsletters to drive traffic to your website or social media pages. As you attract more clients, you'll expand your email list, building a growing base of loyal customers.
🗣️ Word of mouth: The most traditional way to build a returning customer base, word of mouth focuses on delivering exceptional services and actively encouraging testimonials online. Be sure to ask your clients to leave a detailed review, sharing their positive experiences with future customers and acting as brand advocates.
🖥️ Social media: Social media is one of the top ways to market your services online. Find out which social media channels your target audience engages with the most, whether that’s Facebook, Instagram, TikTok, or LinkedIn.
You can post images and videos of your business on these platforms, as well as creating shareable content that’s relevant to your audience base. For example, if you’re starting a mobile dog grooming business, you can hand out important information like how to check for parasite infestations and skin issues.
7. Collect regular feedback
The key to any successful business or service is the ability to process constructive feedback from customers.
You should always aim to provide excellent customer service and support, prioritizing your relationships with your clients. One of the best ways to do this is via feedback surveys. These will help you identify any areas your business is lacking, and address issues as soon as they arise.
It turns out that 93% of customers will read online reviews before making a purchase. So naturally, businesses with more positive reviews will appear more credible and trustworthy. That’s why it’s so important to collect feedback surveys, to ensure your clients are satisfied with your work.
How to start your own service business with Whop
Now we’ve covered the essentials of developing your service business, it’s time to discuss the final step – launching your service online.
Below, you’ll find a quick step-by-step guide on how to start your service-based business on Whop.
1. Sign up
Signing up is super easy. Head over to the homepage at Whop.com and click the orange button that says, “Sign up”.
Once you’ve entered a few quick details, click “Build your whop” located in the top right of the screen.
2. Create your whop
After this, you’ll be directed to the onboarding page. Click “Create a new organization” and enter a name. If you’ve not decided on your company name yet, don’t worry, this can be changed later.
Next, you’ll need to enter details about your business, and how it may be of service to other people.
Wait a few seconds and you’ll be ready to start fine-tuning your whop.
3. Set your pricing
After this, you can start setting customer fees. Click on “Manage” in the top right and then “Manage pricing”.
Click, “+ Add pricing option” on the panel that will appear on the right of your screen. Then, click “Paid” and “Continue”.
You can choose either “Subscription” or “Single payment” for access to your whop’s services.
4. Add apps to your whop
After you’ve set up your pricing, you can start adding apps to your Whop page. You can add courses, digital products, files, content, Discord chats, web apps, and so much more! Feel free to play around with the apps, before launching your business.
You can also customize your whop with logos, branding, descriptions, and FAQs. You can even add affiliates.
What kind of services can you sell on Whop?
With Whop you can sell almost any kind of service - as long as it meets our terms and conditions.
Here are a few examples of what you can sell with Whop. All of the following examples are real service-based whops.
Coaching services
Coaching is one of the easiest services to sell. While you do have to have existing knowledge of the coaching niche you're going into, all you need is a computer and a camera. You can sell coaching service in any realm that you like - from life coaching, to business coaching, and even dating coaching services.
To create your coaching service on whop, simply create your whop, add the video calls app for live calls, the chat app for conversation, and the calendar app to book one-on-one private sessions.
Fitness and nutrition services
Avid cook or fitness fanatic? Then you can start a service business selling recipes, meal plans, workout routines, or all three.
To sell fitness or nutrition services with Whop you must create your whop, add the files app to share any digital recipes or guidebooks, the courses app to share any self-led education, and the chat app for conversation.
Sports betting advice
Whop is home to over a thousand sports picks whops. If you love sports betting then you can sell your expertise in a paid community.
All you have to do is create your whop, add the apps you need (forums for sharing picks, chat for community conversation, course for sports betting education) and start getting paid for your sports picks service.
Marketing services
Now the first three services we have looked at focus on sharing your advice, whether that's betting advice, fitness advice, or coaching. This option is more about selling a skill.
You can sell your marketing services with Whop. How you create your whop is up to you - you may want to use the files app to share deliverables and the video calls app for client calls. And don't forget to share a portfolio.
This option also relates closely to other creative services you can sell with Whop, like writing services and graphic design services.
Tutoring services
This one's for the nerds - tutoring services. While you can do this in-person, it's much easier to start an online tutoring service. By tutoring online you don't have to pay for fuel to travel to student's houses, consumables like pens and workbooks, or third-party insurance.
Instead you create your whop, add the video calls app for tutor sessions, the courses app to share educational content, and the files app to share worksheets.
Physical services
Now, we wanted to finish by showing how you can create a physical service-based business on Whop.
While Whop is a digital platform you can still use it to book physical services. Think of your whop as the landing hub of your business. With the forums app, files app, and calendar app, customers can come to your whop to view your business, save any documentation, and book in a service with you.
Start a service-based business today with Whop
Launching a business is definitely a challenge, but it doesn't have to feel overwhelming. You've got the steps mapped out, but to make that dream a reality and turn it into a money-maker, you’ll need the right resources and support.
That’s where Whop comes in.
With Whop comprehensive platform you can seamlessly manage sales, payments, and community engagement, all conveniently stacked in your dashboard.
You can shape your business completely with chat channels, forums, events, products, live video calls, and so much more. Whop allows businesses to manage clients and their subscriptions seamlessly. Whether you're offering one-time services or ongoing service packages, you can track client progress, and payments, all in one handy space.
So, what are you waiting for? Start building your whop and rake in the cash today!
FAQ
How do I choose the right target audience for my service business?
It can be super tricky to figure out who your main target audience is, especially if you haven’t done any market research beforehand.
The best way to determine your primary audience is by asking – who will benefit the most from the service I have to offer? Who has the most money to spend on my services?
You might need to consider if there are any standing in the way of you and your target audience. For example, they simply don’t know it exists yet.
Bear in mind, however, that target audiences don’t always need to rely on demographics. Sometimes it’s more efficient to find out where people hang out online or which social media platforms they frequent the most.
How do I price my service business appropriately?
To price your business’s services appropriately, you need to weigh up what it takes to remain competitive while still driving a profit.
To determine the most realistic rate of pay for business expenses, some key questions you’ll need to assess include:
- How much are my competitors charging?
- What is the going rate in my local area?
- If I charge less than other competitors, will I still be able to make a profit?
- If I charge more, will I still be able to compete?
How do I choose a name for my service-based business?
Choosing a name for your business is a huge step, as it plays a huge role in how future clients view your brand. You want to make sure it’s clear, memorable, and unique.
Make sure the name provides an idea of what services you have to offer, for example, a cleaning business might be called ‘Dust Busters,’ ‘The Cleaning Crew,’ or ‘Tidy Touch.’
Avoid names that seem too generic, or that you’ve heard multiple times before. This will help you stand out from the crowd, and avoid your business getting mixed up with another offering similar services.
Finally, make sure your business name is easy to pronounce, spell, and remember so that it's easy for future clients to find you and refer you to others.
Which service business is most profitable?
There are a wealth of service-based businesses out there generating large profits. Some of the most popular sectors include:
- Fitness coaching.
- Event planning.
- Technology services and software development.
- Home cleaning services.
- Real estate.
- Digital marketing.
- Ecommerce.
- Consulting.
What is the easiest service business to start?
The easy service-based businesses to start are those where you are the sole proprietor and you’re working from home. When you start adding physical locations and additional employees, this starts to build additional expenses.
What is the hardest thing to overcome when starting a business?
One of the biggest challenges to overcome when starting a new business is securing business investors and financing sources. Not every business needs an immediate, intravenous supply of cash to get started, but you need to ensure you have enough to keep it running in the long term.
What is the biggest disadvantage of a service-based business vs product-based business?
The main disadvantage of service-based businesses is that they can be labor-intensive and scale more slowly, depending on the availability and expertise of personnel.
In contrast, a product-based business is usually faster to scale as a result of manufacturing and distribution. Despite this, the inventory management and upfront product investments of product-based businesses can be a significant disadvantage.
