Service businesses can be wildly profitable.

I ran a PPC agency for 5 yrs & it generated nearly $1m in net owner earning (43% net margin, P&L link below). This cash helped me seed/grow my personal investment portfolio.

Here's how you maximize profits for a service business

Pick a niche offering

Don't run a jack of all trades service business, pick a specific niche offering. You'll be able to charge higher prices & drive down costs through systemization.

My agency turned down any client that wanted something other than PPC ads.

Pick a niche industry

The same concept as above, there are riches in niches. Picking an industry will give you an edge over generalist competitors.

My PPC agency specialized in medical aesthetics. This allowed us to understand clients better & become a leader in the niche.

Build a sales pipeline

Don't rely on referrals, word of mouth, or your rep. You need a predictable/controllable outbound approach to acquiring clients.

Predictable sales = predictable profits.

Cold-calling was at the heart of my agency, more here: https://twitter.com/jayvasdigital/status/1275058046717308928?s=20

Build processes & systems

Many service biz owners get passionate about their craft and aim to deliver a bespoke experience to each client.

Unfortunately, doing this will suck up all your time, profits, or both. Treat your service business like its a factory.

Build processes & systems (cont.)

Your service should be delivered on a conveyor belt & anyone that can read the standard operating manual can pull the levers to work the machine.

The systems I built at my agency allowed even an entry-level employee to operate at a high level.

Automate/outsource

Implement technology to automate the processes/systems you've built and or outsource the labour to low-cost countries.

We built various tools to automate campaign setup, research, ad management, & client communication. We also heavily utilized offshore labor.

For more details on maximizing profits for a service business, including my 5-year P&L, check out my blog post on this topic here: https://jayvas.com/how-to-maximize-profits-for-your-service-business/

Many of these principles can be applied to SaaS businesses as well in order to maximize profitability.

-niche down (product offering/industry)
-build a sales pipeline (outbound)
-build processes/systems (on boarding, surveys, tickets, etc)
-automate/outsource (sales, CS, dev)