Do you need a business plan for your Home Services Business?
If so, you’re not alone…
Statistics show that there are some entrepreneurs who either have no clue how to write a business plan or they simply skip writing a plan altogether because they don’t want to face the reality that their business idea might not work out.
And so, they’ll go the trial and error route in hopes that everything will work out fine.
Afterall, entrepreneurship is about creating risks… Right?
According to sites like Bloomberg and Forbes, 80% of businesses fail within the first 2 years. Even if they make it past the first 2 years, many don’t make it past 5 years.
Yet, in spite of these statistics, hundreds of thousands of new businesses are created each year.
Do they have an actual business plan?
It’s highly doubtful and they’ll likely just jump in the trenches, hoping to succeed.
If you have an HVAC Business, a roofing business, a plumbing business, or even a window installation business, then you might be wondering if you need a business plan or if your current business plan is positioning your company for profit.
By the end of this post, you’ll have the key elements needed to craft a business plan in less than 1 hour and it can help put your business on the profitable path it was meant to be on.
Can this one page business plan really help?
My thing is, if you don’t even have a plan… it certainly won’t hurt.
Because having a plan in place is better than having no plan at all. It reminds me of a Benjamin Franklin quote I often hear…
“If you fail to plan, you plan to fail” ~ Benjamin Franklin
With that in mind… How about we plan to succeed?
First off, the one page business plan I’m going to discuss is something I can’t take any credit for. It was actually created by an entrepreneur by the name of Alex Osterwalder of Strategyzer.com.
It’s a template that has been tested and proven to help startup businesses get going with an actual plan in place.
It’s also a plan that even an established business can use, especially if they want to go back to the drawing board and improve upon what they’re already doing.
Let’s discuss the key elements of Alex’s plan and what I’ll do is create a business plan sample pdf that Home Service Contractors can use to help write their own business plan.
When planning out your value propositions, it’s important to closely examine the products and services you offer and identify exactly how they will benefit your clients or customers. What problems will they solve for your most ideal customer? What do your customers need that you can provide beyond the actual product or service itself?
It’s all about the value!
I come from the school of “always provide value upfront”…
Before you even make your pitch….
Before you even close the deal…
You must figure out a way to provide value upfront.
Use your expertise and position your products and services as value added propositions. Also, don’t confuse benefits and features.
Features are the attributes of what you offer.
Benefits are what your clients or customers gain from those attributes.
For example, if you install HVAC systems, key features could be energy efficiency and noise reduction, while the benefits could be a reduction in energy costs and sleeping comfortably at night. It’s all about establishing the value of your products and services. Again, it’s always best to do that up front.
Who are you creating value for? This comes down to knowing who your ideal customers are and segmenting them into categories based on who you’re creating the value for.
Segmenting is something I don’t see entrepreneurs do enough. Especially, in the home services industry. Whenever I sit down with an entrepreneur I’m consulting and ask “Who is your most ideal customer?”, a typical response I get is “everybody is my customer because everybody needs my product”.
Sounds really good? However, it couldn’t be further from the truth.
Because, everyone won’t see it that way. And if everyone won’t see it that way, then you’ll have a difficult time marketing to everyone. That’s why it’s better to segment your customer base into categories of people who are most ideal for your business. Identify the ideal age, gender, location, home type, common interests, etc. You have to get really specific
Market to someone, instead of everyone!
For example, if you’re a Roofing Contractor, you’ll obviously want to go after residential homes and commercial buildings.
If we just look at the residential aspect, you can create segments such as “residential homes created before 2003 that have certain types of roofing materials”. Obviously you want to be specific when it comes to the type of roofing materials, but the point is to segment that customer into a specific category and market to them accordingly.
The main reason for doing this is because you can now have a custom tailored message that speaks to that particular segment of the market.
When you can establish the value of your products and services, you’re perfectly positioned to build a relationship with your customers.
With that said, you want to plan how your company will handle customers….
From acquiring customers, to following up with them, to generating repeat business and providing value in a way that effortlessly produces referrals.
Part of generating repeat business is addressing customer interactions among employees. This will play a huge role in managing your reputation.
For example, if you run a plumbing business, it’s important that you establish a code of contact with your plumbing technicians that they are expected to follow when interacting with customers. They’re on the front line and create first and lasting impressions in the minds of your customers when it comes to how they see your company.
I’m sure you’ve seen negative online reviews that show the customer giving companies low star ratings because they had to deal with a technician who had a bad attitude or who they felt took advantage of them instead of explaining what the actual problem was.
Don’t just gloss over this because your reputation relies so heavily on how your company establishes the relationship.
Therefore, it’s imperative that you plan out how your employees will interact with that customer and how you’ll continue to build upon the relationship through strategic follow up.
How do you plan to reach your most ideal customers? How will you distribute your products and services to your customers?
Do you plan to advertise online or offline? Have you considered doing both?
If you’re marketing and advertising offline, then you need to identify the different channels that best allow you to reach your most ideal customers.
For example, if you install windows, then when marketing offline you might consider going door to door and speak with home owners about replacing their windows. As you speak to them you’ll establish the value for the types of windows you offer.
You could do a demonstration in front of a Lowes or a Home Depot as people enter and exit. Maybe you want to consider advertising on the radio or television if it’s in your budget to do so.
If you’re marketing online, then again it’s all about identifying the different channels that best allow you to reach your most ideal customers.
For example, if you’re an HVAC Contractor who replaces HVAC Systems, you might want to consider having a website. However, just having a website alone is not marketing and this is a misconception that many business owners believe when launching. Just because you have a website does not mean people will flock to it right away.
You still have to focus on specific online marketing channels such as Pay Per Click (PPC) advertising campaigns via sites like Google, Facebook, YouTube, Twitter, etc. Advertising on these platforms and pointing back to your website can help bring in traffic very quickly.
You could also do Email Marketing, which is by far one of the best ways to follow up with residential leads and create repeat business. Email marketing should focus on more than just selling. It should also focus on building a relationship with your ideal customers and providing value that positions you as an authority.
There are many more offline and online channels that we can discuss, but the bottom line is that when you’re creating your plan, you should identify these channels upfront.
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How is your current business model allowing you to capture value? How are you actually making money? What value is the customer actually paying for?
I’m a big advocate for providing value upfront. When you do this, you’re able to attract more customers this way. However, if you’re not able to capture value in the form of revenue, then your business won’t grow.
Therefore, it’s important to adopt the necessary pricing mechanisms that will help you capture value in such a way that your able to meet the demands of the market place while making a profit for your business.
It’s not so much, what are you going to charge, but the journey a prospect goes from to transition from lead to deal. It’s no coincidence that when you switch the “L” and the “D” in the word Lead, you get the word Deal.
That’s because there is a connection there that when made can allow your business to produce a profit. What model you use to do that, will completely depend on you.
For example, some home service companies have models that allow them to offer free diagnostics up front. The intention is to simply get into the home. Once inside, they are able to provide value via the diagnostic.
After providing this free service, they give the customer the results and if they need to address something in particular they can charge a fee for the appropriate maintenance or repair service. They can even attempt to do a full service agreement, so the customer won’t have to constantly worry about repairs.
Other models may not offer a free service upfront. This might be ideal depending on the market your company is doing business in. At the end of the day, it’s all about the demand for your product or service and your ability to market it accordingly. The more you interact with customers and measure your results, the better you’ll know what model to use.
What assets or resources do you need to make your business model work? Identify your tangible and intangible assets. Tangible assets are assets that have a physical existence. They can be touched or felt.
For example, if you’re running a home services business, then a tangible asset you might need is a utility van that carries all the parts and equipment needed to fulfill a service or transport your product(s). This also includes the inventory of products themselves, office space, supplies, computers/field tablets, etc.
Intangible assets are assets that have no physical existence and cannot be touched or felt.
For example, your website could be considered an intangible asset. Your brand, your logo, special invoicing/billing software, and even a customer list can all serve as intangible assets.
Once you sit down and list these tangible and intangible assets out, you’ll know what is necessary for making your model work. As you begin implementing your plan, you’ll see which assets are helping you become productive and which are not.
Who are the essential partners and suppliers for your business that keep it moving forward?
I’m not talking about part ownership of your business. I’m talking about affiliations and alliances you can form with other businesses.
Who will supply the tools for your service technicians? Who will manufacture the products you intend to sell to your customers?
Are there joint ventures you can form with local businesses in the area?
When it comes to choosing which businesses to joint venture with, it’s best to go with organizations who do business with your most ideal customer.
For example if you’re targeting home owners, then you might want to consider partnering with your local Home Depot or Lowes.
In fact… Did you know that Home Depot offers an Authorized Service Provider program? You literally fill out an application and allow them to perform a background check on your business. Then what happens from there is between you and Home Depot.
The reason this type of joint venture makes sense is because not only has Home Depot established their brand, they also attract your most ideal customers day in and day out. Hundreds of home owners visit Home Depot everyday.
Aside from that, who else could help you acquire customers while you focus on the operational aspects of your business?
You could partner with other professionals in the home services industry that provide different products or services to your ideal customer.
Don’t forget about marketing consultants..
For example, I’m a digital marketing consultant. (Yes, I’m using myself as an example. Why wouldn’t I? 😉 ) Anyway, I partner with small business owners and help them with advertising on platforms like Google, Facebook, YouTube, etc. I also help with web design and content marketing, along with strategic business leadership skills for both the business owner and their team.
It’s an essential partnership they form with me to help position their business as an authority in the market place and acquire more customers online.
Therefore, as you can see, I play a specific role for their business.
That’s the thing…
Not only is it important to identify the key organizations and suppliers for your business… You must also identify what role they play in your business.
Ask yourself the following questions…
Will this partnership fit my current business model?
Will it help my business grow?
Will it take me form where I am now to where I want to be in the near future?
What things do you need to do each day that are essential for moving your business forward? This step all comes down to productivity and identifying the key role your business plays within the market.
What do you do?
Also, understand the difference between “busy” and productive”.
Busy is simply having a lot of work to do. But being busy, doesn’t necessarily mean that you’re being productive.
Productive is doing the work necessary to help achieve the results you want for your business.
Therefore, you need to identify what is essential for growing your business. Eliminate or reduce the work that is wasting your time and not allowing you to be productive. You could also outsource busy (yet necessary) work to other companies. While there is a cost involved with this, the key thing is if it will still allow your business to be productive.
Once we closely examine the necessary costs and expenses for your key tangible and intangible resources, partnerships, and activities, we’ll have a better operational picture.
What kind of budget will you have for your business? What are the operational costs and expenses to run your business?
For example, when it comes to advertising your business…
How much does it cost to acquire a lead? (CostPer Lead or CPL) What is the Life Time Value (LTV) of a customer? What does it cost for someone to click an ad, subscribe to your website, or even make a purchase (CPA or Cost Per Action)?
These are all metrics you need to consider, whether you advertise online or offline.
Now that you know the 9 essential elements of a quick and powerful business plan, it’s time to either create your own business plan for the first time or tweak your current business plan to fit whatever is needed to help take your business to the next level.
The Business Plan Sample PDF
To help you with that I’ve attached a blank business plan sample pdf you can use as a guide. It’s the business model canvas that Strategyzer uses.
Our One Page Home Service Plan Multiplier
For those of you who are looking for a plan to help with marketing and acquiring customers, you can go ahead and check that out below. This plan specifically helps Home Service Contractors with getting more service calls, service agreements, and sell more high end products.
You can download that plan for free as well. Click the image below:
Hope that helps!
Digital Marketing Consultant