January 28, 2021
Average Read Time: 4 minutes
So, you want to start a personal services business, or grow the one you already have? Your timing is pretty good.
After the coronavirus flattened the industry’s growth rate to nearly nothing in 2020, the market is expected to bounce back and grow at a CAGR of 8% beginning this year and through 2023. Now is a good time to try to get your piece of that trillion-dollar pie.
Remember, though, that you’ll be joining millions of beauty, fitness, tutoring, pet care, and other providers as they resuscitate their businesses. Running a small business can be tough, whether or not we’re in the middle of a global health crisis, and personal services is no exception. That’s why evaluating and optimizing your business’s financial and technology foundation is so important right now.
Fierce Competition, Transparent Pricing
As you look to boost your business, consider this one major reality: The personal services industry is highly competitive and price sensitive – and that pricing is often extremely transparent, more so than among many other service businesses. Take a look at any neighborhood Facebook page to see open discussion about all types of service providers and their cost. People who typically shun financial discussions think nothing of asking their neighbors what they pay for hair coloring or pet care – and make decisions accordingly. As a result, you must be very strategic about your pricing to ensure that it is in line with the competition so followers don’t write you off at first glance.
And speaking of social media and transparency . . . New hairstyles, increased fitness, weight loss, organized closets, and all things catering to our dogs and cats: the most personal of personal services generate hundreds of thousands of social media posts daily. If the results are great, the free advertising can’t be beat. But if someone has taken to social media to criticize a haircut you provided (whether to man or beast), the hit to your reputation can be painful – and fast.
In that kind of atmosphere, you need every break you can get. Staying competitive and maximizing your revenue may mean doing a few things differently to manage your money inflow and outgo.
Upgrade Your Digital Capabilities
Whether you’re a single entrepreneur or run a small business, the personal services industry has gone digital via search, mobile, social, and booking and payment systems. Is your online presence ready?
Improve Your Cash Flow
Any company can end up in a financial bind when the time between delivery of services and payment is too long. In a particularly competitive industry such as personal services, cash flow management can just add to the pain. What can help you smooth out the highs and lows and run your business more efficiently? Accessing the money you’ve earned as quickly as possible so you have it in hand when you need it.
To speed up receipt of funds from credit and debit card transactions, look into same-day funding solutions. Same-day funding allows you to tap cash flows within minutes, seven days a week, by sending it directly to the debit card account of your choice. Near-immediate funding of payment card transactions can help you settle invoices and buy supplies when you need to. You might still worry about what the neighbors are saying about you on Facebook, but at least cash flow won’t be a problem!
Pay Employees Instantly
In a competitive industry, competition for employees can be fierce, too. You need to keep your team of service providers busy and happy. Better digital capabilities can help people find your business, meaning that your employees or contractors are productive and earning. Being able to pay them more frequently than the typical one- or two-week pay cycles also can help them stay afloat – particularly during tough economic times such as these.
With the right payment solution, you can get earned wages and tips to employees in real time, using their existing cards or bank accounts. Employees can choose how frequently they want to be paid – even daily if they like. And your business wins, too, because such a solution eliminates the need to print and mail paychecks, easing administration for you.
Small business owners typically wear a number of hats. A payment process that helps you keep valuable employees means you can put on your hiring manager hat less often.
Technology Offers an Advantage
We recently asked 500 small business leaders about the state of their business and investment in technology. The difference between smaller and larger businesses is notable. For example, only 28% of businesses with less than 50 employees spend more than $10,000 per year on financial management software. Not surprisingly, 72% of the larger businesses in the survey spend more than that amount.
Switching to digital for important financial functions is slow among small businesses, but it offers an advantage to those who do invest in technology. And today, more and more of those advanced financial solutions are accessible and affordable to small-to-mid size businesses. If you want your business to grow, better e-commerce, funding, and payroll options can help you compete for both customers and employees, whether you’re starting from scratch or bringing an existing business back to life.
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