Are you running a product or service-based business?

How do you know and why does it matter?

Every business sells something to its customers. What you’re offering to the world gives us a clue as to what kind of a business you’ve got.

Are you selling products, services, or both?

In this resource, our Training Manager Tracey uses some examples to help you understand which category you fall into.

We'll steer you towards some extra knowledge and skills that will come in handy when you're setting up and making fundamental decisions about your business.

I’m selling one or more products

You’ll need to highlight the features that differentiate your product from others on the market, and provide enough detail so that customers know exactly what they’re getting.

Basic product descriptions include things like:

• size

• shape

• colour 

• materials or ingredients

• wipeable, washable or (heaven-forbid) dry-clean only?!

Examples of product-based businesses: Cafe/restaurant/food truck, clothing, toiletries, candles, gift wrapping…

1.Do you have a wide enough range of products?

You can't be all things to all people, but there might be a fairly simple way to significantly increase your customer base. Taking our cafe example: could you add vegan cakes, gluten-free flapjacks, and cookies safe for nut allergy sufferers?

2.How could you expand your product range further in the future?

In a year’s time, if your lovely new business has exceeded all your hopes and dreams, how might you branch out to achieve further growth? If you've already benefited from a Start Up Loan, have a look at Second Loans which are designed to help with the continued growth of your business (not to rescue your business).

If your business is struggling, could offering a more diverse range of products help you attract more customers?

In the clothing example, one idea is to allow buyers to customise their items. You might want to team up with a printing business to allow customers to add their names or initials to T-shirts. Perhaps they could choose from a few different fonts, or even upload their own designs.

3.Watch out for stock-related stress!

When you’re starting out, it can be really tricky to satisfy demand whilst avoiding waste or costly surplus. 

Market research is critical, so to learn how to go about it, explore the Business Fundamentals course.

I’m selling one or more services

They need to know you and like you enough to use your service (ideally more than once) and recommend you to people in their network.

Examples of service-based businesses include: mobile hairdressers, massage therapists, dog walkers, mechanics and car valeters.

1.Tools of your trade 

Whilst you may not be selling them directly, the products you use to deliver your service may affect your relationship with your customers. 

Let's consider the example of a massage therapist: a client may ask about the aromatherapy oils you use, so prepared to answer questions like:

• "Where can I buy some for myself?"

• "Is it suitable for sensitive skin?"

• "Is it produced by a cruelty-free manufacturer?"

2.Price it right 

Pricing your services can depend on your level of experience and qualifications. Customers may be willing to pay higher prices for someone with more expertise. Asking yourself these questions might help:

• Have I done enough competitor research? 

• What certificates or accreditations other people selling similar services have got? 

• How many years of experience do I need before I can start charging more?

3.Beware bad reviews!

Urgh. We’re shuddering at the thought. 

If your brand is built around a service you personally deliver, one negative review can turn new customers away and make previously loyal clients think twice about coming back.

Communicating with customers openly about their experience means you can rebuild trust and try to fix things before they walk away.

Interested in "Social Proof"? Have a read of this resource from Smarta on what it is and how to get it.