How to Transition From a Sole Service Provider to a Small Business Owner

There are ways to understand when it's time to start your business and how to do it well.
By Hannelore Buckenmeyer
July 26, 2022

Many small business owners don’t start out that way. They start as people with skills to share and services to provide. When a skill is performed well and in demand, that’s when a service provider often jumps into the role of a small business owner—perhaps before they fully understand the implications the evolution can have.

Growth may happen quickly, and construction business entrepreneurs often face unique challenges with demand surges and supply limitations. This is especially true now as both labor and supply shortages affect how work is done, and when. So while a service may be in great demand, the business behind it has to be functioning efficiently and effectively in order to provide it.

The transition from a sole service provider to a small business owner may be swift, and there are ways to understand when it’s time and how to do it well.

Recognize growing pains

For sole service providers, hustling may feel like a natural state. From finding clients to performing the work to managing administrative duties, it’s common for home services entrepreneurs to take on everything by themselves—and work long hours doing so. Given that maintaining consistent business is a top challenge in the industry, this seems like a natural mindset to adopt. But there are two key differences between busy and overwhelmed that may signal the business is growing into something bigger than one person.

When a service provider is unable to finish work at the end of their workday (however it’s defined) and frequently cuts into personal time instead, growth is outpacing capabilities.

When a service provider has to turn down business—work they want or can positively impact the business long-term—capacity is restricting opportunity.

While developing from a team of one to enlisting any kind of help may not be right for every construction business owner, these types of growing pains are recognizable signs that the opportunity for more is there, whether or not that opportunity is taken.

Focus on the skill or the service

In the construction industry, one typically begins providing a service because they’re skilled at it (and hopefully like it, too). But skilled as they are, most construction professionals are not experts in things like administrative work, scheduling, and customer service—nor do they particularly enjoy doing them. It’s no surprise that these additional priorities become drains, with 42% of home services businesses saying efficient customer scheduling is a major challenge, for instance.

As a business begins to grow along with administrative tasks, it can impact a provider’s satisfaction with their job, the ability to grow their income and the ability to develop their skill set in ways that actually interest them. In other words, the pressures of business ownership affect personal and professional fulfillment.

Because demand is outpacing supply across construction-related industries, it’s harder to find skilled support. So if a person has that skill to offer, but is overworked and overwhelmed with other aspects of the business, it may be impossible to step in. This is why outsourcing can have an important effect on growing from a sole service provider to a small business.

Give up some control

Perhaps the hardest part of the transition is evaluating what a business owner doesn’t have to do and what someone else can do. When a person builds their business, especially based on their own very personal set of skills, letting others in can feel like an insurmountable challenge. But sometimes, giving up some control is the only way to maintain the integrity of the business.

It’s important to point out that with the labor shortage, on top of the amount of work and ongoing effort it takes to hire, train and manage an employee, bringing on someone full-time is not always achievable. Instead, it’s about focusing on the specific skill the business owner provides and then making more room for that by outsourcing all the other things that don’t require this type of skilled labor. For example:

  • Accounting and invoicing
  • Taxes and bookkeeping
  • Call handling and customer service
  • Legal services
  • Change orders

There are many areas in which a business can get flexible support without bringing someone on to full-time payroll. Outsourcing can help meet business needs at scale while providing high-quality assistance that allows the service provider to focus attention on what they're best at.

Consider the risks of not outsourcing

Keep in mind that growing from a sole service provider to a small business owner is not the right move for everyone. But when it is, and that evolution is put on pause out of fear—like thinking it’ll be cheaper to do everything solo—there are associated risks.

Referrals may drop if customers feel those growing pains. As 75% of home services entrepreneurs say that word of mouth remains one of their most important sources of new clients, those referrals are critical. If a provider is overwhelmed, that can often lead to less-than-stellar service, or even worse, costly mistakes. These things can damage a business’s reputation with existing and potential customers long-term. When a business underperforms for a customer, it jeopardizes its word of mouth and future growth.

Today especially, among so many supply chain restraints, construction businesses have no choice but to be more flexible. With the supply chain in control, work has to be planned to accommodate delays. If materials come in, providers need to be able to jump right back in to complete projects to avoid causing further delays. If time and attention are wrapped up in back office-type support, this flexibility may not be possible.

A business owner needs to be thoughtful about where they can get support in a less-specialized manner to ultimately protect their ability to adapt to their market.

Maturing a business can feel intimidating, peppered with risks and consequences. Finding the confidence to take that next step is about empowerment, which is found through reprioritization. Reaching the point of growth is an opportunity, and it’s up to the entrepreneur to decide where to take it. With that, many will regain joy in their work and have the time and energy to enjoy for other parts of life, too.

by Hannelore Buckenmeyer

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