KickStart: BEFORE you diversify into a new service STOP🛑 and ponder on Steve’s ‘8 Introspective Questions’!
Outline
Introduction – Measure Twice, Cut Once
Thinking about adding complimentary services? Diversifying residential services can seem like a surefire path to growth, but it’s not always as simple as it sounds. Before you jump into a new service area, take a moment to consider these key questions. This article will help you determine if a new service truly aligns with your existing business and has the potential to be a profitable and sustainable addition to your offerings.
What Does Diversification of Services Mean?
di·ver·si·fy: “enlarge or vary the range of services or products of a business.”
Your core services are your identity. Your diversified services are your range.
Examples
Here are a few examples for three sample Residential Contractor Industries. Your industry undoubtedly has diversifying residential services that you can consider offering as well.
Complimentary Plumbing Services
- Water Treatment: Offering services like water softener installation, whole-house filtration systems, and reverse osmosis systems.
- Drain Cleaning & Jetting: Expanding beyond basic snaking to include hydro-jetting for severe clogs and sewer line cleaning.
- Emergency Leak Detection & Repair: Specializing in locating hidden leaks (e.g., slab leaks) using advanced techniques and offering 24/7 emergency services.
- Bathroom Remodeling: Partnering with a contractor or offering limited bathroom remodeling services, focusing on plumbing aspects like fixture installation, shower/tub replacements, and accessibility upgrades.
Complimentary HVAC Services
- Indoor Air Quality (IAQ) Services: Offering services like duct cleaning, air purification systems (HEPA filters, UV lights), and whole-house humidifiers/dehumidifiers.
- Geothermal Heating & Cooling: Entering the growing market of environmentally friendly geothermal systems.
- Solar Panel Installation: Partnering with a solar company or offering basic solar panel installation for residential properties.
- Home Energy Audits: Conducting comprehensive energy audits to identify areas for improvement in energy efficiency and recommending solutions.
Pest Control
- Wildlife Removal: Expanding services to include the removal of nuisance animals such as squirrels, raccoons, bats, and birds.
- Termite Inspections & Treatments: Offering specialized termite inspections and treatments, including pre-construction treatments and termite baiting systems.
- Bed Bug Extermination: Providing specialized bed bug treatments, including heat treatments and canine inspections.
- Lawn Care Services: Offering basic lawn care services such as fertilization, weed control, and pest control for lawns and gardens.
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Diversified Residential Services Are NOT All Good Fits
Hmmmm… does diversifying residential services sound good? Maybe. As with so many undecided business questions, “It all depends.” Above all else one not-so-simple question…
Will this diversification be ‘synergistic’?
I’m all about word definitions today so let’s examine: syn·er·gism: “the total effect is greater than the sum of the individual parts”. And this should be your goal with adding any new service to your residential services company!
WARNING: I find most Residential Services company’s diversifications are motivated by the owner’s a) ‘entrepreneurial boredom’ and/or b) falling prey to the ‘grass is greener’ syndrome. Or as my business mentor told me 40 years ago…
“The classic definition for most small business diversifications? ‘Let’s search for something new to fail at’!”)
I’ll happily bestow my blessing on your future diversification(s) IF you can answer with a resounding, “YES, Steve!” on all eight of these ‘synergistic questions’:
8 Questions Before Diversifying Residential Services
1. Will it distract me from my ‘core business’?🤔 As the song goes, “Dance with the one who brung you!” Neglect your main business (and existing clients) playing with this new ‘shiny, bright toy’ at your peril!
2. Can I offer this new service while onsite doing other work? I call this ‘upsell’ idea Additional Service Options (ASO’s). Trust me, ASO’s can be a HUGE way to add profits from your existing clientele.
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3. Can my existing employees perform this new service? Or will you need to add highly skilled new workers? (This will usually make the new service a non-starter for me.) Also, what’s the learning curve? Are you going to increase your complaint ratio?
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4. Is it going to bring in ‘virtually obscene’ new profits? 💲💲💲 Or can you get a better ROI elsewhere? Including expanding the market/service area of your current services?
5. Can I piggyback on to my existing marketing? If so, this will really help you with a give a big 👍 up to question #4 above!
6. Might this new residential diversification service bring in a new ‘customer demographic’? If so, great! Who knows- this new service could eventually become ‘the tail that wags the dog’!
7. Will this diversification fit my image as a Home Services Provider? Adding another residential service that meets questions #1-#6? Maybe. ‘Diversifying’ by opening a taco stand?🙄 Much as I love tacos I’ll give you a huge 👎 on this one! And most importantly…
8. Am I prepared to invest the required start up time, energy and effort? Why this question? Because too many of my student’s shops are cluttered with ‘expensive anchors’ gathering dust. Yep, all equipment that was impulsively bought with much excitement for diversifying residential services. What happened? The dreaded Entrepreneurial Boredom struck once again! Don’t be this guy!😣
Did you trudge through all eight of these tough ‘introspective questions’ with me?😲 If so, CONGRATULATIONS! (We ARE talking about the future financial future of your family here!)
Summary – Take Your Time, Do It Right!
Diversifying your residential services business can be a smart move, but it’s crucial to do it right. By carefully considering your options and asking yourself the right questions, you can identify opportunities that truly align with your business goals and enhance your value proposition to customers. Remember, successful diversification isn’t just about adding new services; it’s about strategically expanding your offerings to create a more robust and sustainable business for the long term. Good luck with your diversification journey!