Challenges running a service-based business.

In May 2015, I finally took the first step and founded division5.

Picture this: A 23-year-old with no connections, no money, no references, and no experience.

How hard could it be?

That’s exactly what I thought. How hard can it be…

Boy, I had no clue.

I wanted to build a game development company, but soon after starting, we found ourselves without money. The only way to keep the business going was to provide software development services.

I guess this was the first big lesson in my entrepreneurial journey: The market doesn’t care about what you want to do

Over the years, I’ve faced my fair share of challenges running a service-based business. Here are a few:

Finding Customers

In business, the most important thing is finding customers you can serve.

Without customers, there is no business.

In a service-based business, your service depends on three things:

• Quality
• Delivery speed
• Price

If you have references and referrals, people can judge quality and speed from those. Good references allow you to charge a higher price.

I had none.

People had to trust me based on how I presented myself—and on price. So, I aggressively offered low prices to acquire new customers.

It worked!

Soon, we had our first projects, and I had to hire my first employees.

Then came the real test: delivering.

Promise and Deliver the Best Service You Can

In the rush to close a deal, I sometimes promised the world.

I’m sure everyone running a service-based business has, at least once, promised more than they could deliver, or taken on more than they could handle.

The key isn’t to promise the best service possible—it’s to promise the best service you can actually provide and then deliver just that.

This was a hard lesson for me.

You need to be honest with yourself about what you can deliver, and then be honest with your customers.

Over time, I’ve learned that beyond expertise, three ingredients make up great service:

• Communication
• Transparency
• Reliability

If you combine these with your expertise, you’ll deliver great service, and your customers will keep coming back.

But unless you’re a solopreneur, you don’t provide services alone.

You also have a team working with you—and that’s where things get tricky.

Hire Great People, Build a Great Culture

I wanted to build a business that delivered high-quality services. But in the beginning, our service was far from high-quality.

It was average at best.

As we took on more customers and division5 grew, I realized that if I wanted to provide great service, I needed to hire great people and build a culture focused on the quality we aimed to provide.

In the end, every service-based business needs three things:

• Strong leadership
• Great people
• Great culture

You need strong leadership to set the values and vision, great people to live those values, and a culture that promotes them.

At one point, we doubled our headcount in two months. Our processes weren’t ready for that. Our culture wasn’t ready for that.

The result? Our service suffered—until we had the hard conversations and made changes.

Future Challenges

Every stage of business brings new challenges. As division5 grows, I know new challenges will arise. But after nearly a decade facing challenges running a service-based business, I’m more than ready to take them on.

Each challenge is a new opportunity to improve your business.

Don’t fear them—embrace them, find solutions, and learn the lessons.

They’ll definitely serve you in the future.