373: The Sweaty Startup: How to Start a Local Service Business

Do you know how much cash flows through your hometown on a monthly basis?

In this episode we explore how to get some of that cash flowing toward you!

I’m joined by Nick Huber, co-founder of Storage Squad and host of The Sweaty Startup podcast.

Storage Squad, a student storage service, has grown to over $3M in sales since starting it as a little part-time project back in 2011.

I invited Nick on The Side Hustle Show to help walk us through his “sweaty startup” framework. That is, how you can start a low-risk, low-overhead, local, service-based business, set it up for success, and let that be the vehicle that drives you away from a lifetime of cubicle slavery.

Tune in to hear Nick’s thoughts on generating service business ideas you could start today, evaluating the market and competition, and scoring your first customers.

That’s why I think this is pretty exciting — it really doesn’t take many customers to begin to make a meaningful income here.

Where Should You Look for Side Hustle/Business Ideas?

Nick said there are business ideas all around us, and we don’t need to go online to find opportunities.

For example, after recently buying a home, he realized it was difficult to find contractors to help out.

He was looking for cleaners, people to power wash his driveway, and other maintenance tasks and it was difficult finding someone who could come out and price the work.

“I think a lot of brilliant, bright entrepreneurs are missing these business ideas that are right in our backyards, or our small towns and cities,” Nick told me.

More and more people are outsourcing tasks around their homes in this day and age. It’s also a lot less competitive than most online businesses since it’s geographically limited, and can’t be outsourced overseas for a lower rate.

The other point Nick raised was that most service businesses are “still operating like it’s 1985.” If you can come in with some modern tech knowledge, you’re going to have a competitive advantage from the get-go.

How to Come Up With Loads of Business Ideas

Nick recommends starting with 10 business ideas that you could offer right now with your current skill sets and tools you have available.

If you’re struggling for ideas, he has a list on SweatyStartup with 200 or so different services to spark some ideas. It’s the longtail of these services where you can find some of the best ideas, too.

For example, Nick wanted a steam shower in one of his bathrooms. He looked on Google and could only find one company in the state of Georgia. They were charging a $300 non-refundable deposit just to come out and quote the job — because they know they’re the only game in town.

As you’re making your list of 10 businesses, “get creative” Nick said. Think about how you can invest in a specialized piece of equipment or differentiate yourself from the crowd.

How to Get Experience or Skills in a New Field

The first way to pick up new skills is calling a company that does the work you’re interested in. More often than not, Nick says they will be willing to hire you for at least a few hours a week so you can train on the job.

You’ll never know unless you make some calls.

The second is using YouTube to learn the ropes. You can find just about anything thing explained in detail on YouTube.

(Reminds me of Matt Rowell’s knife sharpening side hustle!)

Questions to Ask When Evaluating a Service Business Idea

Nick provided me with three important questions anyone should ask themselves when they have a business idea they want to move forward with:

Is it a Business People Are Passionate About?

“I avoid things people are passionate about,” Nick said.

If your business idea is also a hobby for a lot of people, you’ll be competing with people willing to make unwise financial decisions.

This would include businesses like yoga teaching, bars and restaurants, health and fitness coaching, social media app development, and so on.

Is There a Rising Demand?

Nick explained that there is a rising demand for most home maintenance-related jobs, which is why this area piqued his interest.

For example, Nick said that 20 years ago only 5% of homeowners paid for someone to mow their laws. Today that number is 40%, and it’s expected to keep on increasing.

Do some research into whatever business idea you have and look for a positive trend upwards in demand.

Similarly, we started hiring a house cleaning service through Handy. They made it easy to do business with, and seem well-positioned to tap into growing demand.

What Does the Competition Look Like?

Analyzing the competition is a staple of starting a new business. Would you rather compete with giant companies like Amazon and Walmart, or local mom and pop outfits operating with a fax machine and finding customers through yellow page ads?

This is an important step in the process of validating a business idea. So, Nick took a deeper dive into how you can evaluate the competition in your niche.

How to Evaluate the Competition

With your list of 10 business ideas, it’s time to start analyzing your competition in detail.

Nick said he does this by typing each business into Google and opening up the first three companies that appear.

With a spreadsheet open to record all his findings, he looks at three core areas:

Lead Times/Speed

Nick explained that most companies have employees, systems, or processes problems, not customer problems. They struggle to answer customer requests quickly, and this gives someone able to solve this pain point an advantage.

He shared a real example he came across recently. Nick wanted to improve access to his basement by changing the sidewalk to his house.

So, he called up 10 local companies. Only two of those companies sent someone to his house to give him a quote, and one has actually quoted him for the job.

It was two weeks ago he made those calls.

Digital Marketing/Accessibility

You’ll find a lot of local businesses have no websites, digital marketing strategies, no real online processes, or ad campaigns.

Pricing

The landscape company that gave Nick a quote for the sidewalk job wanted $23,000. Nick calculated the materials to be about $1,500, and although there is obviously some labor involved, this company is clearly able to charge a premium due to the lack of competition.

You can do all this research over the phone by acting as a customer.

From a list of 10 businesses there is usually at least 3 left that look like there is a decent opportunity to enter the market and compete.

Is There Still Demand in the Low Skill/Low Barrier to Entry Businesses?

Nick said that people who think these businesses are a race to the bottom on price have the wrong mindset.

“You don’t need to get every single customer,” Nick told me.

You need to focus on what % of bids you need to convert into paying customers, and what type of customers you want.

(Pricing too low was a big mistake of mine in my house painting days!)

If you focus on customers that want professionalism and speed, price is not the deciding factor. There’s a lot of customers out there like that, Nick himself is one.

This gives you a slice of the market that the businesses racing to the bottom are not picking up.

You Have Your Final Ideas, What’s Next?

“Don’t overthink it, Nick said. “Jump in.”

The key is to find customers and get servicing them as quickly as possible.

Nick breezed through this next part, but basically he:

Buys a domain for his business
Sets up a basic site on WordPress
Registers his business with Google My Business
Sets up an email and a phone number
Prints a few thousand fliers and starts dropping them off in neighborhoods with homes and businesses in need of his services

He pays for Google G Suite, which for a few bucks a month gives you access to all of Google’s tools and applications, but this is optional.

How to Market a New Service Business

I threw the idea of starting a pressure washing business in my local area, following the advice Nick has shared so far. I asked him how he’d suggest market my new business.

“First of all, I’d go around and do some guerrilla cleaning advertisements,” Nick told me.

He shared an example where someone used a pressure washer to literally write their phone number in a dirty section of concrete near an intersection overpass to advertise their business.

It’s this kind of thing that gets a business noticed and finds those customers that aren’t clicking ads online. Nick has used a similar tactic himself when growing his storage business; he’d write on sidewalks in chalk where students — his target customers — would walk every day.

He also suggested handing out business cards to everyone I see, and developing relationships with real estate agents — perhaps even offering to clean their driveway for free.

Nick also said I should push for reviews on my Google My Business page, as this will supercharge your local SEO.

What’s Next?

Nick is going to continue producing his podcast, The Sweaty Startup.

He also has a Reddit group, which is growing at an incredible rate. He now has more than 20k members, most of which are service-based entrepreneurs. The community is always bouncing ideas around if you want to drop in and ask any questions.

Nick’s #1 tip for Side Hustle Nation

“Look up from your computer screen!”

Links and Resources from this Episode

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About Author

Nick Loper

See author's posts

373: The Sweaty Startup: How to Start a Local Service Business

Where Should You Look for Side Hustle/Business Ideas?

How to Come Up With Loads of Business Ideas

How to Get Experience or Skills in a New Field

Questions to Ask When Evaluating a Service Business Idea