Avoiding Service Business Burnout (Top 5 Leverage Points)

05/21/2015 10:46 am ET | Updated May 21, 2016

Over the years my company, Maui Mastermind, has coached thousands of service businesses, helping them to overcome the typical obstacles that keep so many of these labor intensive companies small.

This is such a common challenge that we even have a name for it. We call it the "Self-Employment Trap."

This is where the owner of the business is so consumed by his or her day-to-day management of the business that they don't have the time or space to step back and focus on building a service business as a business. In essence they have built a self-employed job, not a business.

Is it any wonder that so many of these service business owners end up 5, 10, 20 years later totally burned out -- hating the very business they once loved. They feel trapped. The business generates the income they need to support their family and their lifestyle. But because of how they have gone about building it, they can never really leave their business.

Whether you're working business-to-business or business-to-consumer, service business owners have one of the highest incidents in getting caught in the Self Employment Trap of any category of business owner.

Why? Because of the high expectations of your clients combined with the difficulties in finding and managing your workforce to deliver up to your high standards.

This is a recipe for you the business owner forced into a role of catching many last minute mistakes or "fires" that you have to rush in and fix -- often at a high price to your family and personal life.

Take the example of Mark and Diana Huha who own and run a service business located in San Diego for close to 20 years. Their company serves large home owner associations, taking on the maintenance of all the common areas for these subdivisions or complexes.

When I first met Mark it was common for him to work 70 hour weeks, overseeing the direct client work by day, and doing the billing and admin work at night and on the weekends.

Here's how Mark put it: "We used to love this business, but just feel burned out now. It feels like we've built a job for ourselves. And what's worse, it's a job where we have all the overhead and stress and responsibility too!"

The real challenge that Mark and Diana faced wasn't that their business wasn't a good one -- it had supported them and their family comfortably for years -- it was just that they had maxed out what they knew about how to build a service business.

Mark and Diana knew how to run the day-to-day operations of their business, but they didn't know how to grow and develop it as a business. No one had ever taught them how to do that.

I'll share the "after" picture of what Mark and Diana were able to do in just a moment, but first, here is a concise summary of the top five leverage points to grow your service business and break out of the Self Employment Trap.

Leverage Point #1: Develop a better SYSTEM to hire and manage your team and workflow.

It's not enough to be able to find good people one-off. People's lives and motivations are complicated, and your business needs the stability of a solid system in place to find, hire, orient, and manage your team.

Remember, when building a service business you'll be hiring and managing staff forever -- it is a core part of your service business -- and as such you need to make it a real strength of your company. And this means systematizing your knowledge of exactly how to do it.

Further, you need to systematize the work itself so that your team gets better results with less time and effort.

We've discovered with our service business coaching clients, that when we help them to implement systems and sound business controls, their team enjoys more success, retention increases, and the cost of replacing any one team member drops dramatically.

Leverage Point #2: Creating growth through better and more consistent lead generation.

Too many service business owners improvise their lead generation and do it haphazardly. When they see a lack of sales they scramble to generate fresh leads. Then they get caught up in managing the business they bring in. Because they can't count on a consistent lead flow it becomes almost impossible for them to effectively manage their cash flow and growth.

If you are truly serious about building a service business you need a reliable baseline system for consistently generating a steady stream of qualified leads into your business.

Leverage Point #3: Creating growth through a more effective, more reliable, and more replicatable sales process (Lead Conversion)!

Let me ask you a tough question:

Does your business have a systematized and proven lead conversion process that reliably helps your business convert prospects (leads) into paying customers and clients?

And if you answered yes to the above (a real rarity for service business owners in our experience), is that system designed so that other people on your team can and DO sell as well as or better than YOU the owner?

Again, as noted above, the real goal of all this is predictable sales volume.

One of the biggest pain points we hear from new clients is that their business is either feast or famine. Of course it is for their service business. They scramble to find business until they are full. Then they shift their energies over to doing the client work and meeting the demand of all this new business. Then they finish up a lot of this business and realize that they don't have any new business coming in so they scramble again to find more client work. And on and on this cycle goes.

It is incredibly difficult and risky to scale your service business staff when you can't count on a steady flow of business.

Variability is the bane of the growing service business. And you must find a way to systematically bring in a consistent and growing stream of new and repeat business. This is one of the most important secrets to building a service business.

Leverage Point #4: Redesign and systematize your work flow to increase your business's efficiency and quality and hence increase your margins and protect your cash flow!

In most cases, your number one expense of your service business is staff. Have you strategically designed your core business processes to be the most efficient, high quality output that you can?

Have you worked to cookie cutter or template functions in this workflow so a less experienced team member (who is also less expensive) can follow your system to produce a consistently solid result?

Have you optimized this process to be faster, better, cheaper, and more reliable?

Often this can include simple ways to leverage technology, stronger better designed tools, and intelligent business controls to help you staff get more done with less time, effort, and cost. This brings with it huge increases to your company's capacity and operating profit margins.

Leverage Point #5: Managing your cash flow to be able to afford your growth.

It's time to share a hard truth -- from our work with thousands of service business owners one thing has become abundantly clear -- most service businesses do NOT have a well-run financial pillar of their company.

Their collections are haphazard and slow; their billing systems fail to record and bill for a percentage of their work; their reporting is too little, too late to do much strategic and managerial good; and their financial controls leave them vulnerable to theft and employee fraud.

The good news is that these are simple fixes that we can help you with. This includes:

  • Implementing a clear collections system with solid tracking;
  • Creating billing controls that have at least two redundancies to ensure that all billable work has in fact been billed for; instituting a regular weekly, monthly and quarterly routine of managerial and strategic level reviews of the numbers;
  • Implementing sound financial controls to make it 100 times less tempting for fraud to take place.
  • Implementing systems to better manage cash flow and control expenses.

The net result of these efforts is that you will finally have a sound financial base from which to safely and successfully scale your service company.

You need cash to grow. And most service businesses are stuck settling for less than they can produce simply because they are cash starved -- with poor financial systems the most common cause of this lack of accessible cash to fund growth.

And what about Mark and Diana you ask? What happened in their service business when they followed this recipe?

That first year they grew their service business from $775,000 a year in sales to approximately $1.1 million a year. That was over 40 percent growth in just 12 months. Considering that prior to working together they averaged just over 4 percent growth per year you can see the difference their new approach had on their company. Plus their net profits went up 104 percent.

But for them the best part was that Mark was able to reduce his working hours from 70 hours a week down to under 40 hours a week and get his life back.

Now it's your turn to get to work growing.

For more ideas on growing your business, including a free tool kit with 21 in-depth video trainings to help you scale your business and get your life back, click here.