Service Points

Selling a service offers the personal touch, puts a face on your company and requires hands-on work at every step. Dealing in quality products can be done with little or no face time. You can choose between the two for your startup, or pump up the bottom line with both.

When Beth Schoenfeldt created Ladies Who Launch, providing resources and networking for women to get into business, projects and friendships, she had limited startup funds and didn’t want to pile up debt.

So Schoenfeldt decided to offer a service rather than a product to avoid hefty upfront costs for manufacturing, inventory and product development. With a service-based business, “You can just hang up your shingle,” says the New-York-based entrepreneur.

Services have the added value of one-on-one attention, says Adam Adelman, co-founder of a product-based company called Juno Baby, and “it’s very difficult to personalize a product.”

But with a service, you’re limited by how much you can do yourself. A concert pianist can play only one piano at a time; a classical CD recording of that pianist can be played simultaneously hundreds of times around the world.

Get the point? A creative entrepreneur doesn’t have to choose between service or product. To use your talents to maximize the bottom line, try both.

Walk the Line

After their daughter was born, Adelman and his wife – celebrated composer Belinda Takahashi – created their namesake business, Juno Baby. Wanting to give little Juno an appreciation for music, they had their light bulb moment: If they, as new parents, were interested in sowing musical seeds early, other parents likely felt the same way.

Takahashi can compose only so many original scores. In a good year, she’d earn commissions for “a handful of pieces. The process is extremely time-consuming” and the funding is hard to come by, Adelman says. Big talent, little money.

But there’s no limit with Juno Baby. Takahashi composed scores for DVDs and CDs that sell online and in stores, and there’s a line of clothing and plush dolls to go with them. In 2006, sales are projected at 10,000 units. And now Takahashi is writing an advice blog for other parents.

Hands-down, a product can reach a far greater audience than a service, but both are better.

While Schoenfeldt started with a low-overhead service, Ladies Who Launch eventually will offer such products as whimsical office supplies and work-from-home clothes. Service begets product begets service.

What Goes Around Comes Around

Even with the best product, a successful business relies on great service, says Peter Shankman, CEO and founder of The Geek Factory, Inc., in New York, and author of Can We Do That?! Outrageous PR Stunts That Work – and Why Your Company Needs Them (Wiley, 2006, $19.95).

Shankman loves his American Express card, despite a high annual fee, because it offers a great concierge service. “It’s the service behind it that I’m paying for,” he says. Everything “comes down to service. There’s a dry cleaner I use, not because he’s the best dry cleaner in the world, but because he knows exactly how much starch I want in my shirt. That’s what you’re paying for.”

The Geek Factory is a service-oriented PR and marketing firm. Shankman also runs a product-based company, Airtroductions, which offers the ability to choose your seat-mate on a plane. But he insists it’s the service behind the product – a computer system that can deliver the chosen seat – that makes or breaks the business.

“The difference between service and product really comes down to time of response,” Shankman says. “A product turns into a service-based business – the service of making sure the product is accurate, the product is working and [customers are] getting what they’re paying for. Anything you do becomes a service-based business if you’re smart.

“We live in a society that expects crappy customer service. You order a Diet Coke and you half-expect them to give you a Coke. You’re not surprised that your dry cleaning isn’t done on Tuesday. The people who screw up figure they have a product and don’t need to provide a good level of back-end support.”

Whether you decide to offer a service, sell a product or both, don’t think too much. Just jump in. Says Schoenfeldt, “The key is to just start somewhere.”

Lynne Meredith Schreiber is a freelance writer for StartupNation.

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