If change is the only constant in life, then the business services industry is proof. That’s because this industry that was originally founded on paper copies, faxes, and delivery of snail mail and oversized cardboard boxes is now adapting to the changing times of our technological world by implementing ecommerce, mobile access and digital solutions. The shift has required some creative thinking and wasn’t an overnight success, according to the numbers: 2010 to 2015 industry revenue decreased slightly by 1.2 percent to $8.7 billion as business services attempted to keep up with all the changes. That said, when corporate revenue in the United States increases, so does the need for business services. Fortunately, demand is currently steadying due to an overall positive business environment, so there’s still plenty of life left in this industry for those looking to start or buy a business service center.
If you’re thinking about starting a print/copy/delivery business in your city or franchising one (such as The UPS Store), plan to tune up your tech skills and finesse your financing sooner rather than later. Here are three tips to help you succeed in this industry of change:
Step 1: Embrace New Technology
It’s your choice whether you view the technological changes to the industry as a threat or a challenge. If you prefer the latter, then you’re already off to a good start. In fact, many business services operators are moving – or have already moved – to digital for many of their operations. For example, Staples and FedEx Office allow you to upload your document digitally rather than take a hard copy to a brick-and-mortar location for printing or copying. Some businesses in this market are even adding apps and mobile experience into the mix, which is a smart move considering many consumers and workers do business via their mobile phones now.
In general, the key is to shift your business services towards conducting more transactions online and providing flexibility for people to access these services quickly and easily – and from wherever they are located. Additionally, your business should focus less on paper-based services such as printing and copying and look to service differentiators that make your shop unique. 24/7 mailbox services, for example, are experiencing an increase in demand, as is printing digital photography.
As if the technological challenge isn’t enough, competition is also fierce in this market. With Amazon now delivering some of its goods in its own delivery trucks, that competition just got more aggressive. There are also a large number of small businesses competing with each other, so delivering cutting-edge, technologically advanced options will help you stand out from the competition.
Step 2: Secure Financing for Your Business Service Center
Most franchises in this industry, including The UPS Store, require a one-time fee and a percentage of royalties each month to start one of their franchises ($29,950 initial fee and ongoing royalty fees of 5 percent, to be exact, for The UPS Store). Many franchise brands offer assistance with financing, but it’s always a good idea to be aware of all of your options so you can make an educated decision. For example, if you don’t have enough liquid funds, you could get a traditional small business loan through the Small Business Association, or if you don’t want to take on debt, you could use 401(k) business financing to finance your franchise without incurring tax penalties. You can even combine the two options if that makes the most sense for your financial situation.
Aside from the ability to use the franchise brand’s namesake and logo, your franchise fee also pays for marketing and advertising support to help you get up and running, as well as promote your franchise throughout the year. Business service centers are among low-cost franchises that have the potential to offer high return on investment.
Step 3: Steer Clear of Locations with Market Saturation
Location is everything when it comes to package delivery, copy services and mailbox rentals. Currently, the majority of business services in the U.S. are located in California and Texas, and many of them are local, independent shops on busy street corners. If you want to open a business service center, cosdier locations where the market saturation isn’t as high but where the demand is plentiful (i.e. cities where there are a lot of small businesses who could utilize your services but not a lot of business service centers to meet the demand).
Whether you choose to start a local copy and mail shop on Main Street or franchise a shipping giant such as UPS, you’ll need to have your finances in order, embrace new technology and prepare for a little healthy competition. If all of this sounds interesting to you, then the business services industry of today could work for you – just remember to make it work for your mobile-savvy customers of tomorrow.