The Sweaty Startup: How to Start a Local Service Business (Greatest Hits)

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1:16Do you know how much cash flows through your hometown on a monthly basis? Here's a guide to diverting some of that money your way. What's up? What's up? Nick Loper here. Welcome to the Side Hustle Show because opportunity is missed by most people because it's dressed in overalls and looks like work. Hat tip to Thomas Edison for that one. It's a good quote, though, and an appropriate one for today's show. I'm excited to welcome Nick Huber to the program. Nick, what's up, man? Nick, thanks for having me. You bet. I'm a big fan of everything you do, so I'm glad to be here. Well, thank you for tuning in.

1:51Nick is the co-founder of Storage Squad, which answers the question students have of, what do I do with my stuff over the summer? Well, you give it to Storage Squad. They pick it up, they store it, they deliver it back to you when you need it. Again, it's a company that's grown to over$3 million in sales since starting as a little part-time project back in 2011. Nick is also the host of the Sweaty Startup podcast at sweatystartup.com. I think that's my favorite podcast name that I've come across lately. And I invited him here to help us walk through his sweaty startup idea framework. That is, how can you start a low risk, low overhead, local service-based business?

2:35How can you set it up for success? And how can you let that be the vehicle that drives you away from a lifetime of cubicle slavery? Stick around in this one to hear Nick's thoughts on generating service business ideas. is you can start today how to go about evaluating the market and competition and scoring your first customers. That's why I think this is pretty exciting. It doesn't take many customers to begin to make a meaningful income here. All right, Nick, let's get into this and generate some service business ideas. This is the biggest pain point that I hear from Side Hustle Show listeners over and over again.

3:08I just need an idea. Well, if I have that magical idea, I know I can go get started. And so you're advocating for a different type of idea, something that has already been done, it's already been proven, and it just needs somebody to go out there and execute on it better. So let's dive into this stuff. Where do you suggest people start when they're looking for that first side hustle idea, first business idea? Yeah, yeah, absolutely. So the reason why I'm so excited about this is I bought a house about a year and a half ago, and I didn't realize how hard it was to find people who are willing to service your home, whether it's cleaning the carpet, washing the windows, power washing the driveways, the hundreds of businesses that people are outsourcing and outsourcing more and more.

3:50I mean, I think about my grandfather and my dad and how they were good with their hands and they knew how to do everything and they fixed their own stuff and they did their own things in their home. I don't know about you, Nick, but I am not that way. I think a lot of the next generation of homeowners are not that way. So what they're doing is they're reclaiming their time. They want to spend more time with family. They want to spend less time tinkering in the garage. So they are literally outsourcing everything that has to do with home ownership. Same with businesses. Businesses are focusing on what they do best, outsourcing a lot of other things.

4:18So I think a lot of brilliant, bright entrepreneurs are kind of missing these business ideas that are right in our backyards or in our small towns or in our big cities that we can get out and touch and feel and do ourselves. So that's kind of the trend that I'm seen out there. No, absolutely. I can see that trend just as myself personally compared with generations past and my father and what he was able to do. That is an interesting idea. And so you're saying, oh, plus combine that with more people getting higher level education instead of going to the trades, there's a shortage of this type of skilled worker.

4:53And so as a listener of the show, you should come in and fill that gap or you could come in and fill that gap as a potential entrepreneurial venture? Yeah, a big part of this is competition. I mean, when I'm looking at e-commerce or freelancing or Amazon FBA and these businesses that are amazing because they're location independent, you can work online, you can work from anywhere, there's not a whole lot of barriers to entry. I look at the amount of people flooding those markets and the people that are not necessarily geographically limited, right? You're competing with people from all over the world and some other areas, you know, Pakistan, places where this kind of work is taught in schools a A lot of people are more affordable dollar per hour to do this kind of work.

5:31So I look at the competition. When I look at the competition in these home service businesses, I don't think a lot of these people consider themselves entrepreneurial. I don't think a lot of them are very innovative. A lot of them are running their businesses like it's 1985 with a fax machine, not a whole lot of email even. They're doing business like it's 1985. And I think a smart young entrepreneur with today's technology can really carve out a very interesting piece of the pie on these businesses that are already in our cities, they're already operating, they're already profitable. And more importantly, as we'll talk about here in a second, they're easy to study and it's easy to find out if you can carve out a piece of the pie.

6:06Yeah. This was something, well, we were shopping for a home cleaning service as an example of something that we've begun to outsource ourselves. And it was just like you're describing, like every website, if they even had a website was from 20 years ago, it was all this like contact us for a quote and we'll get back to you in five business days and the service we ended up going with is called handy and it was just like an app i didn't have to talk to anybody it was like 40 bucks off your first cleaning or something it was like this price seems reasonable i don't know like nobody else i didn't want to bother calling them for a quote so i don't know if they're overcharging me i'm sure they've got some technological like overhead and development this app so there probably is some margin in there but all they are is a matchmaker They hook me up with like local cleaners who I otherwise wouldn't have been in touch with.

6:52And they just kind of play this middleman. So the developers of Handy aren't the ones coming out scrubbing the toilet. Like they're just kind of playing a matchmaker in a ways similar to what Chris Straub was doing with ThinkMades on the podcast maybe a year and a half ago. So what kind of questions aside from maybe do I have a tech advantage or do I have a customer support advantage? And that was Chris's whole thing was like, I went on Yelp. Nobody was complaining about the cleaning. They're complaining that I couldn't get a hold of anybody. I took a while to get a quote. I didn't know when the people were coming.

7:22But what other questions can people ask if they're evaluating different service business ideas? Yeah, so number one for me is I avoid things that people are passionate about. That's the number one question. Is anybody passionate about doing this? Because if there's a lot of people who are passionate about it, then there's probably a lot of high, there's a high level of participation and the odds of success are probably a little bit lower. This would be like starting teaching yoga or something. Exactly, right. The things that are fun, the things that people are kind of hobby-oriented, restaurants, brewing beer, things that are fun.

7:53And those are the things that if other people are kind of having fun doing that, they're maybe not going to make wise business decisions. They're going to undervalue their time. Those aren't the kind of people that I want to compete with if I'm starting a business. Which goes counter to most advice of like, well, pick something you're passionate about. I know, I know. I'm passionate about building something. I'm passionate about entrepreneurship. And I'm passionate about taking steps forward every single day. And I want to do what I want to do in my free time, right? away from work. And the goal here for me is have a five-year plan so that I don't have to work a whole lot and I can do what I'm passionate about and not be stressed out about earning money doing those things.

8:24All right. What else? So I look at a rising demand. Like I said, people are outsourcing more. The pie is getting bigger every single day. 20 years ago, 5 % of people paid someone to come mow their lawn. And today, 40 % of people do. I'm guessing 10 years from now, that number will be well over 50%. So there's more and more and more customers coming on the market every single day that are using these local services. And the big one is competition. We already touched on it a little bit, but if you're looking at who you're competing with and what kind of models they're using, it's pretty easy to choose a local service business based on how they do business than try to compete with the tech entrepreneurs, the online entrepreneurs who are not necessarily location independent and really, really good at what they do.

9:06Okay, that's interesting. So not necessarily going out to conquest somebody else's customer, not necessarily trying to steal market share, but just, hey, there's a rising tide of people outsourcing their lawn mowing, their home cleaning. We talked to a woman a few weeks ago who was doing pet waste removal. And what else is cool about that is the house is going to keep getting dirty. The grass is going to keep growing. The dog is going to keep pooping in the backyard, right? Like you're setting yourself up for a recurring stream of revenue as long as you can keep doing this work or contracting people to do this work with you.

9:40Absolutely. So in my mind, every business has either an employee problem or a customer problem. Most businesses, they have customer problems, right? They can't find enough customers to get the revenue, to build the business, to be profitable. A lot of these industries, and we'll look at how to actually analyze and figure out where the problem is, they don't necessarily have customer problems. There's enough customers. They have employee problems. And I learned this when I bought my house and I needed to get some things done. I would call in a steam cleaner for the house when we moved in. I wanted somebody to build out my closet.

10:05I was looking for somebody to put shelves in my garage. I was looking for somebody to put pest control around my house, mow my lawn, and I would call 10 companies and seven would answer the phone. Three were not taking new clients. The other four took a really long time to come out and even look at my home. It wasn't like, okay, I'm eager to get this business. I need this business. They all have employee problems. They don't have customer problems, if that makes sense. So they have trouble delivering the service and meeting the demand based on how many employees or how their systems are designed.

10:35They don't necessarily have a marketing employee problem because the demand in some of these areas is so strong. And if you are mystery shopping these companies, you're calling these companies up, I imagine if they're saying, hey, it's going to be two to four weeks before we can get out to you. That's a good sign in your case, because you're like, OK, maybe there's clearly more demand than there is supply here. Absolutely. Lead time is number one. So when I'm analyzing opportunities, I like to make a list of 10 businesses that I could potentially offer with my current skill set, with what I already equipment that I have, you know, it's 10 different businesses that I could start in a low risk way.

11:09And the first thing that I'm looking at when I start to poke around is lead time. How long is it going to take you to come out and give me a quote, or build my closet or do whatever it is that I need to have done? How long is that going to take? And you'll be really surprised when you get on the phone with some of these companies. And they're like, Oh, yeah, we're booked out four weeks, basically, all the time. And when we're really busy in May, June, July, it's more like six or seven weeks, six or seven weeks for us to come out and do this. And that is not a joke. I just call around a bunch of companies to put a little sidewalk down to my lower entrance to my basement because I want to put it on Airbnb.

11:42And I called about 10 companies, most of them answered the phone, most of them were professional, but only two have come out and actually talked to me. And I made all those calls about three weeks ago, and only one has already gotten me a quote. So 10 % of the companies that I called have actually come out and delivered a quote, and it's been over two weeks since I made those calls. More with Nick in just a moment, including more ways to come up with service business ideas and how to evaluate which ones to actually move forward with right after this. One of the tools I've personally seen make a huge difference for business owners is Quo, formerly OpenPhone.

12:15It's the same great business phone system you've heard me talk about before, just with a new name. When you're running a business, you know that every missed call is a missed opportunity. So Quo, formerly OpenPhone, this is the number one business phone system that streamlines your customer communications. It works through an app on your phone or your computer. So no more using your personal number as your business line. No more carrying two phones around. With Quo, your team can share one phone number and collaborate on customer calls and texts just like a shared inbox. So anybody can jump in to keep response times fast.

12:45And this is where it gets super cool. You can set up Quo's built-in AI agent in just a few minutes to handle calls after hours, answer customer questions, and capture leads on autopilot. I want to invite you to get started for free. Plus, Side Hustle show listeners get 20 % off your first six months at Quo.com slash Side Hustle. That's Quo.com slash Side Hustle. Look at them getting that three-letter domain, quo.com slash side hustle. And if you've got existing numbers with another service, Quo will port them over at no extra charge. Quo, no missed calls, no missed customers. There are less than 100 days left in 2025, which means less than 100 days left to hit those goals that you said or to refocus your energy on what really matters.

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14:04There's no need to wait any longer. Speed up your hiring right now with Indeed. Side Hustle Show listeners get a$75 sponsored job credit to get your jobs more visibility at Indeed.com slash Side Hustle Show. Just go to Indeed.com slash Side Hustle Show right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash Side Hustle Show. Terms and conditions apply. Hiring. Indeed is all you need. interesting so you're kind of starting from the point of like what would i need done in my own house any other kind of starting points to seed this initial list building exercise yeah i mean i have a list on my website sweaty startup of literally about 200 different services it's the long tail of these service businesses you don't necessarily have to limit yourself to house painting or pest control you can get very very very specific like if you learn how to build One random example is a steam shower.

15:01I was interested in converting a steam shower in one of my bathrooms because I think it's really a healthy thing to do. I was kind of into it. So I looked on Google and there is one company in the state of Georgia that does this. One company that installs steam showers. They wanted a$300 non-refundable deposit to even come out and look at that job. Because they can. They can't. Yeah. They just can't solve the employee problem to service more customers. They have constraints in those regards. So you can get very creative. Like think of anything that you could possibly need done. Like building out custom closets is one that I love that you can order kits online and with a screwdriver and a laser level, you can install really, really good closets in people's houses.

15:38You got deck staining, window cleaning, gutter cleaning, mobile bartending. You can think about just your network and what kind of lends itself to what you could possibly do. I like to make a list of 10 businesses and get more specialized as you go, right? Like make five, make a list of five businesses that are really low cost, really low skilled, really low barriers to entry. And then think about, okay, if I did a little bit of investing, and most times it's just time. I love how you say, Nick, your life is what you do from five to nine is the important time, right? What can you spend instead of watching TV?

16:05The average American watches five hours a day of TV. What can you do to kind of get into something that has a little bit more barriers to entry, maybe a little bit of equipment, maybe some skills that you need to learn? I like making a list of 10 businesses and putting them on a piece of paper. That's where I start. Yeah, there's a listener of the show who has a parking lot striping business, who he's sent me some details on this. And it's like, yeah, there's a little bit of equipment. There's a little bit of skill. And I guess probably practice in learning how to do this the right way. So you don't mess up the parking lot, but it's so niche and so specialized that like, hey, anytime there's a new parking lot going in in town, he's the guy that gets the call.

16:38I have a friend actually who does deep cleaning of restaurants. So he will go in at night with equipment. It's a very sweaty job. Goes in at night in about five hours, he will deep clean and degrease a commercial kitchen and restaurant floor. and he will net profit at the end of the night about a thousand dollars in four hours time wow he's the only one in town who does it he has all the contracts and he was just a guy with the cargo van drove around not necessarily that skilled he was just willing to do this one little niche thing now within about a three city radius he's the first guy on google because there's only about two or three companies that do it has more business than he could ever hope for he's raised his prices every year by 30 he just keeps having a full schedule it's pretty awesome yeah so we talked about a kind of like low skill, low barrier to entry stuff, installing custom closets, installing steam showers.

17:23That stuff sounds a little bit more stressful to me as like, okay, well, I've never done that before. I've definitely never gotten paid to do that before. So where do you draw the line between, okay, yeah, I can figure that out versus like, I might have some serious liability on my hand, or I might need some special certifications or licenses, something like that. Yeah. Well, a lot of times you can actually work part. I mean, the thing about all these companies, Nick, is that they're all really hurting for employees. You could go get paid to learn how to install steam showers by calling that company and saying, I really want a side job on the evenings and weekends.

17:54They would easily hire you for$20 an hour to come work for them and do that stuff. So it's like going to school while getting paid to do it. So that's one option that I love. The second option is YouTube. I mean, it's amazing what you can learn on YouTube. I ended up installing my closet myself after I didn't want to pay the$3 ,500 for the basic package from California closets or inspired closets. It took me about 20 hours total. I built the closet of my dreams, had a ton of fun, and it's not as hard as you would think. So that's my advice there. Okay, so you've got this list, five to 10 business ideas with varying degrees of complexity.

18:28What happens next in your kind of startup evaluation process? Yep, open up your computer, go on Google, and search each business. So gutter cleanings on your list, you're gonna search gutter cleanings and wherever you're from, like Bay Area, wherever, Athens, Georgia. and you're going to call the first three companies and you're going to make a little Excel spreadsheet and you're going to kind of play a customer. You're going to pretend to be a customer. You're going to have an address that you need them to come quote service for, or you're just going to pick their brain and you're going to kind of weigh them on three things.

18:54Number one is speed. Like I said, quote velocity. How fast can you come out? How fast can you provide a service? Because you know that if they're booked out four weeks, A, they're losing a lot of business and B, they are very, very, very busy. The next thing you're going to look at is accessibility and digital marketing. Do they have a website? Most of them, you'd be very surprised that you'll see one with a Google listing with no website, no real systems, no digital marketing, no advertising. Last one I like to look at is pricing. For example, the landscape company that did get me the quote wanted$23 ,000 to put a sidewalk around that I'd calculated how many yards of concrete, how much wood I needed to do it.

19:27It was about$1 ,500 in material. That is example of where they've just continued to raise their prices because they know they're the only ones in town that are getting out and giving people quotes and they're getting a lot of jobs. So speed, accessibility, and pricing. That's the things that you really look at, you can analyze. And I do this all on the phone by playing a customer. So I'll call the top three businesses of all 10 on my list. So I'm making 30 phone calls and I'm keeping a little spreadsheet of, okay, and I'm just, if all three enter the phone, if all three are not that busy, if all three are very eager to get your business, if all three are running Google AdWords, if all three have pretty low pricing, I cross that off my list.

20:01But if they're slow, if they're not interested in my business, if they're not running ads, If they're very expensive, I circle it. So after that exercise, I usually have a list of about three businesses left that there's some meat on the bone here. There might be an opportunity for me to carve out a piece of the pie. Do you find even in these low skill businesses, there is apparent margin out there? There is more apparent demand than there is supply like for window washing or gutter cleaning or something like that. It's like, okay, with a ladder and a squeegee, like I could get this done. And do you find even with stuff like low barrier to entry, like the pet waste removal, or is it just like, hey, it's a race to the bottom, it's commoditized, there's nothing left here?

20:43That's an excellent question. And that is the number one complaint that you hear from all the smart entrepreneurs who want an online scalable business. They all say, why would I do that? Why would I compete against Craigslisters? Why would I race to the bottom? Why would I go in these low margin, non-scalable businesses? And in my opinion, they have the wrong mindset, okay? you don't need to get every single customer. That's number one. You need to shift your mindset of saying, okay, I'm going to convert 30 % of my bids and I only want a certain type of customer. I think a lot of business owners early on, they say, okay, I'm going to get, they kind of get emotional about converting leads to jobs and they want to get every customer and they want to win every bid and they'll discount and they'll drop their prices and they'll do what they have to do to win every customer.

21:25Whereas if you're doing this the right way, you understand that, okay, I'm only going to convert one third, 25 % of all these leads that come in, but I'm going to go after the customers that need two things. They want professionalism and they want speed. They want somebody who's super professional and they want somebody who can do this stuff quickly and price is not as important to them. There's a lot of customers like that out there. I'm one of those customers. If I'm calling around to lawn care companies, I want somebody who's professional, who shows up in a collared shirt, who I don't have to worry about being unprofessional around my family or driving a beat up pickup truck with holes in the side panels.

21:57You know what I mean? You want the customers that are willing to pay the higher price. And I'm telling you, Nick, there are a lot of them out there. So even in these low skilled, low buried entry businesses, you can target high end clientele who are willing to pay more for better service. And you can build a scalable company, even in these service businesses where people will say, that's not a scalable business. Why would I ever target that? Right. Well, everything is scalable with the right systems in place. But you bring up an important point about pricing. This was my biggest mistake when I was painting houses in college was pricing too low because I was afraid I wasn't getting enough work to keep my crews busy.

22:32So I'd discount, discount, discount. And I probably would have been better off accepting fewer jobs, like hitting a lower hit rate on the bids that I did do, but just targeting a better customer. Or I mean, the customers were fine. It was just probably discounting unnecessarily. Absolutely. And it's the only real way that you can build a stress-free scalable business in the first place. Because if you don't pack in that extra margin, if you don't have that extra money, you're going to constantly be stressed out. You're not going to be able to pay your employees enough. We'll get to employees in a second, because this is the biggest struggle that you hear every business owner say, I can't find good employees.

23:06So we'll talk about that in just a minute. But the way that you scale a business and the way that you build a business with a healthy foundation is get comfortable charging a higher price and not get emotional about losing bids. Losing bids sucks. It sucks to hear a customer say, I'm going to go with a different company because they're cheaper. You have to have that switch in your mind that says, that's not a customer that I wanted anyway. So that's fine with me. Yeah. There was this, we were kind of at our year-end retreat for this painting company. And one of the top performers in the business gets up and he tells this story about how he'd been out to this woman's house three or four times.