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4 Kinds of Professional Services

professional services deal closed with handshake

Who doesn’t like a good framework?

In the sphere of business, there are many of them. While none of them can account for every circumstance or impose perfect order on chaos, frameworks can help us clarify our thoughts, communications, and actions.

What Professional Service Firms Must Do to Thrive, published by Harvard Business Review, provides quite a unique and helpful lens for assessing and articulating the value and the type of service that you offer to the world. It identifies four basic service types:

  • Commodity
  • Procedure
  • Gray Hair
  • Rocket Science

While the researchers found that a sharper focus within one of these types favors top performance, they also note that a company’s service can span several of them.

Let’s consider how a business that specializes in accounting for medical practices could correspond to the different service types:

  • A significant part of your offering might support core, day-to-day accounting processes and might therefore be considered procedural.
  • If your many years of experience allow you to provide specialized consulting, your service type would be “gray-hair.”
  • If you’re staying ahead of trends in accounting, such as artificial intelligence for efficient processing and anomaly detection,, you may be able to offer your clients technical, forward-facing services that would fall under the banner of “rocket science.”

Your service offering may – and probably should – lie primarily within one of the service types, but it’s also good to think a bit more broadly. A unique combination of offerings straddling the different types could be what sets your new business apart.

With the exception of commodity, that is. If your new business is trying to compete on a commodity service, it will be very hard to get anywhere near the scale that you would need to reach profitability. Leave the commodity services to the big players, and start instead with an offering that is more specialized.

Key Takeaways and Actions

  1. The framework in the article identifies four broad categories that services can fall under: 1) Commodity, 2) Procedure, 3) Gray Hair, 4) Rocket Science.
  2. Consider which of the service types your offering corresponds to primarily, and which of the other service types your offering may also encompass.
  3. It may be hard to reach profitability with a commodity service; better to avoid.
  4. Revisit the work you may have already done to define your target audience and competitive advantage, and make refinements.
Feras Alhlou

Feras Alhlou

Feras has founded, grown, and sold businesses in Silicon Valley and abroad, scaling them from zero revenue to 7 and 8 figures. In 2019, he sold e-Nor, a digital marketing consulting company, to dentsu (a top-5 global media company). Feras has served as an advisor to 150+ other new startup businesses, and in his current venture, Start Up With Feras, he's on a mission to help entrepreneurs in the consulting and services space start and grow their businesses smarter and stronger.

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