Running a service business today takes more than skill or hard work. The market moves quickly, customers expect more, and costs continue to rise. Many owners feel stuck, working longer hours yet seeing smaller profits.
The real challenge isn’t just keeping up but learning how to grow without burning out. Success now depends on how well you lead your team, price your work, and manage the daily chaos that comes with running a business.
That’s where experience matters. Luke Peters is someone who’s been through it all. He is the Founder & CEO of Apex CEO Business Turnarounds and Former Founder & CEO of Newair which grew from a small garage idea into one of the top home appliance brands in the country. He is also the host of The 8-Figure Product CEO Podcast.
Without outside investors, he grew it to $ 80 million in yearly revenue and more than $ 600 million in total sales through major retailers like Amazon, Walmart, and Best Buy.
After selling the company in an eight-figure deal, he founded Apex CEO Strategic Coaching to help other business owners do the same, grow stronger, smarter, and more profitably. His approach focuses on four key pillars: alignment, product, people, and margins.
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In this article, we’ll learn what makes a business run smoothly and stay profitable. You’ll see how alignment builds trust, how pricing shapes profit, and how AI can support smart, simple growth when used the right way.
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What’s the Background Behind Building a Successful Service Business?
Luke Peters didn’t start in boardrooms or big companies. His early life was spent in his family’s auto shop, where he fixed engines and built muscle cars.
That kind of work taught discipline and problem-solving long before business school ever entered the picture. School wasn’t his initial focus, but he later earned a degree in microbiology.
Even during college, he ran a small pool service business that paid his tuition and taught him valuable real-world skills, including basic plumbing, electrical work, and repairs. Those experiences shaped how he thinks and works.
The Early Move Into Online Business
In 2001, right after the dot-com crash, Luke was working a government job that didn’t excite him. At the same time, his younger brother was earning a good income selling products online without a degree.
That contrast pushed Luke to try e-commerce. He began by selling HVAC products online at a time when Amazon wasn’t dominant and most people still bought appliances in stores.
That lack of competition made it easier to rank in search results and grow. It wasn’t luck. It was a matter of timing and the courage to try something new, when the internet still felt risky.
Finding Success Through Niche Products
The business later evolved into NewAir, a company focused on compact home appliances. Instead of fighting for space in crowded markets like full-size refrigerators, Luke focused on niche, want-based products such as:
- Wine coolers
- Speciality ice makers
- Beverage fridges
- Compact freezers with unique features
These products stood out because they solved specific lifestyle needs and didn’t compete directly with giant brands.
Understanding Margins and Growth
A strong product company doesn’t need huge markups. Most healthy brands aim for 40 to 50 per cent gross profit and around 10 per cent net profit.
Product lines can scale faster than service companies, especially when you own the design and keep improving it.
That mix of timing, niche focus, and steady growth led Luke to build NewAir to $80 million in revenue and eventually exit in a mid-eight-figure deal.
How Alignment, Accountability, and Transparency Drive a Service Business?
Growth happens when people, products, and profit move in the same direction. Alignment keeps that direction clear.
It isn’t a single meeting or speech. It’s something you build again and again through rhythm, clarity, and follow-through.
Building Alignment Through Consistent Rhythm
Alignment works the same way fitness does. You don’t go once and call it done. You build it by showing up. In business, that rhythm comes from a structure that repeats every week, month, and quarter.
That rhythm starts with:
- Meetings: Hold real one-on-ones with leaders. Talk about progress, issues, and solutions.
- Accountability: If the same problem keeps coming back, someone isn’t being held accountable.
- Clear communication: Most leaders believe they have explained the goals effectively. Most teams still don’t know them. Keep repeating the message until everyone can say it back.
Tools like EOS can help, but no system matters if leaders avoid hard conversations or let standards slide. Alignment needs both direction and discipline.
Why Sharing Numbers Builds Trust
People work more effectively when they understand the financial side of the business. Many employees assume the company keeps all revenue. A simple breakdown shows a very different picture.
Show the real cost of one service truck. Fuel, ads, wages, parts, overhead. When the team sees the math, unpaid jobs and wasted time appear in a very different light. Transparency turns confusion into ownership.
Balancing Openness with Leadership
Openness doesn’t mean spilling every fear. A leader’s tone sets the tone for how the entire team feels. If the leader sounds panicked, the team will likely panic as well. Honesty matters, but so does calm confidence.
People don’t need a perfect leader. They need one they respect. Being friendly is fine, but leadership still means making tough decisions and setting the standard for everyone else.
What’s the Fastest Way to Improve Profit in a Service Business?
One of the easiest ways to increase profit is to raise prices. Most businesses avoid it because they worry about losing customers, but the real danger is maintaining low prices while costs continue to rise.
Supply houses update prices often. Fuel, wages, and advertising costs increase. If your price book stays the same for years, your profit will shrink without warning.
When Prices Look Fine but Profit Isn’t
If the owner isn’t paying themself a normal salary, the business isn’t truly profitable. Many service companies earn around a million a year, but the owner still takes home less than an employee.
That doesn’t mean the business is lean. It means it’s underpriced or running inefficiently.
When profit stays low even with “market pricing,” the real issues are usually:
- Jobs take too long
- Too many people for the current workload
- Weak tracking of time, cost, and waste
- Poor accountability inside the team
When Spending Blocks Profit
Some owners spend early on branding, vehicles, or marketing before the business can support it. A polished brand helps, but not if the owner can’t even pay themself.
A business shouldn’t operate for years with the promise of “someday” profit. Once it reaches the early stage, it should start generating real money, not just stay busy.
How Often Should You Check Margins?
Margins should be seen, not guessed. You don’t need software to figure them out. Pull a few recent jobs, list the true costs in a simple sheet, and you’ll see the truth fast.
Use this as a guide:
- Under 10 per cent net profit: not healthy
- Around 10 per cent: acceptable
- 15 to 20 per cent: strong and ready to scale
A real business pays the owner a fair salary and still makes a profit. If it can’t, the issue is pricing, efficiency, or both.
How a Service Business Should Use AI Today?
AI works best currently as a tool that helps you accomplish more in less time. It can write drafts, sort information, or push ideas forward faster than you could alone.
However, it still requires human judgment, as it can sound confident even when it’s incorrect. So the goal isn’t to let AI replace you, but to let it speed you up.
Where AI Actually Helps
Use AI where it supports the work, not where it replaces judgment. Some of the strongest uses include:
- Content and Writing Support: Great for first drafts, outlines, and rough ideas you can refine.
- Document and Data Review: Quickly breaks down long reports or contracts, so you don’t start from scratch.
- Idea Expansion and Planning: Helps you explore options, compare angles, or build structure around loose thoughts.
- Early-Stage Product Thinking: Useful for spotting which parts of an idea could be unique or patentable.
AI saves time, but it doesn’t make the final call. You still decide what’s useful and what goes in the trash.
The Double-Edged Side of AI
AI multiplies your habits. If your system works well, AI makes it work faster. If your process is weak, AI spreads the mistakes faster. Bad input leads to bad output, so editing remains key. You can’t skip thinking just because a tool feels smart.
AI Isn’t a Team Member Yet
AI doesn’t own results, take risks, or lead projects. It’s not replacing full roles yet. Every business has access to the same tools, so the real edge comes from using them well, not just using them first.
Let AI handle repetitive work. You handle the decisions. That balance keeps speed, clarity, and quality in the same place.
Conclusion
Building a strong service business isn’t about luck or fancy tools. It’s about clear goals, steady action, and people who care about what they do.
When a team understands how the business operates and what success entails, they begin to take ownership. That’s when things move faster and smoothly.
Profit doesn’t come from guessing. It comes from tracking, adjusting, and staying consistent. If costs rise, prices should follow. If work slows down, identify the gap and address it. Small improvements add up fast when everyone stays aligned.
AI can help speed things up, but it’s not a replacement for thinking. It helps with ideas, drafts, and planning, but it still needs your judgment. Use it to save time, not to skip effort.
At the end of the day, a service business grows when its people, prices, and purpose stay connected. Keep things simple, stay transparent with your team, and don’t shy away from hard conversations.
The goal isn’t just to grow but to build something that lasts, something that keeps working even when you step back. That’s what real success looks like.
FAQs
What’s the biggest mistake new service business owners make?
Many new owners try to please everyone. They underprice their work and overextend their time. The result is burnout and low profit. Focus on doing fewer things better, rather than trying to do everything for everyone.
How important is customer experience in a service business?
It’s everything. People don’t just buy the service; they buy how it makes them feel. A small act, such as a follow-up call or quick response, builds lasting trust.
How can a service business attract repeat customers?
Stay consistent and personal. Remember client preferences, deliver on promises, and follow up after jobs. Loyalty grows from reliability, not discounts.
What role does leadership play in a service business?
Strong leadership sets the tone for everything. If the leader remains calm, accountable, and fair, the team will follow. Weak leadership spreads confusion and kills motivation.
How should a service business handle customer complaint?
Listen first, then fix fast. Don’t argue or delay. A quick, respectful response turns frustration into respect.
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