I have been in the high tech service business since I graduated college (oh so many years ago) and there are three simple rules that have to be followed to be successful - they are not "rocket surgery" (a saying I saw on a company truck, just can't remember which company) - but if all three are not followed, you will feel the "pinch" from all sides -- customers, investors and employees.
Here they are:
Simple Rule 1: Know what service(s) you are providing.
Seems simple enough, but many service providers have very little tolerance for "focus" within their business. There is a belief that if one service works well, them a whole host of similar services will work also. When I say "Know your services" I'm talking about that mix of services that makes you unique in the minds of the customer. Since most of my experience is within the world of technology, here's an example: If you told me your service was technology consulting, I would tell you that's too broad. Technology can be anything - so what type of technology (pick one) and what kind of consulting (planning, analysis, implementation, process, database, hardware, software, applications). So, what I would be looking for is something like the following to describe your services: I help companies determine the impact of new workplace technologies (that's pretty good, still fairly broad, but narrow enough to drive a conversation) -- another example would be: My company hosts interactive websites for Doctors (once again, provides enough information that you aren't doing everything for everybody).
Simple Rule 2: Know who your customers are
Another simple thing, but forgotten by all but the most diligent companies. Your customers are not anyone willing to pay for your services - much too broad and completely unachievable by your company. There are Fortune 500 companies that get this wrong all the time and pay for it on a daily basis -- you can not serve all companies (or all consumer groups) that requires too much effort and will dilute everything you do. Not all customers are created equal and in the service business, not knowing who they are, will cost you money (and lots of it). Also, people buy to solve problems - although solving world hunger is a lofty goal, it's too broad and too big -- decided to solve the simplest "complex" problem - solve hunger within your own community first!
Simple Rule 3: Know what you're worth
This is a pricing situation - many service providers de-value their services from the first conversation with the customer. Having a revenue goal is not the same as having a pricing goal. There are lots of ways to sell $10 million (or $100 million) of your service. You can sell 10 million for a $1 or one for $10 million - and everything in between. If you've done a good job with Rule 1 and Rule 2, you should have a good idea on Rule 3. If you are selling security systems to homeowners, then you should know the basic price range your customers will purchase within. In fact, homeowners are too broad - you need to determine homes in what price range - that will drive the price of the security system. Now, if you are selling these security systems to homes priced in the $150K to $250K range, you probably won't get many takers if the system is $20K (unless you are talking to a gadget head that is very, very paranoid).
That's it, just three rules - easily stated, but very hard to implement.