A few weeks back, I visited a friend who’s a founder. Their business moved to a new location, and they asked me to check out the new space. I’ve known the founder for years and know what products the business offers, but I didn’t really understand how it offers them. So I decided to use my visit to learn “how the sausage is made.”

I toured the space and observed how the operation runs. It’s a well-oiled machine, but one thing caught my attention: one process seemed high priority but inefficient compared to everything else they did. I made inquiries and learned that the process is critical to generating revenue, which makes it a high priority, and it has to be done multiple times a week. This critical, inefficient process is the founder’s biggest annoyance and time suck.

After I left, I started making mental notes about new technologies I learn about that might automate parts of this process. I read about one promising new technology and shared it with the founder this weekend.

Two big takeaways from this experience:

• In Sam Zell’s autobiography, he said that visiting people in their environment is a great way to learn about them. Zell was right. Going to visit people and watching them do their normal work is the best way to understand their workflows and problems. It’s also the best way to deeply understand their pain points. Visiting this entrepreneur’s office helped me understand the severity of their pain. Video meetings and phone calls are good, but in-person visits are best.
• This founder has a never-ending to-do list. After I shared the new technology with them, they were excited about reducing the time and cost associated with this process. However, they’re not looking forward to learning how to use a new technology. In fact, they don’t really care about the technology or how it works. They want a solution to the problem. They want a service that takes care of everything from start to finish. The end result, including its quality, are all that matters.

There’s an opportunity to provide services that solve painful problems in specific small business niches. If new technologies such as AI are used to do most of the work, the services potentially can be high margin and scale nicely to seven or even eight figures in revenue with a small team. To understand what problems niche small businesses need solutions to, visit their operations. Look for points of frustration and inefficiencies that impact revenue generation. Then find technologies that solve the problem. Create a service offering that handles solving the problem from A to Z. Seems like a decent playbook for building a scalable services business in a niche.