It isn’t hard to see in our culture as a digital people. The desire (or perhaps even pressure) to own your own business is simple to understand. Whether you find yourself driven by a need to diversify your income, to be recognized & paid for what you’re worth, to be free to pursue rewarding projects, or to travel the world, each of these needs/dreams require substantial freedom from the constraints of both money and time.
If you’ve spent just 10 minutes on social media lately, you are almost guaranteed to have come across a meme, motivational speech, or inspirational quote about entrepreneurship. The goal to found a startup—launching a new business to help its customers in a meaningful way—is a grand endeavor no doubt. But something about all the hype simply doesn’t add up: The birth-to-death rate of small businesses in metro areas is actually negative, and has been for nearly a decade.
Breaking down each of the closures could be chalked up to any number of reasons, some of which might not even apply to your idea. Instead of reviewing failures here, I’m going to cover the types of business models you could launch & turn a profit from as low cost startups.
Local Service Businesses
Though operating a local service business may lack the zeal & sexiness you pictured in your martini-on-the-beach fantasies, it is the most practical vehicle for you to earn $100K+ annually with only a couple grand to start with. This business type requires a ton of time & nurturing during the first year or so, challenging your time management skills relentlessly (especially if you have a full-time job).
I recommend the first-time founders out there thoroughly consider starting up a local service business, not just because of lower costs, but for the experience. You will learn first hand about the business filing requirements, back office responsibilities, and practical problem-solving skills when dealing with your customers. Besides, this is a solid route to earn your stripes for something bigger & better later. Here are some great ideas for new local service businesses:
- Residential house cleaning
- Lawn care & landscaping
- Carpet steam cleaning
- Mobile computer repair
- Mobile car wash & waxing
Running a referral agency is still relatively low-cost, but has some major differences. Referral agencies require smart spending, as well as thorough testing, to see what’s working for you. If you spend your money too quickly, or on the wrong things, you’re SOL before getting anywhere.
Since this type of business is essentially a middle man, your marketing chops will be tested rather than your hiring/supervisory skills. This means you must possess an understanding of ads management, social media marketing, content & email strategies, as well as the technical needs to maintain a site. This is a fantastic business model if you’ve ever dreamt of working remotely or working without teams. Here are some examples of referral agencies:
- Lead generation for local service businesses
- Reviews site for a chosen niche (e.g. pizza lovers)
- News site for a chosen niche (e.g. cryptocurrency)
- Hobby site with affiliate links
- A travel blog with affiliate links
The above is just a small list of suggestions, while the actual number of possibilities is impossible to quantify. Don’t be afraid to pivot or make adjustments to your model, and don’t forget to TEST! Remember when you’re getting ready to launch any type of business, the first 6-12 months are seldom sexy in any way, shape, or form. The goals that motivate you must be enough to carry you through the darker times. The dreams of martinis on the beach won’t come true for a while, but they’ll never come at all if you don’t try.