1. Freelancing / Consulting
Freelancing is one of the most popular business models and perhaps one of the quickest and easiest ways to get started with your own business. Most of my friends that weren’t working full time were freelancers.
One reason that businesses like hiring freelancers is that they are less of a commitment than full time employees and sometimes less expensive.
Consultants often charge high fees for their expertise. They sometimes only provide advice, but some consultants will also do some hands on work for their clients.
The growth path for freelancers is usually to either become a highly paid consultant or start their own agency.
Freelancing is probably one of the easiest businesses to start. There is plenty of demand for freelancers and you can probably start making money right away.
Another nice aspect of freelancing is that you can start doing it part time, even if you are currently employed full time. This will allow you to build your portfolio, start growing your client base and get some experience.
Most methods that freelancers use to get clients are usually free or low cost. With a service based business, you also don’t have to worry about product creation or employees when you start.
How Freelancers Find Customers:
Networking locally with the community and public speaking seem to be the most popular ways to find freelance work.
Referral networking groups like BNI or some Meetup groups can also help. Public speaking is another option to allows you to present yourself as an authority on a subject and get more clients.
People around the world can tap into the global economy using sites like Upwork or Freelancer.com.
The downside of freelancing is that there is a lot of competition and a lot of traps that you can fall into that will eventually cause you to fail.
Common mistakes include charging too little, not have a good sales or marketing process and poor productivity planning.
Scaling a freelance business into an agency can also be challenging since hiring, training and managing service professionals can be time consuming.
The biggest challenges that freelancers have is finding enough clients and also finding clients that are willing to pay a good rate.
To grow from freelancing to consulting or an agency, you need to be able to charge higher rates than most freelancers and justify the cost to your customer. Figuring out a way to differentiate yourself from the competition is helpful.
As far as finding enough clients is concerned, most freelancers aren’t spending enough time on marketing or networking.
2. Brick & Mortar Retail
Another common business model is starting a brick and mortar business. Although brick and mortar businesses are a lot of work, some people like the idea of starting their own store and selling something to people locally.
One of the biggest pros of a brick and mortar store is the physical presence. People like to shop in person and you and since selling in person is more effective than through the phone or online, your staff will also be able to sell more effectively.
Word of mouth can also help your business grow and a good location can send you a good amount of foot traffic.
How Brick and Mortar Businesses Find Customers:
Most brick and mortar businesses find customer from people passing by, if they are in a good location. Word of mouth and referrals are also very important.
If your product or service are good, then you might be able to do well even if your marketing skills aren’t that great. Some businesses do well based on word of mouth and foot traffic alone.
Events and local media coverage can help as well, especially when a new business is first launched. Some businesses also use local advertising and direct mail.
Perhaps the biggest con of a brick and mortar business is the large cost. You will need to rent or purchase a building or office and possibly hire some employees.
Since the costs of maintaining a brick and mortar business are higher than an online business, maintaining a good volume of sales is critical. Overall, it can be a bigger financial risk than starting an online business.
Brick and mortar business owners can also find themselves working long or odd hours. It’s a lot of work and a lot to manage.
Another con is that your business is restricted to the local area. Small niches that can do well online could fail in a brick and mortar setting if there isn’t enough demand in the local area.
A big challenge that local businesses face is keeping customers coming back and maintaining profitability. The quality of the products and services must stand out from competitors.
3. E-commerce Retail
Selling physical products through an online e-commerce store can be lucrative, although it is also competitive.
E-commerce can potentially have a large financial upside. Even if you sell low priced products, if enough people order then you could end up making a 6 or 7 figure income.
Dropshipping can make it really easy to open up a store and sell thousands of products. Fulfillment houses can store and ship products for you, if your supplier will not drop ship.
Selling physical products is also intuitive. You don’t have to be as good as selling or copywriting and you don’t have to worry about creating a sales funnel or process if your products are inexpensive.
Your store can make money while you sleep and you can potentially sell to people worldwide.
How E-commerce Stores Find Customers:
Search engine optimization (SEO) for high traffic money keywords is important for an e-commerce business. Most e-commerce retail businesses rely heavily on SEO.
Growing an email list of customers and interested prospects is also helpful. Some business also use PR, PPC, social media and affiliate marketing to drive more sales.
E-commerce is very SEO focused and the keywords are very competitive. A sudden change in search engine position (which can sometimes be caused by Google’s algorithm) can result in a lot of lost sales (in some cases millions of dollars a day).
E-commerce wholesalers may not need any SEO, so getting retailers to carry your products are a challenge as well as managing logistics.
Managing orders and customer service are some additional challenges and if your store grows, then you may need to hire help quickly.
A lot of e-commerce niches are dominated by big brands so the biggest challenge is being able to compete with established competitors with big budgets and brand recognition. While the money potential is good, beginner marketers might have difficulty starting off in e-commerce due to the heavy competition.
4. SAAS / Software
Software is a popular business because the automation can help businesses save money and take care of tedious or difficult tasks.
Purchasing software often costs less than hiring people to perform a tasks and can eliminate costly mistakes that humans might make. Therefore, an effective piece of software can be an easy sell if you are able to reach the right prospects.
How SAAS Businesses Find Customers:
Software businesses find customers in a variety of ways, including inbound marketing, content marketing and sales outreach.
You’ll either have to be a good coder or hire a good coder or team to build and maintain your software. If the demand for your software isn’t strong enough, then your software project could end up being a costly failure.
Cost can also be another factor as sophisticated software could end up costing millions of dollars to develop. Outside funding may be required.
Also, most software businesses require strong sales or marketing to get seen by prospects.
Finding customers and creating an effective sales and marketing plan are challenges that software businesses face. Some software businesses struggle with finding the right talent to continue to build and maintain their software.
Information marketing is a popular business model and Ebooks are one of the simplest ways to get started. Although Ebooks can be sold for Amazon Kindle, some people choose to sell them on their own websites.
Some people still make a great living selling only Ebooks.
Ebooks are easier to create than online courses and the cost to set up a website to sell them is affordable. Ebooks are also 100% profit.
Unlike courses, you don’t have to worry about community interaction or coaching calls.
How Ebook authors Find Customers:
Some Ebook authors find customers on Amazon, but many spend a lot of time building their email lists.
Some Ebook writers also use affiliate marketing to get more buyers.
Ebooks can take some time to create and can still fail. They also tend to sell for less than online courses.
To sell an Ebook, you will have to be able to convince your prospects of the value. In other words, you will have to learn to write good sales copy.
The biggest challenge for Ebook sellers is finding an audience. There are tons of competing Ebooks out there, so standing out is important.
To make as much money as an online course, you also need a lot more traffic and customers.
6. Online Courses / Product Launches (Micro-continuity)
Online courses are one of the most popular way that influential bloggers and online personalities make money.
Online courses are easier to sell than membership sites because they are a one time payment. They are also more profitable than Ebooks in most cases.
People can set up their own online courses affordably using WordPress plugins like Wishlist member or Digital Access Pass. Another option is to upload the course to an online course network like Udemy.
How Course Creators Find Customers:
The most common way to find customers by building an email list through inbound marketing.
Course creators sometimes expand into paid advertising and affiliate marketing after they have a successful product launch.
A lot of people that upload their courses to sites like Udemy will get traffic from people that are already on Udemy. Udemy will also promote courses that sell well with their own resources, but one reason that people will sell on their own sites instead is less competition and higher selling prices.
Sites like Udemy can be competitive, so standing out and knowing how to sell are important.
Also, building your own list can be a challenge, especially for beginners.
The biggest challenges for course creators is creating marketing content that convinces people to buy and also generating enough leads to sell their product.
7. Membership Site (Forced Continuity)
Membership sites can be nice because they generate ongoing income, instead of income from a one time sale. However, you also need to provide ongoing value to your members.
In a forced continuity business model, customers pay every month by default unless they tell you to stop. A micro-continuity model will stop payment after a certain time, like 3 payments or the person can just pay the entire amount upfront.
The biggest advantage of a membership site is that it provides ongoing income. If you get more customers over time, your income can continue to increase.
A community set up can really allow you to build relationships with your customers and ultimately help them to succeed.
How Membership Sites Find Customers:
Membership sites find customers in pretty much the same ways as course creators and E-book sellers. Inbound marketing, paid advertising and affiliate programs are some of these methods.
Since people are paying on an ongoing basis, the selling price is often lower and it takes more time to get the same amount you would have gotten from selling a micro-continuity product.
You will also have to commit to creating new content on an ongoing basis for your customers.
One of the biggest challenges of the membership setup is to create enough valuable content for your community to keep them interested.
Finding time to promote your membership site can be another challenge, since you’ll spend a good amount of your time with ongoing content creation.
Blogging is a popular business idea, but also has a high failure rate. What inspires many people to get into blogging is seeing other people succeed with it and living a lifestyle that most people can only dream of.
Building your audience and becoming a thought leader can allow you to create a sustainable business. Blogging also allows you to connect with other bloggers and thought leaders.
Succeeding in blogging can allow you to live an enviable lifestyle, set your own schedule and travel at will.
The business is also sustainable if you continue to create value for your audience.
How Bloggers Find Customers:
Many bloggers will sell products or services to their visitors, but some blogs will sell advertising.
Blogging is one of the most challenging businesses to start. A lot of people will struggle with building a list of leads or generating traffic to their site.
Another problem that bloggers face is figuring out how to best monetize their audience.
Also, it usually takes time to grow a blog to profitability unless you are already very experienced and knowledgeable in online marketing.
There are many challenges with blogging and it requires developing multiple skill sets.
Bloggers have to learn and manage many things. Generating traffic and leads is where most bloggers get stuck. But even after that, product creation and learning how to create a sales funnel are other topics that bloggers have to learn.
Creating ongoing content is another challenge that bloggers face. Consistent content creation is important and the content also needs to be valuable enough to keep your readers’ attention.
For bloggers looking to succeed with an advertising model, being able to drive a very large amount of traffic is required.
9. Investing / Trading
Investing or short term trading is one business model that some people consider. Although trading stocks seems like a simple way to make money, it’s actually very difficult to do well.
In fact, even most professional fund managers can’t outperform index funds. Most people who trade stocks are gambling and don’t fully understand the mechanics of how the markets work or even the fundamental value of the assets that they are purchasing.
Only a tiny percent of people will succeed with investing or trading securities enough to do it as a full time business. But the few people that figure out how to do this make a lot of money.
Most security traders spend money subscribing to newsletters and sometimes purchase software and market data.
How Traders Make Money:
Sometimes, securities can experience big price changes in a short amount of time.
People that invest long term can make enough money to make a living, but only if they have a significant amount of money invested in the market and are very good at what they do. Even some of the most well known professional investors have failed catastrophically on occasion.
Since you put a good amount of your own money at risk, there are psychological factors that work against you. People make bad decisions with money when fear and greed come into play.
You are also competing against well funded professionals with years of experience. The odds of succeeding at this type of business are very low.
Short term trading one of the most difficult businesses to do well with and should be avoided by most people. People who do well with investing usually are good at managing risk, but it’s rarely enough for a full time income.
10. Real Estate
It’s been said that nothing has created more millionaires than real estate. While that may be true, it’s also important to note that most people who did well with real estate also happened to buy at a time when the market was beginning to pick up.
There are many ways to make money in real estate including fixing up and flipping houses, renting out properties or becoming a real estate agent or broker.
Real estate can be very lucrative, but having a good knowledge of real estate is important. Market conditions can also have an effect on your success.
For real estate agents, starting off can be low cost and selling houses can be fun.
How to Find Customers:
Good marketing and networking can be helpful when it comes to finding buyers and renters, but market conditions can affect your outlook.
For real estate agents, most rely on in person networking. More savvy agents will venture into advertising and even online marketing.
It can take a lot of money to get started in real estate investing. You also have to know the area well and the market values of homes. Having a good agent and network of contacts can be helpful for real estate investors.
Real estate agents aren’t taught how to market themselves or to get customers, which is why many will fail. Having an entirely commission based salary is also something that many people wouldn’t be comfortable with.
One of the biggest challenges with real estate is accurately estimating all the costs involved and understanding the market.
By: Brian Lang