In this post, we are going to blitz through a lot of different types of businesses that are currently popular and successful in 2018. The main purpose of this post is to give you some inspiration and let you know just what is possible. And if you want to investigate further I will link to other good posts and resources.
I’m not going to talk about every single type of business out there, I’m just going to limit it down to ones you can start with just yourself, a computer and an internet connection. That means that there isn’t a big barrier to entry and you can do it from anywhere.
Okay great let’s get on with it. So, I’ll split these businesses into five different types:
- Physical Product Brands – Include any business that produces a product you can touch or hold in your hand.
- Service-Based Businesses – Include any business that offers a service to another person or another business, think about everything from accounting to web design. legal help to translation.
- Entertainment Businesses – Include any business where you’re creating something that is solely for someone else’s entertainment. Videos, novels, video games, lifestyle Instagrammers.
- Education-Based Businesses – Include any business that tries to educate. Consider an online course where you teach someone French, or perhaps a series of YouTube videos on the formation rise and fall of the Roman Empire.
- Opportunity-Based Businesses – Include any business or money making scheme that makes money from exploiting a loophole or inefficiency in the market. For instance buying things on sale in supermakets and reselling them immediately online.
- 1 Physical Product Brands
- 2 Service-Based Business
- 3 Entertainment Businesses
- 4 Education-Based Business
- 5 Opportunity-Based Business
Physical Product Brands
So how on earth do you run this sort of business from just your computer? Well, the way to do it is to outsource every step of the process that requires any touching or dealing with the physical item.
- You design the product on your computer, or pay someone else to design it.
- You take the design and give it to a factory either in somewhere like China or a bit closer to home.
- Once the factory has created your product you get another company to quality check it and make sure that it is up to your standard.
- Next another company takes the products and ships it from where it’s been made to where you plan to sell it.
- The products then get delivered to a fulfilment warehouse near your destination market run by yet another company.
- And then finally you then sell on directly to other businesses or distributors, or you can have your own online ecommerce store to sell online. When an order is received your fulfilment warehouse delivers it.
Companies have been building these sort of logistics networks for decades, probably even centuries. But it is only in last few years that they have become both accessible and popular for people like us to use.
Two companies are largely responsible for opening up this world to us. One of them is Amazon FBA and the other one is Alibaba.
Alibaba is an online marketplace where you can get in touch directly with hundreds of factories around the world. particularly in places like China and India, where the cost of producing goods is very low. Whereas once upon a time, you would either have to spend a lot of time travelling or spend a lot on large minimum orders. Now you can contact hundreds of these small-time factories all of which are competing for your business and are willing to create your first product for just a few hundred pounds.
Amazon FBA (fulfilment by Amazon), is the logistics network behind Amazon. It is a series of warehouses that us as sellers and small businesses can use. We can send in our products in bulk to their warehouses and then forward on orders that come through on Amazon or our own websites. Amazon will process the order, go to the warehouse, pick it out and then send it for delivery. Fulfilment networks like this aren’t a new thing. But ones that don’t have a minimum order, large monthly fee and have an easy to use web interfaces are few and far between.
By combining these two services it is suddenly very easy to find factories with cheap and small minimum orders and then very easy to plug straight into a distribution network with low minimum order requirements.
A quick warning: Both of these services have picked up a bit of reputation as being associated with get-rich-quick schemes. Please don’t look at them like that. They are tools that can help you build your brand and scale it. If your brand is rubbish or you do no marketing then your business is not going to work no matter how good their distribution system is.
What Product Should You Create?
Okay so you want to start a product-based business, well what do you create? The world really is your oyster.
My top piece of advice is to create something that you yourself will use. In particular, if you’ve got a hobby or interest that’s not particularly mainstream, I recommend starting there.
So, for instance, my two product-based businesses are a gin company, that I started because I really like gin and had a good idea for a unique product, and a table tennis brand, because I’m very interested in table tennis and had an idea for a bat that I believed the market was missing.
The most obvious advantage of creating a product related to a hobby or interest you already have is that you will have a good idea of how to market it already. You will know people who are interested in it and will know where your target market likes to hang out.
Now you have a general area and perhaps a product in mind, how do you asses if it is good enough?
Generally, I recommend staying away from electronics, starting with something that doesn’t have a sell-by date and has few moving parts. But you also don’t want it too simple because you need customers to be able to assess the quality of your product by relying on your brand’s reputation, not on how it looks. Don’t choose something like marshmallow sticks where one stick is much the same as any other.
Don’t go too big or heavy because then your storage and delivery costs will be really high. Don’t go too expensive because then the cost of returns or problems with single items will cost you a lot. And don’t go too cheap because the fulfilment cost will take up too large a portion of the price.
Alright that all sounds a bit abstract. What does too big or too small exactly mean? Checkout this post where I try and put numbers to all the advice. How To Find The Best Products To Sell On Amazon
I’ve started with this type of business because it is my favourite, but it does have one big downside. That is that you require a decent amount of money to start. Maybe not a lot in the grand scheme of things, but still you do need probably a minimum of £5,000.
And do not expect to take your money out too quickly, building a brand takes time. It takes a long time to get the prototypes right, to get your stock made, get it to the warehouses and then start to sell. And then as soon as you start bringing in a profit you’ll need that money to invest in more stock and expanding your product lines.
Realistically you’re looking at a year before you can start paying yourself a salary. If you want a business that will get you out of your job right now this is not it. But it is something that you can start on the side and build up slowly. After 6-18 months you will have a brand that not only pays a decent income but is also worth something.
And from there the sky’s the limit. There is no reason why a brand started this way as a one-person business cannot grow and scale and become the next Apple, Nike or Adidas.
Resources To Help You Start A Product Based Business
Here are two pretty in-depth posts that are a good place to start:
I’ve put this one second because it is almost the complete opposite to the first. Whereas a physical product-based business might need a year plus before you can start taking money out, service-based businesses often start earning straight away.
A few years ago, I convinced my then-girlfriend, now wife, to quit her job and start a business so that we could go travelling together. What business did she start? A service-based business so she would start earning straightaway and could start funding our travels. You can read her story here.
Perhaps the easiest service-based business to start is as a freelancer or contractor. In my wife Emma’s case, she had a background in marketing so immediately started looking for marketing projects she could get paid to do. Freelancing covers a huge variety of things from writers to translators to lawyers to accountants.
Once again freelancing isn’t a new business model but the internet does make it easier than ever both to get started and to find clients. What I really like about this model is you can start small with almost no initial investment and then scale up.
You can scale up either by taking on staff and scaling the quantity of work you do. Or by charging more and more and scaling the quality of your work.
One of my side businesses is a consultancy, I don’t do much work on it as I don’t really enjoy it. But when I do I charge quite a lot of money to make it really worth my time. I can change my pricing to affect the supply and demand balance until it is at a level I’m happy with.
What Service Should You Offer?
So, how do you get going with a service based business? Well if you already have an in-demand skill and it’s quite straightforward, let’s say you’re a certified accountant it is very easy for you to start offering your services as an accountant. Or let’s say you have a background in web development and you’re really good at making websites, it’ll be very easy for you to start.
But what if you don’t have any of those skills? Well, there are all sorts of basic things that are always needed. If you’re an English language native speaker there’s a huge demand for people who can write fairly like a native English speaker. Or if you don’t have that there are really basic things such as data entry. But generally, those jobs that anyone can do are quite limited in how much they pay. You are probably better off looking to develop a skill that is in demand.
In 2017, life coaching became quite trendy. A lot of people trained as life coaches for a month or two and then started offering their services and getting clients. In 2016 there weren’t enough WordPress experts available, so people learnt the basic and started offering their talents to instal and set up new WordPress sites. What will be the next in demand skill of 2019?
One of the great things about the Internet at the moment is that information is very easy to acquire and you no longer need to pay a university a fortune to get access to their material. Now a lot of universities are putting their courses online for free and even if they’re not there’s often alternative ways to learn what were once elitist subjects.
So, I have spoken a little bit about the advantages of doing a service-based business now let’s talk about the disadvantages.
One of them is that it is a lot more difficult to scale your business independently of you. Your personality and your skill set are often tied to whatever is you do. Think about the brand Adidas, it doesn’t matter who is controlling it at any one time, that is still a powerful brand and worth something. Whereas for my consultancy, no one else can do that – I need to be there. I need to be putting in the hours and exchanging my time for money. Yes, it is possible to build an agency and have it independent yourself and then sell it on but it is much more difficult.
The other disadvantage is that because it’s so easy to get into there’s already a lot of competition out there. This in turn drives the price down and means that what once was quite a valuable skill, can now be hired cheaply. If you try and market yourself as the cheapest then you’re going to fail – there will always be someone willing to do it for less money than you. Instead you need to narrow your focus, niche down and skill up.
Resources To Help You Start A Service-Based Business
- Freelancer is a marketplace for freelancers. (my refer-a-friend link)
- Coursera is an online place where you can take courses from many of the world’s top universities
- How I Started A Consultancy Business
- Quit Your Job, Become A Freelancer And Travel The World
Okay, enough of service-based businesses let’s move on to the next type. Entertainment businesses. Now this is something I don’t know that much about because I’ve never built one myself. But you can see them all over the internet, from Instagram celebrities to YouTubers.Twitch streamers to video game developers.
There are whole industries built off the back of providing other people with entertainment. And nowadays you don’t need to have a publisher or a literary agent to say you’re good enough to publish your own novel. And you don’t need a big movie studio to okay your idea in order to produce a film. You can just go do it yourself and if people like it, they will support you.
If you’ve always wanted to create some sort of entertainment, now is pretty much the best time ever, probably in the history of humanity, for you to do it.
People are quite willing to support new ideas and new projects and with websites like Patreon and Kickstarter they are putting their money where their mouths are. Even big brands are cottoning on to the influence these independent producers peddle and are paying them a lot of money.
People keep telling me that the age of YouTube and the SoundCloud rapper is over and that those things are now too competitive. I 100% disagree. I think that those entertainment mediums are becoming more and more popular and that the next generation of industry big money investments will be going towards YouTube creators and independent producers.
What Entertainment Should You Offer?
It’s hard really to compare this type of business with the other two, because it depends so much on the quality and production value of whatever is you’re creating. If you’re naturally good at filmmaking and you work really hard and you have a little bit of luck to help you along, then you could well really make it big.
On the other hand, you might not be very good. I tried my hand at writing novels, I wrote a quick one which are published on Amazon and yeah, it’s not a talent that I have. Maybe one day it’s something I’ll work on as a passion project but I know that it is never really going to be a viable income stream or a business.
But it does bring me on to our next type of business which uses pretty much all the same mediums as an entertainment-based business but isn’t so dependent on you being interesting or creative or popular. And that is an education-based business.
With this blog I am not trying to be entertaining or funny, if I did I would probably fail as I do not have those skills. But what I do have it’s a lot of knowledge on a few subjects which people find helpful and interesting.
So far my readers are finding the content of this blog useful enough that they can get over the dull writing and grammatical errors, and hopefully that will continue.
We’ve mentioned a few different mediums already, but there really are loads out there. YouTube, podcasting, blogging, creating your own courses that people pay for, doing webinars, one-to-one tuition, and even setting up in-person lectures around the world.
What Education-Based Business Should You Start?
If you’re a real expert in something then this is quite a straightforward and obvious business for you to try out.
Let’s say you’re a world-class pianist then you’ll probably find that there is quite a big market of people who’d want to learn directly from you. From coaching them live through Skype, or them recording their music and sending it to you, or even trying to teach some of your techniques via YouTube or a paid course. But, then again maybe not because maybe there’s a lot of great pianists already out there. Even though the thing you’re best at is piano, there might be something else you’re almost as good at but isn’t as competitive.
I would suggest there are really two ways for you to go when starting this type of business.
One is trying to find one customer at a time and sell to them directly. You can look on freelancer websites for instance or try and find an agency that puts together students and teachers, and slowly build your business from there. As you grow you can add-on more things like YouTube videos, paid courses or self-published books and start selling to the same audience.
Or you can approach from the complete other side. You can go straight to creating content and hope that people will come across it and you’ll build an audience that way. For instance, I make a pretty good income from this blog but I built that by just putting all my information out there for free and then doing some marketing to try and get people to read it. I think it took six months before it made any money and another year before it was a paying a full-time income.
Whereas if you approach it from the one-customer-at-a-time direction you can start earning straight away. All you need to do is find one client who is willing to pay you a little bit of money and then build up and scale from there.
Resources To Help You Start An Education-Based Business
- Start A Blog In Under An Hour – A Step-By-Step Guide
- What It Takes To Create A Successful Blog – The 3 Crucial Aspects
- This Is How Much We Made When Our YouTube Video Went Vira
All right let’s move on to the fifth and final category, opportunity-based businesses.
I ummed and ahhed for quite a bit about whether I should include this category or not. But I know that if I didn’t I would get loads of questions: What about drop shipping? What about the retail arbitrage? What about matched betting? Questions about all of the popular buzzwords uttered by the Facebook Guru’s from Timbuktu and beyond. So yeah let’s touch on this briefly.
What is an opportunity-based business? What I mean is any sort of business where you’re making money from a market inefficiency.
Retail arbitrage is when you find something in a shop that you can sell for more money online. For instance there are a few apps, such as OAXray, where you can wander around your local supermarket and whatever item you scan will be compared to Amazon. If you can resell it for a profit it will tell you exactly how much you will make.
Retail arbitrage is a very simple business model that makes its money by finding inefficiencies in the market – the inefficiencies between the price you can get a locally versus the price it goes for online. It does make a lot of people good money but it is getting harder and harder the more people who do it. As time goes on the difference between the price you can get stuff in a shop and the price you can sell it for online will shrink to almost nothing and you willl need to start a new business.
Because of that I don’t really recommend it as a long-term business, but that doesn’t mean it’s not worth doing. One of the advantages of it is you can start straight away with just a hundred pounds or so and instantly start learning how Amazon and Amazon FBA works while earning some money. After a while you can use that float and experience to start a different more long-term business.
The same principle really applies to all opportunity-based businesses. They’re normally either short-term or have quite a low cap to how much money can be made.
Okay then let’s talk about a few of these opportunities.
Matched betting is where you take advantage of a sign-up offer that a casino or a bookmaker gives you and extract as much value as you can from that offer and keep it.
Matched betting exists because bookies are in competition with each other to and attract customers in. They think that if they lure you in with free money at the beginning then you’re going to stick around and use them long into the future.
The opportunity lies in just signing up to every bookmaker out there, taking part of the offer and then never playing there again. Matched betting is very well understood and bookies know they are losing a certain amount of money to it. But the reason it still exists is because there is a limit to just how much can be made per person. Once you have signed up and got all the offers, that is it. You need to move on.
I’d say that in 2018 you can probably expect to make a fairly straightforward £2,000 pounds.
So, do I recommend matched betting? Yes, I recommend iit if you’re trying to create a cash flow in order to do something else or just need a bit of extra bit of money on the side. I don’t recommend it as a long-term business.
Read more: Matched Betting – Risk Free, Tax Free Profit
Dropshipping can mean a whole bunch of things but generally it is when you have a storefront (which can be your own website or it can be something like Amazon or eBay, where a customer comes to you to buy a product you don’t actually own. Once they buy it you immediately go and buy it from someone else and have it delivered to the customer.
Now this business model can be used very effectively to build your own brand if the company you are working with is able to dropship you unique branded items. But that’s not normally what the word is used to describe, what we’re talking about is selling quite generic or well-known brands for a marked up price on your website or eBay.
A simple example might be that I copy a bunch of listings from Amazon and put them on eBay, while adding say ten pounds to the price of everything. Then if someone buys from me on eBay I simply buy the product on Amazon and have it delivered to their address. If you buy a course and how to dropship generally what they’ll tell you to do is create your own website, stock it with generic products, put a mark-up on those and then just try and drive as much traffic as possible to the website.
Again, I don’t really like it as a long-term business model because people are getting more and more savvy. I think gone are the days where you can have different prices all around the internet and people wouldn’t really know how to price compare. I wouldn’t even recommend it as a short-term business. It has got very competitive and is getting harder by the day.
And the final opportunity I am going to talk about, niche websites.
Niche website can be a really high-quality and targeted website. Something you put hundreds of hours into that could be a huge business in the future. But generally, when people talk about niche websites in the online business world that’s not what they mean. What they mean is you just create hundreds of different websites each about one particular topic, such as the best vacuum cleaners.
You create the website quickly and try and get it to rank high on Google for the best vacuum cleaner. Meanwhile, you fill the site with information on vacuum cleaners and place refer-a-friend links (what we call affiliate links) to somewhere like Amazon where a reader can go and buy a vacuum cleaner. You get a small commision for each referral. You then rinse and repeat with another niche.
I’m only really mentioning this one because there’s still a lot of people who talk about it and I get a lot of emails asking about it. Basically, ten years ago when the internet was still fairly new this was quite a big money-maker. It was easyish to get high on Google and there weren’t many websites around about niche topics such as the best vacuum cleaner. Whereas now, there is a million and one websites doing the exact same thing.
If you want to build a website in a niche, you’ve got to really spend a lot a lot of time on it. You can’t just churn out stuff for a hundred different niches all quite similar and hope to make good money. Yes, people do but it’s not good business for someone new to start.
On the other hand, if you do know loads about one particular topic such as vacuum cleaners, maybe you’re a world-class vacuum cleaner technician, then making a really in-depth niche site that’s actually a whole business could be the way forward. But again, creating loads of generic niche websites is not a good plan.
Okay, phew, that was intense. Thank you for sitting through this mammoth post and I hope you you got some inspiration. Any questions ask in the comments.