#2: Businesses You Can Start In 2018

Hello and welcome back to another episode of the Lazy Entrepreneur. I am your host, Sam Priestley, and in the last episode we looked at how you take an idea and turn it into a business. Well in case you don’t yet have an idea, in this episode, what I am going to try and do is cover a few of the more popular businesses that people are launching in 2018, and hopefully I will give you a little bit of inspiration that maybe you can then take and turn into your own original idea and then turn into a proper business. Now we’re going to blitz through quite a few different types of businesses and I am going to go very quickly so apologies for that. There is quite a bit of choice out there and I don’t want to delve too much into the nitty gritty of the mechanics about how these different businesses work. 

 

What is the main purpose of this episode? [00:49]

Remember the main purpose of this episode is to give you some inspiration and let you know what’s possible. I am not going to talk about every type of business that you could possibly start. I am going to limit it down a bit to ones that you can do with just yourself, a computer, and an internet connection. That means that there isn’t a big barrier to entry, it’s sort of location independent, you can do it from anywhere, running your business from Africa or USA or here in the UK like me. And also means that you don’t need to have a big staff in order to get going. 

 

So i’ll split these businesses into five different types. 

 

What are the five types of businesses you can start? [01:28]

The first one is a physical product brand. Those are anything that you can really hold in your hand. Something where you end up with a final product that has your branding or that is unique to you. 

The second one is a service-based business. These are ones where you are offering a service to another person or business. Think about anything from accounting to web design to legal help, writing, translating, anything like that. 

The third one is entertainment businesses. These are anything where you’re creating something that is solely for someone else’s entertainment. So i’m talking about stand up comedy, videos, film, i’m talking about novels, video games. 

The fourth one is education based businesses. These are ones where you’re trying to teach someone something that is of use to them. So for instance, this podcast is an education based business. Consider an online course where you teach someone french or perhaps a series of youtube videos going into the formation rise and fall of the roman empire. 

The last type of business we’re going to try and look at is called opportunity based business. Also called arbitrage business. Where you’re really just looking for an opportunity in the marketplace and making money from it. So this is stuff like buying something cheaply in china and reselling it in your country. These aren’t really industry defined subcategories, they’re just something that I’ve come up with to define the types of businesses that you could start. 

 There are advantages, there are pro cons that we’ll stop looking at them a bit more as we get more. 

 

Physical product brands [03:20]

How on earth do you run this sort of business from just your sort of computer? The way to do it is to outsource every step of the process that requires touching or dealing with the physical item. For instance, you can design it on your computer or hire someone to design the project. You can then go and find a factory, somewhere like China or a bit closer to home and you can then find another company to quality check the product and make sure they’re up to your standards. You can then get another company who will organize the shipping for you and take it from wherever it has been made to where you’re going to sell it. You can then use another company to handle your fulfillment, such as Amazon’s fulfillment by Amazon’s systems. Or one of many other hundreds of fulfilment companies. And then you can sell on directly to other businesses or distributors such as physical shops or have your own online store or e-commerce store or use other sites such as Amazon or eBay to sell online. Companies have been building these types of logistic networks for decades probably even centuries, but it’s only really in the last few years that they’ve become both accessible and also popular for people like us to use. Small time one-man or small-team businesses. That is largely because of two businesses, both of which you might well have heard of.

 

What are the two businesses that enable small business ventures to be successful? [04:49]

 One of them is Amazon FBA and the other is Alibaba. Alibaba is an online marketplace touched directly with hundreds of factories around the world, particularly in places like China and India where the cost of producing goods is low, and you can work with them to create your own private label products. And by private label I am talking about anything from just slapping your brand on a generic product that they’re already making to inventing something completely new and designing it with them. Whereas once upon a time you’d either have to travel to these countries to find the factory or you’d have to go to one nearby which needed a really large minimum order. Now you can deal with these small time factories all of which are competing for your business and are willing to create you your first product for just a few hundred pounds. And Amazon FBA 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 whenever an order comes through on Amazon or on our own website, Amazon will process the order, go to the warehouse, pick it out, and then send it out for delivery. Fulfillment networks like this aren’t a new thing, but the ones that don’t have a minimum order or a large monthly fee and have easy web interfaces are few and far between. So by combining these two services, easy to find factories with cheap and small minimum orders, and then easy to use distribution network with low minimum order requirements, it means that small businesses can start and launch their own brands very cheaply and with just one or two people on the team. Both of these services have picked up a bit of a reputation as being, maybe not scamming, but definitely a get-rich-quick scheme. Please do not look at them like that. They are not get-rich-quick schemes, but they are tools that can help you build your brand and scale it. If your brand is rubbish, then it is not going to work no matter how good their distribution system is. You still need to do all the branding, product design, and marketing yourself. 

 

So what do you create. Well the world really is your oyster. Generally I recommend staying away from electronics. Starting with something that doesn’t really have a sell-by date or too many moving parts. 

 

What role does quality play in building your brand? [07:41]

You don’t want it too simple because you want your brand to bring the idea of quality to the product. So it can’t be something like marshmallow sticks where any one marshmallow stick is much the same as the other. People need to associate quality and look at two products that look very similar and don’t really know why one is better than the other, and instead rely on brand and pricing to decide. You want to keep your product not too heavy, otherwise storage and delivery costs will be really high. Don’t go too expensive because the cost of returns or problems with single items will cost you a lot and, and don’t go too big for a similar reason for why not to go too heavy. And also you don’t want to go too cheap because then the fulfillment cost, the delivery will take too large of a portion of the price. For instance, if you’re selling an iphone cable of 5 pounds, you’ll struggle to make money because the delivery alone will cost you 3 or 4 pounds. Further than that, you want to create something that you yourself will use. In particular, if you’ve got any sort of hobby or something you’re quite interested in that is not particularly mainstream. 

 

What are Sam’s own product based businesses? [08:53] 

so for instance for me, two product based businesses that I have at the moment. One is a gin company that I started because I really liked gin and I had an idea for how I could create something a bit different, and the other one is a table tennis company because I am very interested in table tennis and had an idea for something that I could create that would be a bit different. The other advantage to creating something for an interest or hobby that you already have is you probably have an idea for how to market it already. You know people that are interested in it and you know where people who are interested in it hang out. I started this type of business because it is my favorite but it does have one big downside and that is you do need a fair amount of money to start. Maybe not a lot in the grand scheme of things, but still, you do need, I’d say probably a minimum of five thousand pounds. And do not expect to take your money out too quickly. Building a brand takes time. Getting the prototype right, getting your stock made, getting it into the warehouses and then starting to sell. This all takes time, and then what you’ll find is as soon as you start selling and bringing in a profit, you’ll need the profit to invest in more stock and bigger product lines. You’re probably looking at like a year really before you can start paying yourself a salary. If you’re looking for something that will get you out of your job right now, this is not it. But it is something you can start on the side and build up slowly and then 6 months or a year, maybe a year and a half, you should have something that is earning you a different income and is worth something, and from there the sky’s the limit. There is no reason why brands started this way as a one person business cannot grow and scale and become the next APple or the next Nike or the next Adidas. Okay, I think that is enough on physical product businesses. There is a huge amount more to say and in the show notes I’ll link to a few of the articles where I go over it in more depth. But for now that’s a brief overview. You can as a one man band, now in 2018, start your own brand and grow it to be a multinational business. I’ve done it a few times and there are countless examples all over the internet of people doing the same. 

 

Let’s move on to the next one. 

Service based businesses [11:11]

Almost the complete opposite to the first whereas the physical product based business might need a year to a year and a half before you can start taking money out, service based businesses start earning straight away. A few years ago I confused my then girlfriend now wife to quit her job and start a business so that we could go travelling together. What businesses did she start? A service-based business so that she would start earning straight away and could start funding our travels. Perhaps the easiest service based business to start is as a freelancer. That is where you are taking on jobs for other people in something quite niche. Let’s say you are good at website design. You could take on jobs to build a website. If you’re good at SEO, you’ve got a background in marketing, you could start doing marketing jobs for people. Freelancers covers a huge variety of things from writers to translators to lawyers to accountants and often you can get going pretty much immediately. There are quite a few services out there such as freelancer, upwork, peoplepower, that lets you both hire and advertise yourself as a freelancer. Once again, freelancing isn’t a new business model but the internet does make it easier than ever to get started and to find clients. What I really like about this business model is that you can start small with almost no initial investment and then scale up. You can scale up either by taking on more staff or outsourcing some of your works, say you were doing marketing, you can start with just yourself and then as you get more jobs you can start outsourcing parts of it to other marketers or even bring people in house and build your own marketing agency. Or you can also scale up by charging more and more and more. One of my side business is a consultancy. I don’t do much work on it because I don’t really enjoy it but when I did I charged quite a bit of money so that it really is worth my time. And the beauty is that as my consultancy gets more popular and I get more work than I want, I can slowly put my prices up. Change of supply and demand balance until it is a level that I am happy at. So how do you get going with a service based business. Well if you already have an in demand skill and it is quite straightforward, let’s say you’re a certified accountant, then 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 will be very easy for you to start. But let’s say you don’t have any of those skills, what do you do? 

 

How do you freelance without preexisting hard skills? [13:55] 

Well there are also basic things that are always needed. If you’re an english language native speaker, there is always a demand for people that can write fairly legible english language. Or if you don’t have that, there are really basic things such as data entry. But generally, those are the jobs that everyone can do are quite limited in terms of how much they pay. You’re probably better off developing a skill that is in demand. For instance, in 2017, life coaching has become quite trendy. A lot of people trained as life coaches and maybe spent a few months and went to one or two courses, got a qualification and started offering their services and getting clients. For years, programming has been quite popular and people would take courses online, or more niche stuff such as wordpress implementation. Installing wordpress sites for new bloggers. What skills do you have that you can use and sell on as a freelancer? Or, what skills do you think are you going to be in demand soon? One of the great things about the internet at the moment is that information is very easy to acquire. You no longer need to go to a very expensive university to learn a course. Now a lot of universities are putting their material online for free, and even if there’s not there’s often alternative ways to learn these once quite elitist subjects. So I’ve spoken a bit about the advantages of doing a service based business, let me talk a bit about the disadvantages. 

 

What are the disadvantages of a service based business? [15:48] 

These are more difficult to scale your business independently of you. Your personality and skill set are often tied to whatever it is you do. The brand Adidas, it doesn’t matter who is controlling it at the time, it is still a powerful brand and worth something. Whereas my Sam Priestly consulting, no one else can do that. I need to be there and putting in the hours and exchanging my time for money. Yes, it is possible to bill an agency and have it independent of yourself and then sell it on, but it is much more difficult. The other disadvantage is that because it is so easy to get into, there is so much competition already out there. This in turn, drives the price down and means that what might be quite a valuable skill once upon a time you can now get quite cheaply. If you try and market yourself as the cheapest in field, you’re going to fail. There is always someone willing to do it for less money than you. Instead, you need to narrow it down, find a niche, and scale up. Okay, enough for service based businesses. Let’s move on to the next type, entertainment based businesses. 

 

Entertainment based businesses [16:58]

This is something I don’t know that much about as I’ve never built one myself. You see them all the time from instagram celebs to youtubers to trick streamers to stand up comedians to video game developers. There is a whole industry that is built off the back of providing content for other people’s entertainment, and nowadays you don’t need to have a publisher or literary agent to say that you’re good enough to publish your own novel. And you don’t need a big movie studio in order to okay your idea and produce a movie. Nowadays you can do it yourself and publish the content yourself, and if people like it they will sign up and support you. If you are an artist, or you have great ideas for movies or you have always wanted to create some form of entertainment, now is the best time ever in the history of humanity for you do it. People are quite willing to support new ideas and projects, with websites like Patreon where people can give you monthly donations in order to help you produce your art. Brands are paying a lot of money for youtube stars and instagram celebrities to promote their products. And there’s obviously the standard advertising network built into places like youtube which will pay money directly to the content creator without having to go through loads of different agents. People keep telling me that the age of youtube and the soundcloud rapper are over, and those things are now too competitive. I really disagree. I think that those entertainment mediums are just becoming more and more popular and we’re going to see the next generation of netflix original series and big money investment will be going towards youtube creators and independent producers. It is really hard to compare this type of business to the other two because it depends so much on the quality and the production value of whatever it 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 than you could really make it big. On the other hand, you might not be very good, but I try my hand writing novels. I wrote a quick one which I published on Amazon, and yeah it is not a talent that I have. Maybe one day I will work on something as a passion project, but I know that for me it is never going to a viable income stream or business. But it does bring me on to our next type of business. Which uses pretty much all the same mediums as an entertainment type business, but isn’t so dependent on you being interesting or creative or popular, and that is an education based business. 

 

Education based businesses [20:00]

As you can tell from this podcast, I am not trying to be as entertaining as possible and really if I was trying to make a comedy podcast, I would fall flat on my face and fail. What I do have is quite a lot of knowledge on a few subjects which a lot of people find helpful and interesting. The plan is that people will find the content of this podcast useful enough that they can get over the sort of dullness of my voice. Or the low production quality of my microphone and audio editing skills. We’ve mentioned a load of different mediums already, youtube, podcasting, there’s also many other ways to get your content out there, such as blogging, like my website at sampriestly.com or creating your own courses that people pay for, or creating webinars, that are live, lecture style but with audience interaction, and even setting up conferences and in person lectures around the world. If you’re an expert in something this is obviously kind of an obvious and straightforward business for you to try out. Let’s say you’re really good at the piano. You are a world class pianist. You’ll probably find that there’s quite a big market of people that would like to learn directly from you. Either on skype, or from people recording their music and then sending it to you, or a live audiene that people coudl learn from you on youtube or a paid course. But then again, maybe not because there are already a lot of pianists out there. Maybe the thing you’re best at is piano, there might be something else that you’re almost as good at that isn’t quite as competitive. 

 

What two ways can you go when starting this type of business? [21:55] 

One is try to find one customer at a time and sell to them directly. You can look at freelancing websites for instance or try and find an agency that puts piano teachers together with students, and then start there and then slowly build your business from there and so the add on more things such as youtube videos and do paid courses or self-publish book and start showing the same things to the audience. Or you can approach it from the other side. You can start creating content and then hope that people will come across it and you’d build an audience that way. For instance, I make a pretty good income from my blog, but I built that by just putting out all my info for free, slowly creating more and more content, 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 maybe a year and a half before it was paying a full time income. And I think that is pretty quick. Whereas if you approach from the other direction ,you can start earning straight away, all you need to do is find one client and earn a bit of money from them, find another client, and then build up from there. And then scale it by introducing all the other mediums that can be accessed by sort of an unlimited number of people. Alright, let’s move on to the fifth and final category. 

 

Opportunity based businesses [23:30]

I would get loads of questions, what about dropshipping, or retail arbitrage, or matched betting? All the other buzzwords that you see plastered across Facebook promoted by all of the gurus. So let’s touch on this briefly. By opportunity based business, what I mean is basically any money that you would make from market inefficiency. Let’s talk about retail arbitrage as an example. So retail arbitrage is when you find something in a shop that you can sell for more online. So there are a few apps that you can put in the show notes where you can go and wander around your local supermarket, scan each item, and it will compare prices and then give you an idea of how much money you’d make if you’d buy it and then send it off to an Amazon FBA warehouse. A very simple business model that makes its money by finding inefficiencies in the market. The inefficiency is the price it goes for locally versus the price it goes for online. This is retail arbitrage, and people do make good money from it and this is an arbitrage opportunity and the more competitive it gets, slowly it is going to get harder until really there is not difference between the price you can get things on a shop and the price you can sell it for online. Because of that I don’t really recommend it as a long term business. But it doesn’t mean that it is not worth doing. One of the advantages of it is that you can start straight away with just a hundred pounds or so and instantly learning how Amazon works and how Amazon FBA works. You can use it to build up and launch a different type of business. For instance, you can do it a bit of retail arbitrage using Amazon and Amazon FBA, get used to it and how everything works, get your account in good standing and then go and launch your own brand using Amazon FBA. The same principle really applies to all of these businesses that I am going to talk about that come under the opportunity based business. 

 

They’re normally either short term as in it is an opportunity that is getting tighter and tighter and more competitive or it has quite a low cap to how much money can be made. And because of this you should go into it knowing it is not going to last forever or make you a millionaire. Much better would be to use them to earn a bit of cash flow to build into a more sustainable and scalable and longer term. SO this is any of the other four categories that we have already talked about. 

 

Okay let’s talk about a few of these opportunities. So we have spoken about retail arbitrage. Another one is matched betting. This is when you take advantage of a sign up offer that somewhere like a casino or book maker gives you, and then you extract as much value as you can from that offer and keep it. Matched betting exists because bookies are in competition with each other and they’re trying to attract customers so that they give you free money in the beginning so that you will stick around and use them long into the computer. SO the opportunities lies in just signing up to every bookmaker out there, taking advantage of the offer and then never laying there again. I started matched betting 10 years ago and back then it wasn’t well known and there wasn’t a lot of opportunity and I made quite a lot of money from it. But now it is pretty well understood and matured. You can still make money out of it but it is pretty limited per person. You can probably expect to make a fairly straight forward 2,000 pounds and after that you have to work really hard to make any more or either give in and move onto something else. 

 

Does Sam recommend matched betting? [27:44]

Do I recommend matched betting? Yes I do if you’re trying to generate cash flow in order to do something. Or just need a bit of extra beer money on the side. I do not recommend it as a long term business. Another opportunity is dropshipping. Dropshipping can mean a whole bunch of things. 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, they buy a product, but you don’t actually have the product or own it, when they place the order to you, you then send that order on to the actual manufacturer of the product, and then they deliver it to the customer. Now this business model can be used very effectively to build your own brand if the company you’re working with doing the actual dropshipping is able to make your own unique branded items. But that is not normally what we’re talking about here. What we’re talking about is generally selling quite generic or well known brands but having it on your website or on a medium where it is more expensive than elsewhere. A simple example might be that I copy a bunch of listings on Amazon and put them over to Ebay and just add say 10 pounds to the price of everything. Then if someone buys something from me on ebay, I go to Amazon, buy the product, and put in that persons delivery address. I put in the difference between what it is going for on on ebay and what it is going for on Amazon. Generally, dropshipping courses tell you to create your own website, stock up on product, and drive as much traffic as possible to your own 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 when you can have different prices all over the internet and people wouldn’t know how to really price compare. Whereas now as soon as they look at your website they’ll see who’s cheaper through a price compare. Dropshipping does work and does have the advantage of not needing really any initial investment to start up, because you don’t hold any stock. You just sort of parse all this straight on. But it is very competitive now, it is quite difficult to earn money and it is getting harder by the day. The final opportunity I am going to talk about are niche websites. A niche website could be a really high quality targeted website that could be a huge website in the future. Generally when people talk about niche websites in the online business world, that is not what they mean. It is just a website about a particular topic, such as the best vacuum cleaners. You create a website, try and get it to rank high on google for the best vacuum cleaners, you fill it with generic info about vacuum cleaners, and then you put on a refer a friend or affiliate links to amazon or online shop and then you will get paid a commission in exchange. I am only mentioning this one because there are still a lot of people who talk about it and I am still getting a lot of people who ask about it. When the internet was still fairly new this was still a big money maker and it was still easier to get higher on google, and there were not many websites about niche topics, whereas now there are a million and one websites doing this same thing. If you want to build a website in this niche, you need to build a lot of time on it, you cannot just churn out stuff for 100 different niches and hope to make good money. Yes, people do, but it’s not good for a beginner starting out. 

 

On the other hand, on the education side, if you do know a lot about one particular start up, such as tae kwon do or vacuum cleaners, then going to one indexed niche site that is actually your whole business could be the way forward. But then again, creating loads of generic niche websites is not a good plan. 

Okay everyone, thanks for sticking with me as we blitz through all these different types of businesses. I am going to start putting links to more information about each one. I have quite a lot of blog posts and there are quite a lot of other very good resources out there on the net so that if anything took your interest or there’s an opportunity, or if there’s inspiration you’ve taken, then go and do further research and as I said in the first episode, yeah just get it going. Get started. I’ll also try and do more podcasts talking about the nitty gritty of the different business, so expect to see them over the next few days or weeks or whenever I get around to it. You can contact me at hello@sampriestly.com.