Deciding What Kind of Business You Should Start

Warren Buffett knows a thing or two about making money. His advice? Focus on businesses with high profit margins. This totally fits with the Feel Good Business Model, which is about building a business that not only makes money (at a higher profit margin) but also makes you happy in the process.

A profit margin= [(Revenue-Cost)/Revenue] x 100. Profit margins between 50-70% are typically considered “good”.

Let's check out some examples of some different business ventures you can start:

1. Product-Based Businesses:

Some Examples: E-Commerce, Subscription Boxes, Crafts, Drop Shipping Goods.

For this type of business, think selling physical products. NYU Stern School of Business reports an average of around 41.54% profit margin.

To crush it in this space, you gotta:

1. spend money and pre-sell products to test interest and fund operations.

2. sell directly to customers to maximize profits (buying wholesale and selling is a much lower margin) and

3. build your brand so peeps trust you.
   There is a lot of work that goes into building a product-based business and the actual marketing can be veryyyy expensive. I know many people online make it look so easy and wonderful, however it can be a tiring uphill battle at times, with lots of hidden (and up front) expenses.

My thoughts: The idea of selling products has always interested me, however I have never personally gone down this path because of the time, money, energy and margins it takes to really see a nice profit. They have made it so easy these days to start your own store, heck you can even drop ship plants now and have your own plant store (and never have to deal with shipping), however remember that you need to have a large marketing budget and brand awareness to really drive the sales home.

2. Agency-Based Business:

Some Examples: Digital Marketing Agencies, Graphic Design Agencies, Content Marketing Agencies, Video Production Agencies.

For this business, you are taking a skill you have and you are marketing it as a service. Profit margins can vary quite a bit but the goal is to hit at least 50%, more if you are not using a team. Productizing your services and focusing on recurring revenue helps replace the boring billable hours model with something more sustainable. Some tips in this business are:

1. Focus on recurring revenue- sell a service that you can offer on a recurring basis (like a monthly retainer or subscription) that way you are getting paid consistently.

2. Scale with systems- replace yourself and document your processes. This way you can hire a team to do the work for you and you can scale, by growing your team and opening up more availability to take on additional clients.

3. FOCUS on delivering results- sometimes focusing on ONE core service (what it is that you offer) for a while is key, not only to help people understand what you are known for and how you can help, but also so that you can fine tune and deliver the best value and results. Once you get the ball rolling you can branch out as needed.

4. NICHE down- I know you have heard it time and time again…. but decide WHO you are best able to help and deliver the best results for. It will make EVERYTHING easier- from creating content, to growing and generating leads.

My thoughts: As an agency owner (BYOB Agency) myself, I learned a lot throughout the years. One, it is very important to hone in on specific services and things you offer. When I first started out, I was a jack of all trades. I was helping people create websites, doing social media, writing blogs, business consulting, running facebook ads and more. My head was spinning… I was trading time for dollars. This was driving me nuts. The actual workload was inconsistent and there was a lot of stopping and starting projects, which made it so cash flow was not predictable. It was also harder to market “all” my services, because it tended to get a little confusing for people what I actually did and who I helped.

After throwing spaghetti at the wall like this for a year, I decided to really narrow in on something I enjoyed doing and knew that I could create a recurring service around. This is when we became a content repurposing agency. It is a very simple model, we take content that our clients have created and we repurpose it into multiple pieces of content and we schedule it. This is sooo much better than having to do a ton of different things and it is very clear what we do and what our deliverables are.

Additionally, I was able to really map out the systems and processes in the agency, so that I could transition into hiring a small team to help with creating graphics, copy and with scheduling. I love this model personally, because I can decide to scale and grow this business as much or as little as I want. I can do the work myself for a higher margin or I can hire a team to help. I like that I get to work with the clients that I want to work with and by focusing on a specific niche, such as insurance brokers helps us create and support our clients in the industry in the best way possible.

Some exciting things I am planning for our agency in the future: I would like to really focus on helping more non-profit businesses who struggle to create content and get their mission out there into the world.

3. Coaching-Based Business:

Some examples: Mindset Coaching, Career Coaching, Executive Coaching, Business Coaching, Health and Wellness Coaching, Financial Coaching, Relationship Coaching, Performance Coaching, Spiritual Coaching, Parenting Coaching.

This business model, can have a very high profit margin, depending on how you structure your services, think around 60-70%, even 80% profit margin. Pretty darn good, huh? This type of business is when you learn to sell your expertise. You are building a business around you being an expert and helping others. Making money while helping others grow? Now that feels good.

Some tips for this type:

1. Build Your Personal Brand- you will need to put yourself out there as a thought leader, share your expertise, knowledge and tips. This is so that your ideal clients can see all that you can offer and help them with. If you don’t put yourself out there, no one will know what you do.

2. Define your ideal client and niche. Narrow down on who you are helping, so you don’t get lost in the sea of “trying to help everyone”.

3. Build a Community- it is super important to build a community, to build an audience of people who want to learn from you and hire you for implementation.

4. Grow Through the Phases- there are several phases of being a coach. I think it’s so important to put the work in, coach one on one and work with people, so that you have experience and validation of helping others. As you grow and are confident in the coaching you do, you can start to create additional things in your business that don’t require YOU. For example you can create courses, memberships, and more.

My thoughts: Coaching and consulting is an extremely rewarding business venture. Being able to help others achieve what they set out to do is amazing. I will always be a lifelong learner and I really enjoy staying up to date on all things when it comes to growing online businesses and digital marketing. The fact that I get to help and teach others, by sharing what I know is wonderful.

There is a big difference between coaching and consulting though. I’m a bit of a hybrid. It is all about the approach. A coach is knowledgeable in an area and asks great questions to help their clients discover the answers and solutions they are seeking. Coaches do not give you all the answers, they reach out their hand and guide you along. Coaches are focused on helping you with personal or professional development with an emphasis on empowering others. Consultants on the other hand provide expert knowledge in a particular field, they provide advice, strategy and solutions. Often times consultants will have a project based assignment and dig deep to provide actionable solutions in their area of expertise.

Let’s get real for a second: According to Julia McCoy, Creator of Content Hacker, 82% of coaches fail within the first two years. It takes a lot of energy and effort when starting your coaching practice. This is because you will need to put yourself out there and build a community of people who are excited to learn from you. I often tell people, that it is like a snowball. At first your biggest goal is to get your first client. From there, you get them amazing results and acquire testimonials. You pick up more clients and rinse and repeat. As you keep delivering amazing results, you share these wins and often times your clients will be so happy they will want to recommend you to others. A few referral partners can be a game changer in your business and your coaching practice can grow quickly. Eventually you will be able to decide how much or little you want to scale your business and start to develop products to help remove you from the one on one coaching itself (such as courses and programs).

In conclusion, these are just a few of the different types of businesses you can start. It really comes down to what business you would enjoy running the most :-) In our new book, “The Feel Good Business Model” we teach you how to start a business that gives you fun, time freedom and flexibility. If you’d like to learn more, join the waitlist here: https://www.thetimetogrow.com/FeelGoodBusiness