I was once told that the best time to start a business is in a recession. The reasoning behind it is that the business would get stronger once the recession is over. Essentially you’re starting at the bottom and can only go up from there.
From my experience, this is true.
I’ve started several businesses over my life and have closed several businesses too. Some were better than others too. I (we) still have our real estate business but it’s morphed more from a real estate investing business to a holding company. We’re slowly selling off our properties and transferring those gains into the stock market these days.
My other successful business is/was my consulting company. I moonlighted in Engineering many years ago and over time built up a small set of clientele. It was great side money and it helped me transition to doing it full time when I was in between jobs at times. I also added Data Science consulting into the mix between 2017 and 2018 when I left RapidMiner and before I joined H2O.ai.
So how do you do it?
It’s my observation that the people who succeed in starting a business are the ones that have experience in a particular field. If I were an excavator I wouldn’t start a business in system integration, I would stick to moving dirt.
You need to take stock of what you’ve been doing and see if you can do it better by being on your own. Now if you don’t have experience in a field that you want to start a business in, you’re going to have to spend A LOT of time learning the ropes OR hire people that know the industry.
If you want to go the route of hiring people, you better have deep pockets or startup funding. That’s nice to dream about but the reality is that you won’t get any funding unless it’s from your savings or your family members.
Get experience, then plan.
It’s said that ‘proper planning prevents piss poor performance’ and right they are. You can’t just charge headlong into your chosen field without knowing what the costs were. Do you have an excavating machine if you’re an excavator? If not, where are you going to get one?
Right now, the soft fields (i.e. coding, Internet, consulting, etc) are ridiculously easy break into from a cost standpoint. You just need a good laptop ($2000), a domain name + hosting ($100/year), a phone ($100-$1000), and a place to work. If you’re living at home then cost is probably zero but if you want to rent a desk at WeWork you’re looking at $500/month.
So for less than $10,000 you can get started in your new business. You can even cut that down to $5000 if you have a phone and laptop already, you just upgrade as you go along and if you make money.
Cut Debt Fast⌗
Years ago when I lived in New Mexico I thought about opening a ‘location scouting’ business for photographers. I sat down with an SBA guy that shot my idea full of holes. It was humbling, to say the least. I was not prepared and certainly didn’t do any planning. The one thing he did say to me that stuck with me is leveraging debt to expand. He said that some debt is healthy and will let you buy new equipment and write it off on your taxes.
Leverage debt is such an appealing siren song but it’s deadly, especially nowadays. If your business fails, you have to pay back the debt. If the economy fails (like now in the Covid19 pandemic) you have to pay back your debt. It might be wiser to only grow if you’re making profits and keep your debt very low.
If you do leverage debt, always watch it carefully and cut it down quickly. We live in such a debt-based society that it’s downright frightening. I’ve often thought about writing a blog dedicated to cutting debt because we all fall into its trap. Some of us get out, others do not.
Here’s a list of some great business ideas that you can start with very little money investment, just your attitude and hustle.
Consulting in your current work field. This is how I started a successful engineering side business while working full-time as an engineer. I was working in the transportation field but my side work was not overlapping. My side work consisted of small site development stuff. I had the experience and knew how to navigate the field. All I needed was a mobile phone, a computer, some business cards, a printer, paper, and CAD software. Chances are you already have a mobile phone, computer, printer, and paper. All you need to get is business cards and whatever software (if any) you’ll need to run your side business.
Content Creator. Are you an expert in a given field or have a dedicated fan? Why not write content for a website for some extra money? Anyone can become a content creator, so there will be a lot of competition but a well known and expert content writer is very valuable. Usually you’ll get paid by length of article and your fee will vary from site to site. All you need is your knowledge, a computer with a word processor, and an Internet connection. Very low cost but it is time intensive, you will be doing a lot of research!
SEO Consultant. Everyone wants to rank their blog or site on the top page of Google and being an SEO Consultant to help them will score you big $, but you have to prove it first. Any and everyone calls themselves an SEO Consultant so there will be a lot of competition out there. Some companies will just use Moz to do the SEO work themselves, so you will need to stand out. You need to build up your own blog so that it ranks on the first page for SEO or SEO Consultant, then you can get the jobs and land big deals. All you need is your experience, a laptop, and to always be learning.
Start an Etsy/Ebay Business. I like Ebay for it’s easy of use and ability to find some interesting items. If you make something, you can try to sell it on Ebay. I have friends that make wooden bowls or artwork and if they wanted to, they could list it on Ebay or Etsy. The only downside to this is that Ebay takes a listing and auction fee, so you have to figure that into the price. All you need is the product you’re selling, a camera to take photos of the item(s), a laptop, Internet, and mailing supplies. Also a very low investment but big time commitment.
Pocket Coin Dealer. I wanted to highlight Ebay again because there are a ton of pocket coin dealers on there. What’s a pocket coin dealer? It’s someone that buys and sells coins as a side business. It’s highly likely they don’t have a store and large inventory of coins. Being a professional coin dealer requires a lot of investment capital, so it’s very hard for an average person to break into that business. However, if you have some American Eagles and you bought them when silver was $10/oz and want to flip them now that it’s at $30/oz, then go right ahead! As I’ve written before, the way to make money here is to buy and sell using a spread. If you’re good at reading the metals and coin markets you can buy coins when they’re out of favor, hold, and sell when there is a demand. You just need some investment capital and time. This business can take a long time to make any money at and it’s usually a labor of love.
Make Jewelry For as long as I can remember, I’ve been fascinated by gems, gold, silver, and precious stones. I don’t wear jewelry but after living in New Mexico I got hooked on the beauty of making jewelry. I’ve never made jewelry in my life but it’s something I always wanted to try. So I recently signed up for a course on how to make wire jewelry. It looks really easy to make and if you’re creative, you can probably make some beautiful custom jewelry and sell it on Ebay or Etsy (see item #4 above). The costs for doing this is very small. You just need a few tools and some materials, a laptop, camera (or iPhone), and your Ebay/Etsy site. Of course you’ll need shipping materials but this is a great way for creative types to get started.
Start a Blog My blog is a labor of love because I like to share things with my readers that I’ve learned in Data Science, Life, Blogging, or whatever interests me at the time. I could monetize it and I do in some spots, mostly via Web Monetization and some Affiliate linking, but if you follow my definitive guide on Blogging Yourself to a New Life, you can start your own Blog and possibly generate a living from it.
Why start a business in the first place? For me, it’s about having autonomy over my life. My friend in Utah is perhaps one of the most successful Entrepreneurs I know and he’s started several Engineering businesses and a Restaurant. He always finds a way and is very innovative. The reason he does it? So no one can tell him what to do.
That, to me, is the best answer. I’ve often posted it here or talked about in my video channel that you have a ‘song to sing.’ That song is your life’s song and you should sing it loud and proud. If you work for others then they’re the ones that can tell you how loud to sing or sing at all.
Granted, some people are happy with going to work and collecting a paycheck. They’re ok with being a cog in a machine. I’m not. Maybe that’s why I end up working at Startups. Things are not defined and I can wear many hats and get stuff done.
I’ll leave you with this riff on a Calvin and Hobbes cartoon overlaid with Bill Watterson’s words from a commencement speech. It rings true to this day.