This is a query from a reader in the Midwest:
“Can you tell me the simplest business to start?” I’ve always wanted to start my own company. I don’t have a lot of money and no expertise in business. But I genuinely want to take control of my own destiny, and I believe that establishing a business is the greatest way to do it. What type of company should I start?” — Iowa resident J.L.
That’s a fantastic question. A service business is the simplest to establish, especially for a newbie.
A service business is any type of company that sells services. In other words, instead of selling stuff or goods, you offer your ability, labor, or knowledge. The following are some examples of service businesses:
- You decide to work as a consultant and offer your knowledge.
- You offer homeowners a service such as house cleaning or painting.
- Alternatively, you might sell services such as website design, social media marketing, or virtual assistant services to other businesses online.
You might be wondering how this differs from working for someone else. It’s a whole different situation. Unlike working as an employee, you get to make the decisions. You have the upper hand. You’re also constructing a long-term asset — your company.
Why do you want to start a service company? Simple. A service firm may be started and run by almost anybody. Everyone possesses some information or skill that others are willing to pay for. A service firm makes sense for a variety of financial and strategic reasons.
5 Reasons Why Starting a Service Business Is the Easiest
Here are five reasons why starting a service business is the easiest, especially for new entrepreneurs:
1. Doesn’t need a large sum of money to get started.
Many service enterprises may be launched with little or no capital. After all, you won’t have to pay for office space at first because you’ll be working from home. You are not required to create a product. There is no need to invest in a production, warehouse, or inventory.
You don’t have to spend money on recruiting people. The majority of service firms begin as sole proprietorships. You can employ aid later, but it isn’t necessary at first.
In reality, your costs may be as low as a pack of business cards, a few brochures, or a website.
Some entrepreneurs don’t even have to pay for these costs. Some entrepreneurs choose to sell their services through internet marketplaces. Typically, such services allow you to start with a free profile.
2. Is It Easy to Get Started?
Because you don’t need to do any planning ahead of time, a service business is the quickest to start. You can get your company up and running straight away. It is one of the easiest companies to establish because of the quickness.
- Consumer service business: If you want to establish a consumer service business in your community, you may start by spreading the word. Talk to individuals or pass out fliers as you walk about. Create a free account on sites like HomeAdvisor.com. Alternatively, join a site like Nextdoor and alert your neighbors when they want assistance (be helpful but not overly promotional or your efforts will backfire). Remember to create a Google My Business page.
- Consultancy or services for other firms: Create a LinkedIn profile if you want to do consulting or provide services to other organizations. Consider joining LinkedIn ProFinder. Also, have a look at Fiverr, Freelancer.com, and Upwork, which are all freelancing markets. These marketplaces might be a terrific way to get your business off the ground. At start, you don’t even need your own website.
Finding the correct markets and referral sites is crucial for every service firm.
When you have your first or a few clients, ask them to post an online review or suggestion. This will hasten your progress.
3. Quickly generates cash
Businesses that provide services bring money in quickly. In most circumstances, you will get paid within a few days or weeks of completing the work, if not immediately.
When compared to other sorts of enterprises, this is a significant difference. Other forms of enterprises, on the other hand, might take a long time to pay off. For example, if you’re starting a software company, you may need to spend months or years building a product, promoting it, and collecting payments. You must first invest in a location to sell your things and purchase inventory to sell when starting a retail or ecommerce business. You’ll need to combine raw materials and have a facility or other location to make your items if you’re in the manufacturing company. All of this necessitates the expenditure of both time and money.
However, none of these are necessary in a service firm.
Simply execute the assignment and you will get compensated. Rinse and repeat as needed.
It’s simple and straightforward! It’s easy to see why a service business is the simplest to start.
Of course, you may decide to upgrade your equipment, build an office, recruit people, construct a cutting-edge website, or launch a marketing campaign over time. But all of that will come later. Remember that you can get by without such costs at first.
4. Provides a High Profit Margin
Small firms with service enterprises have some of the greatest profit margins.
Also see: Stop Fundraising and Start Growing Your Company.
This is due to the low overhead. To run a small service firm, you don’t need a lot of infrastructure or inventory.
As a consequence, more of your hard-earned money ends up in your bank account. You don’t have a lot of outgoings.
As a result, companies like web design firms are among the most profitable. Almost all of the firms on this list of the most lucrative small businesses are service enterprises.
5. It is possible to begin on the side.
While working or in school, you can start a service business on the side.
This is a technique to gradually create a business for folks who are presently working and are not ready to break connections with a consistent wage. While moonlighting at a part-time business, you keep your financial risk minimal.
What if, on the other hand, your ultimate objective is to build a product? Starting a service business is still a wonderful way to get started. Several products have been developed by service providers that have seen a need. Basecamp, for example, is a project management tool that developed out of a web design company.
In other words, while you’re preparing a product for market, a service business will pay the bills. Additionally, because you’re currently in that market, your brand familiarity and reputation may aid in the product’s introduction.
Last but not least, unless you have a wonderful company concept burning a hole in your head, we recommend starting a service business as your first venture. It is the simplest business to begin. You’ll receive significant experience in the commercial world. You’ll discover how to keep clients happy. You could even come up with a product to make as a result of the procedure. Meanwhile, you’re making money and, if you want, you may put money aside to start a different type of business later.