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What makes a good business vs a bad business? Some of us waste years if not decades building the wrong business.
Things I wish I knew before I blew years building the wrong business-
* Focus on starting businesses that have repeat customers. Don’t build a business that starts from zero each month!
* Focus on businesses with good margins and controlled overhead.
* Build a business with high barrier to entry. If someone can come steal your lunch in 2 weeks and a couple grand set up you are in trouble.
* Time detachment, the ability to have a system or process to enable this to run without you. Human resource systems are the hardest.
Bad business-
* Highly commoditized
* Low margins
* Hard to scale
* The business starts from zero each month.
* Low barrier to entry. Aka no moat.
Examples of good businesses I’ve thought of-
* Insurance Brokerages. Repeat clients, medium barrier to entry, good margins and ready to buy now. Downside is it is somewhat commoditized.
* Social media marketing agency. Repeat clients, high margins. Downside is it’s highly saturated, low barrier to entry and ultimately a human resource system so hard to scale.
*House flipping - high barrier to entry, high profit margins, downside hard to scale and no repeat clients. You start from zero each month.
* Online courses- High margins, Very scaleable if you have traffic. Downside no repeat clients and you start from zero each month.
Bad businesses-
Real estate agency’s- Low margins if you have a brokerage and not showing homes, hard to scale as most agents fail and it’s constant recruiting to get new people in. No repeat clients, starts at zero each month. Also highly unstable based on market conditions.
Restaurants- Low margins, inventory is consistently on the verge of going bad. High overhead, tough to scale.
Let’s open it up for discussion. What businesses ideas/ models do you love and do you hate?
Things I wish I knew before I blew years building the wrong business-
* Focus on starting businesses that have repeat customers. Don’t build a business that starts from zero each month!
* Focus on businesses with good margins and controlled overhead.
* Build a business with high barrier to entry. If someone can come steal your lunch in 2 weeks and a couple grand set up you are in trouble.
* Time detachment, the ability to have a system or process to enable this to run without you. Human resource systems are the hardest.
Bad business-
* Highly commoditized
* Low margins
* Hard to scale
* The business starts from zero each month.
* Low barrier to entry. Aka no moat.
Examples of good businesses I’ve thought of-
* Insurance Brokerages. Repeat clients, medium barrier to entry, good margins and ready to buy now. Downside is it is somewhat commoditized.
* Social media marketing agency. Repeat clients, high margins. Downside is it’s highly saturated, low barrier to entry and ultimately a human resource system so hard to scale.
*House flipping - high barrier to entry, high profit margins, downside hard to scale and no repeat clients. You start from zero each month.
* Online courses- High margins, Very scaleable if you have traffic. Downside no repeat clients and you start from zero each month.
Bad businesses-
Real estate agency’s- Low margins if you have a brokerage and not showing homes, hard to scale as most agents fail and it’s constant recruiting to get new people in. No repeat clients, starts at zero each month. Also highly unstable based on market conditions.
Restaurants- Low margins, inventory is consistently on the verge of going bad. High overhead, tough to scale.
Let’s open it up for discussion. What businesses ideas/ models do you love and do you hate?
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