At least once a week, I get a message from someone looking for guidance on what business they should venture into. Be it an old colleague/report or a connection from a few years ago in between projects; I’m always excited to advise on what I’ve seen working lately (hint; it’s not Amazon FBA, SMMA, or Dropshipping).
Before I go into it, I want to address why it’s not any of the for-mentioned things. They all worked at one point, but you have what’s called the first mover’s advantage with any opportunity. Eventually, as more and more people get into any industry/opportunity, it becomes saturated. This may take years, but at a certain point, it’s bound to happen.
One last thing — I’m not guaranteeing any of these will work, and they all involve a certain amount of risk. Some of these I’ve done myself (or they’ve been a piece of a business I ran), and some I’ve just seen work for other folks. This is meant to be a very rudimentary level to point you in the right direction, not to give you everything you need to know about any of these models.
1) Buying companies
I’ve always been attracted to this model but have never had the time to commit to it. You buy a company (or two, or five, or 10) and either hold it in a portfolio or flip it. If you’re starting with this model, I’d look for a company with a few of these factors;
- Low multiple – 1-2.5x would be an excellent sweet spot.
- Consistent revenue – Stay away from a company with most revenue in Q4 or a company that relies heavily on flakey outside factors.
- High but reasonable profit margins – 50 to 80% is a good range.
- In an industry, you understand
- Has to room for improvement & growth
I would use a tool like Flippa when starting, and eventually, you can find great deals elsewhere. Recently I had the opportunity to connect with Nathan Sykes who’s entire model is private equity – I’d check out his Hey World to learn more about the model, in addition to watching some YouTube videos and grabbing some books.
This is a model that has become relatively mainstream over the past year or so. The idea behind a drop-servicing company is that you take an in-demand service – say a whiteboard video – find a freelancer to create it, mark it up, and offer it as a standalone service. Then, on the backend, your goal would be to offer similar services as upsells or get them on a continuity plan.
A few things to keep in mind with this model;
- It’s always easiest to sell to warm traffic – rather than using interruption-based marketing at first, use Pay Per Click advertising.
- If possible, niche down – you can always expand your target audience later.
- Don’t work with freelancers long-term – with freelancers, you are essentially working as a project manager and ensuring quality control – that’s your only competitive advantage. With enough scale, bring things in-house – this will help with profit margins, quality control, and consistency.
- Use a tool like Service Provider Pro to take orders, manage clients, and more.
- Use a tool like Clickfunnels for your marketing.
- Offer one product on the frontend – don’t try to do too much.
- Pick a service that’s not too saturated that a customer may want every month, quarter, etc. (the goal here is to build continuity)
Another method of drop-servicing is white-labeling services from somewhere like The Hoth. I won’t go too far into this, but it can be a great option, especially if you want to be more hands-off.
This seems to be the model that surprises people the most. Believe it or not, entire websites are dedicated to providing pre-created content that you can Whitelabel and sell as your own (and no, you can’t sell it on Amazon/Kindle). There are essentially three different ways you could use this content — the first is by offering it as a lead magnet; if you have another product or an affiliate marketing offer to promote, this could be a great strategy. The second is bundling it with other products/services to make the offer more enticing. And the third, and probably most obvious, is by just selling it on a platform such as Shopify, ClickFunnels, or Clickbank. I’d check out Lenny Banks for more about this model.
4) Flipping Instagram Accounts
This is by far the sketchiest and probably one of the most saturated opportunities on the list. I’ve tried to mess around with this twice – once I lucked out big time, and another, I got the run-around by the seller. But I’ve seen it work for many people, so I figured I’d include it.
Here’s the model – you buy an active Instagram account within a specific niche. You could either run it for a few months and then sell it or flip it right away. Typically, you can find Telegram groups to buy accounts in, and then you could either try to sell it in another Telegram group or on a site such as Insta Sale.
I’m by no means an expert on this, so seek professional advice (aka. YouTube videos or a $10 Udemey course) before doing this. A few things I do know you should be careful with when doing this;
- Always use a Middle Man – this person will facilitate the transaction and ensure you don’t get ripped off. Hire this person yourself rather than relying on the other party.
- If you are buying with PayPal, buy it as a service rather than friends and family – won’t let the seller talk you out of this.
- When transferring ownership, make sure you don’t get locked out of accounts due to IP differences & that the original email address used to make the account is included in the sale.
- Don’t buy accounts with less than 10,000 followers.
- Verify engagement – ensure followers aren’t bots and are from 1st world countries.
5) White-labeling software
This has got to be one of my favorite’s on the list. Most of the time, when I do this, I’m either using the tool internally or bundling it with another offer, but I’ve seen people sell software they’ve white-labeled independently.
This is when you use a marketplace like CodeCanyon to find a pre-built software, pay for it once, set it up on your hosting, hire a developer to make changes (if any), and then sell it. It’s not effortless, but with some hard work, you can get something going.
I’ve bought a variety of software (you could say I’m addicted) – I’ll share a handful of things I’ve snagged;
- Status Page Maker (similar to statuspage.io) – $69 for full resale rights
- Email Marketing Tool/Autoresponder (similar to Drip or Mailchimp) – $245 for full resale rights
- Website Maker (similar to Squarespace or Wix) – $195 for full resale rights
- Customer Support Helpdesk (similar to Helpscout or Zendesk) – $325 for full resale rights
- Project Manager (similar to Clickup) – $95 for full resale rights
- CRM (similar to Pipedrive) – $200 for full resale rights
As you can see, if you messed with any of the demos, these are all great pieces of software. Here’s my advice to you — if you are going to go down this route, do one of three things;
- Niche down – Rather than trying to be the best website maker, become the website maker used by every small business owner used in your town of 20,000 or every salon owner. This would also allow you to promote specific products, including affiliate offers, on the backend.
- Compete on price – Yup, I said it. I believe that 90% of the time, this is a horrible idea, but the fact is that your feature sets of a software you just bought for a hundred bucks aren’t going to compete with that of a company that spends millions every year on product teams. That’s ok – some companies thrive off this. In general, one doesn’t use Crisp because they love the feature set — they use it because they can’t afford Intercom.
- Bundle it with another offer – I know, I know, I keep saying this. But you may be able to combine multiple of these business models OR create an original product to bundle it with.
If you don’t go down one of those three paths, you’ll have to make a lot of noise – a significant endorsement, an exciting marketing stunt, or a new feature not offered by a competitor. Even if your numbers work out at first, I guarantee your churn will be higher than competitors who spend millions on R&D.
I hope at least one of these models interests you. I’d encourage you to do more research of your own on them. Let me know how they work out!
Yes, the link for Lenny Banks is an affiliate link – it’s not common I promote courses, and his course is exceptional. If you don’t get value out of it, he has a 14-day refund policy (I guarantee you his team will take good care of you, but if they don’t, email me personally, and I’ll make sure it’s sorted out). If you can’t afford his course, please don’t buy it — learn for free or with a Udemey course instead. The links for Service Provider Pro and Clickfunnels are affiliate links as well.