MBA1649 3 Low-Risk Businesses You Can Start Today

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Visit Dell.com deals. Hey O. Welcome to the $100 MBA Show. Business Simplified every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the Hundred Dollar mba, a company business training and community online. And in today's episode you will learn three low risk businesses you can start today. One of the biggest reasons why many people don't start a business is because they're risk averse. They're worried that they'll lose their life savings. It's a valid concern. So I want to share with you three businesses that you can start. Three business models that lower risk tremendously and allow you to start your first business without feeling that anxiety of man. What if this all goes wrong? What if I can't do this? What if I screw this up? Will I lose all my money? Well with these business models the likelihood of that is super, super low. So let's get into it. Let's get down to business. Many people believe that running a business is just risky by nature. There's nothing you can do about it. And there is some truth in that. But you can manage risk and you can pick types of businesses that have lower risk than others. First of all, I want to say that when it comes to risk, there's no such thing as a risk free business. Why? Because you're not just risking money because you can lower the risk when it comes financially, what you're risking. But with all businesses, you will risk your time. You'll invest your time, your effort, your energy into something with the hopes that it's going to pay off. But sometimes it won't. And that's a risk you just have to be willing to take and see it as an opportunity to learn, an opportunity to become a better entrepreneur. But we could definitely lower the risk when it comes to the finances. So let's start with the first type of business that is really minimal risk. And actually this is one of the first businesses I started, and that's an arbitrage business. An arbitrage business is basically you selling a product or service without having to create that product or service. Let me explain. One of my first online businesses was I had an ebay store where I sold rare Air Jordan sneakers. This is the first time I was dipping my toe into online business. Now, did I buy a whole bunch of Air Jordan sneakers and just sell them on ebay? No. What I did was arbitrage. I would find Air Jordans that I thought would sell that were rare, that had interesting colorways that were for sale somewhere else, and then I would sell them on my store for a profit. So say, for example, I found a pair of air Jordans for $200 and they're in great condition and they're a popular size. And I was like, okay, this pair of sneakers is really, really difficult to find. And for the right buyer, they're going to be willing to pay for it. So then I would take the images and everything from that other place, the description, everything I knew about that product, I would then post it on my store for a marked up price. So let's say $250. And I would be able to sell those sneakers because I was part of forums and different groups online when it came to rare sneakers or basketball. And they knew that I could find really good sneakers. So they're always asking me, hey, what do you got these days? Do you have anything new? And I would show them the sneakers that I found and guess what? They would pay me the 250. And then after I had the 250 in my bank account, I would go ahead and buy those sneakers from the store that I saw them originally and just send them directly to the buyer. And of course I would pocket the difference. That's what arbitrage is. And you could do this all day long. There is a huge marketplace for this when it comes to Amazon. People sell Amazon products on their Amazon store and they don't have those products in stock. They actually just buy them from Alibaba, which is a cheaper wholesaler, and send it directly to the consumer and pocket the difference. And this works for services as well. If you have an email list, if you are a marketer, then you know there are some services your list would want to avail. Let's say, for example, they want some Facebook marketing. They want somebody to create their logo, they want somebody to design their website. If you have a relationship with some of these people that provide these services, Facebook marketing or website development, or you create a relationship where you just go out and find freelancers that know how to do this, you charge a premium, and then you go ahead and tell the freelancer, go ahead and do this job, I found you a job. And you get obviously the difference. Arbitrage business model number two, affiliate marketing. Affiliate marketing is similar to Arbitrage, but different in the way that, hey, the product already exists. And all you're doing is that you're recommending this product and getting an affiliate commission when somebody buys that product with your affiliate link. This works if you love content, if you love your blog, you love doing YouTube videos. There's entire businesses that make seven and eight figures just on affiliate marketing. And the reason it works is because people trust their opinions. One of the niches that are very popular is WordPress. People that are into WordPress websites, they teach techniques on how to develop WordPress websites. They do reviews on products when it comes to plugins and softwares and themes and hosting, and they obviously get a kickback. They get an affiliate commission on all those types of products. And when they review them and they're honest reviews and those commissions add up, especially when you add up all the different kinds of things you'll need in order for you to build a WordPress website. And of course, this works in any niche. But you got to love creating content on a regular basis and have the patience to build that audience that trusts you and will take your recommendation, recommendations and buy with your affiliate link. And of course, you gotta get creative. You wanna make sure they use your affiliate link. So maybe give them a bonus if they do something that would help them maximize the use of whatever you're promoting. Again, the cost is very low. You're basically just running a blog and creating videos from your home office. It's gonna take time and effort. But again, when you make a sale you don't have to service this product, you don't have to create this product. You don't have to do anything. You're just making commission off a sale of a product that you recommend. Now, with two business models, arbitrage and affiliate marketing. Very, very little upfront cost, if any, you're not really putting up a lot of cash. We're talking about less than $1,000 to start up a website and get going. Most of us spend more than $1,000 on a vacation. So this is not really a huge loss of investment or huge risk. Now, the third one is a little higher risk than the other two, but still very low risk. And that's buying a business with a partner. There's a lot of businesses for sale that you can buy, that are successful, that are making income month over month. If you're curious about this world, you can go to empireflippers.com this is a great site that you can check out to buy a business. Now, you may not have, you know, $100,000 or $200,000 or a million dollars to buy a business. Maybe you have $20,000, okay? And there's a business out there that might be for $150,000, $200,000 that is really being mismanaged, that has incredible potential, that if you took it over, it could be a million dollar business within a year. So one of the ways a lot of people will become entrepreneurs is they'll partner with somebody who has capital and say, hey, how about we partner up? I'll put in 20,000 and you put in, let's say 100,000, and let's say the business is worth $200,000. Okay? So you're still short $80,000, right? But here's what you do. You work in the deal that you don't pay the business owner all in one lump sum, but what you do is you work in the deal that you pay the business owner over two years. So you could do it immediately one third, and then after one year, another third, and after the second year, another third. Then what? Well, then you can go to your partner and say, hey, I know you're putting up 100 grand and I'm putting up 20 grand, but I will manage the whole business. I will run it. I will make sure you're just going to be an investor. So even though I'm not putting up so much money, I'm taking my equity through sweat equity, through actually working and doing the business. So you might say, hey, you can own 65% and I'll own 35%. Whatever you work out. And you have a partner in business who's an investor, who's great, and you can even work a deal where you can buy some of that share back from the investor or that partner. So maybe eventually you can buy the whole thing. And within the two years, you can take the revenue you're making from that business. Obviously, you're going to make it grow and make it better and pay back the remaining 80% to the business owner you bought it from. Now you might say, well, Omar, what if I don't? What if I can't make 80 grand in two years in profit? What if I only make 60? I'm going to be short 20 grand. How am I going to pay the owner? It's still a good investment. Why? Because if the business is better off than it was when you bought it, let's say you bought it for 200 like we said, and let's say you've increased revenue by 40%. You can easily sell the business for 300,000 or 350,000, and you just made 150,000 in profit that you can split with your partner. And of course, the owner of the business would get the remaining money that's owed to them. So if you see a business that has potential in your area of expertise, you can always partner with somebody to get the capital and get it to a point where you can either sell it or you can just thrive with it and take it through the stratosphere. You're lowering the risk by getting other people involved. You're lowering the risk by betting on yourself and obviously saying, I'm going to compensate myself with a percentage with an equity amount based on me running the business. And of course, you're lowering the risk by spreading out the time when you pay out the owner. Everything is negotiable in business, and you can work something out that works for you and the business owner. And remember, when somebody's selling, there's a good chance they have a sense of urgency. They want to get out of the business some reason, and they may be open to this type of deal. It's not totally unheard of.

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One of my favorite quotes by Jim Rohn, the father of personal development and motivation, that you can, you know, YouTube is it's all risky. Starting a business is risky. Not starting a business is risky, meaning that if you don't take action, you're not going to get results. That's a risk you're taking by not taking action. So it's all risky. So you just need to figure out what level of risk you're comfortable with, try to minimize it as much as possible and build a business around those parameters. Right? I really believe it's good to have a bit of pressure, but you have to have balance. You have to have a bit of pressure and some comfort so you can be creative. Thanks so much for listening to the 100 RMBA Show. If you love what you hear, hit subscribe right now so you never miss an episode. It's absolutely free to subscribe. Also, by subscribing, you get access to all our archive episodes, over 1600 episodes in your archives. It's absolutely free. So go ahead and do that right now. Before I go, I want to leave you with this. If you're in a business right now that you don't like how risky it is and how much pressure is on you, you can pivot, you can change your business and incorporate some of the elements I talked about, arbitrage or affiliate marketing or partnering up to mitigate your risk and maybe even take some money off the table so that you can feel like, hey, there's not so much pressure on me. Thanks so much for listening and I'll check you in tomorrow's episode. Q and A Wednesday. I'll see you then. Take care.

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Expired in 2012.

Dang it.

Fortunately, by switching to Geico, you could save about 900 on car insurance without ever touching a coupon.

It feels good to save big. It feels good to geico.