A reader from the Midwest sends this question:
“What is the easiest business to start? I always wanted to run my own business. I don’t have a lot of money and don’t have any business experience. But I really want to start controlling my own future and think starting a business is the best way. What kind of business should I start?” – J.L. from Iowa
That is a great question. The easiest business to start is a service business, especially for a beginner.
A service business is any kind of business where you sell services. In other words, you sell your skill, labor or expertise — instead of products or goods. Examples of service businesses are:
- You become a consultant and sell your expertise.
- You provide a service for homeowners such as house cleaning or painting.
- Or you sell services online to other businesses — such as website design, social media marketing or virtual assistant services.
There is a big difference between owning a service business and being an employee. When you’re an employee, your actions are usually guided by your superiors.
However, as a business owner, you’re the decision-maker.
You have complete control over your professional path, and most importantly, you’re developing an asset of significant potential value — your business.
Small Business Deals
Why opt for a service business? The simplicity and accessibility of this model make it an ideal choice for many. Everyone possesses some form of knowledge or skill that others may find valuable.
You might be surprised how your personal skills or interests can translate into a profitable service.
Additionally, from a financial and strategic standpoint, a service business often makes the most sense, offering potential for both minimal startup costs and high profit margins.
5 Reasons a Service Business is the Easiest to Start
Here are 5 reasons a service business is the easiest business to start, especially for beginner entrepreneurs:
1. Requires Little Startup Cash
Many service businesses can be started for little money or no money.
After all, you don’t have the expenses of renting office space – you can work out of your home at first. You don’t have to develop a product. There’s no factory, warehouse or inventory to invest in.
You don’t have the expense of hiring employees. Most service businesses start out as sole proprietorships. Later on you can hire help but it’s not essential at the beginning.
In fact, your expenses might be as little as the cost of a box of business cards, some flyers or a website.
Some entrepreneurs don’t even incur those expenses. Some entrepreneurs opt to use online marketplaces to sell their skills. Usually you can start with a free profile at such sites.
2. Is Fast to Start
A service business is the fastest type of business to start because you don’t need to do a lot of advance preparation. You can get your business off the ground right away. The speed makes it one of the easiest businesses to start.
- Consumer service business: If you decide to start a local consumer service business, you can launch it by spreading the word in your neighborhood. Walk around and talk with people or distribute flyers. Set up a free profile at places like HomeAdvisor.com. Or join a site like Nextdoor — speak up when neighbors need services (be helpful but not overly promotional or your efforts will backfire). Don’t forget to set up a Google My Business page.
- Consulting or services for other businesses: If you decide to perform a service for other businesses or do consulting, establish a profile on LinkedIn. Perhaps join LinkedIn ProFinder. And check out freelance marketplaces like Fiverr, Freelancer.com and Upwork. These marketplaces can be a great way to get early clients. You don’t even need your own website at first.
With any service business, it’s critical to find the right marketplaces and referral sites.
Once you get your first client or a few clients, be sure to ask them to leave an online review or recommendation. This will accelerate your growth.
3. Generates Money Quickly
Service businesses bring money in the door fast. In most cases you get paid within a few days or weeks, or immediately upon performing the service.
Contrast that with other types of businesses. Other types of businesses can take much longer before they pay off. For example, if you started a software business, you might have to spend months or years developing a product, marketing it, and ringing up sales.
With a retail or ecommerce business, you first have to invest in a place to sell your items and buy inventory to sell.
With a manufacturing business, you need to assemble raw materials and have some kind of factory or place to create your goods. All of those things take time and money.
However, with a service business none of those are essential.
Simply do the work and get paid. Rinse and repeat.
Easy peasy and uncomplicated! You can see why a service business is the easiest business to start.
Over time of course, you may decide to invest in better equipment, or open an office, or hire employees, or create a whiz bang website or put together a marketing campaign. But that all comes later. Remember, you can get by without those expenses in the beginning.
4. Offers a Good Profit Margin
Service businesses have some of the highest profit margins among small businesses.
That’s because overhead is low. You don’t need a lot of infrastructure or inventory to perform a simple service business.
As a result, more of your hard-earned cash drops to your bottom line. You don’t have large expenses.
That’s why businesses such as web design firms are among the most profitable. In fact, on this list of the most profitable small businesses, almost all are service businesses.
5. Can be Started on the Side
You can run a service business on the side while still employed or in school.
For those currently employed who are not ready to cut ties with a steady paycheck, this is a way to gradually build a business. You keep your financial risk low while moonlighting at a part-time business.
But what if your ultimate goal is to create a product? Service businesses are still a great way to start. Quite a few products have been created by service providers who spotted a need. For example, the Basecamp project management product famously grew out of a web design business.
In short, a service business will pay the bills while you’re readying a product for market. And because you’re already working in that market, your brand recognition and reputation may help launch the product.
We leave you with these final thoughts: unless you have a fantastic business idea burning a hole in your brain, we recommend you start a service business as your first business.
It’s the easiest business to start. You’ll gain valuable business experience. You’ll learn how to satisfy customers.
In the process you might even discover a product to create. Meanwhile, you are earning money and can set aside a financial stake to fund a different kind of business later on, if you wish.
This comparison table provides a quick summary of the article, highlighting why a service business is the easiest type to start, especially for beginners. It contrasts service businesses with other business types in terms of startup cost, launch speed, revenue speed, and profit margin.
| Type of Business | Startup Cost | Time to Launch | Revenue Speed | Profit Margin |
|---|---|---|---|---|
| Service Business | Low | Fast | Quick | High |
| Product Business | High | Slow | Slow | Varies |
| Retail/Ecommerce | Medium-High | Medium-Slow | Slow-Medium | Medium |
| Manufacturing | High | Slow | Slow-Medium | Medium-Low |
Still need ideas for the easiest business to start? See these hundreds of business ideas to choose from. Good luck!
All answers to reader questions come from the Business Pro Insider Editorial Board, with more than 50 years of combined business experience. If you would like to ask a question, please submit it here.
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Agreed. If you’ve got a job then you’ve got skills that an employer is willing to pay for. A service business is just selling that same expertise, but to your own clients.
You should create a business not because it is easy but because it is something that you are passionate about.
Great ideas. Also, there is no much loss in terms of money. Just a simple working space or setup will do for service-based businesses. In this digital world, promotions are strategic and easy to kick off.
Agreed. If you’ve got a job then you’ve got skills that an employer is willing to pay for. A service business is just selling that same expertise, but to your own clients great post sir
service business is just selling that same expertise, but to your own clients great post sir
Very interesting points! Using online marketplaces to sell your skills to clients is very on topic, especially in the current economic climate. Starting a service business has never been a better time!
Agreed. If you’ve got a job then you’ve got skills that an employer is willing to pay for. A service business is just selling that same expertise, but to your own clients.
Agreed. If you’ve got a job then you’ve got skills that an employer is willing to pay for. A service business is just selling that same expertise, but to your own clients.
How do you know what your skills are
And how do you make the first step .
The part where you mentioned that anyone can manage and operate a service business made me consider if I should start one. I’m not sure if I’d do well in a corporate environment, so maybe I’m bound to be an entrepreneur someday. I’ll try to do some reading first on entity formation before planning anything.