Want a Successful Business? Try These 7 That Rarely Fail!

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00:00Data says over 50% of you want to start your own business, but less than 10% of you ever

00:05will.

00:06Why?

00:07Because you don't know what business to start.

00:08In this video, we're changing that by breaking down the least risky businesses that anyone

00:12could start.

00:13Or in other words, the businesses that are easiest to start because they have low startup

00:18costs, little regulatory technical barriers, low concentration, otherwise known as fragmented

00:23markets.

00:24So by the end of this video, you'll have enough data and stories to go out and start

00:28one of these businesses yourself.

00:29But how do we know?

00:31We analyzed institutional data of 30,000 businesses to find specifically the businesses with the

00:37lowest barrier to entry.

00:39By the way, we used this database, which cost me 30k a year.

00:42But before we get into it, make sure and hit that subscribe button so that you can learn

00:46all the rest.

00:47All right, we're going to start with one of the worst, but one of the best that might surprise

00:50you, which is a chiropractic practice.

00:53Now I wasn't even going to include this one because it does mean that you're going to have

00:56to get licensed.

00:57You're going to have to go through some certifications.

00:58But the reason I did is because if you think about medical profession taking the better

01:03part of a decade and being really expensive to go to, chiropractic is way down here, maybe

01:09three to four years on average.

01:11So you could start at a lower level and scale your way up as opposed to having to be the

01:15doctor that your parents always wanted you to be.

01:16Let's start with the barriers to entry.

01:18Startup costs.

01:19How much is this bad boy going to cost you?

01:20The startup costs for a chiropractic practice are one of the lowest in the healthcare businesses,

01:25which is actually fascinating.

01:27So let's say from a just a supply perspective, you could be in for less than 10k.

01:32We'd have an adjusting table, which would be 1500 to 5000.

01:36Diagnostic tools, maybe 500 like reflex hammers, you guys ever seen those?

01:41Therapeutic equipment, maybe another $1,000 for items like electrotherapy devices, maybe

01:47for items where you can get them to massage different parts of your body.

01:51Support tools, 300 to 1000 for things like pillows, cushions and other accessories.

01:56Now, education requirements are more.

02:00Chiropractors need to complete a doctor of chiropractic program.

02:03The educational barriers are way lower compared to becoming a medical doctor, obviously.

02:08These could take three to four years to complete after undergraduate studies.

02:12One of the bigger things that you have to think about with chiropractors is insurance.

02:15It shouldn't be that expensive, but we got to make sure we protect you from if you're

02:19new to the game and anybody gets hurt.

02:22The chiropractic industry is highly fragmented.

02:25With independent chiropractors operating solo practices all over the country.

02:29And those people represent half of the industry.

02:31Things to consider, flexible practice models.

02:33So chiropractors have the flexibility to start small practices, mobile services, which basically

02:38requires little to no cash upfront.

02:41In fact, the way that I got to my most recent physical therapist and chiropractor is from

02:45a gym located here in Austin, Texas.

02:49This case study in particular is interesting.

02:52My friend Andrew, who set up in his gym, the gym that I happen to be a part of, and created

02:57an atmosphere for him to be a physical therapist.

03:00First he started doing massage because that was easier to get into.

03:03Then he continued with physical therapy.

03:05And he is also actually licensed as a chiropractor.

03:08What's interesting is he has a few best practices that I thought would be useful for those of you

03:12who want to work with your hands, but don't want to go through the whole doctoral practice.

03:16First he said he transitioned from insurance-based clinics to a cash-based practice at a gym here

03:21in Austin, my gym.

03:22And the reason why that's interesting is with insurance, one, you have to chase the payments.

03:27You can't set your own prices because insurance sets those prices for you.

03:32And it often means that you have a different type of clientele, a type of clientele that

03:35might not have enough money for them to pay direct.

03:38Now, the tough part is, with a cash-based practice, if he doesn't get customers, he

03:42doesn't get paid.

03:43But he built up a strong rapport with the gym trainers and basically had lead flow, right?

03:49So he told him, you send your clients to me, I'll send them back to you.

03:53So he developed a full caseload of recurring patients based on people who were coming in

03:57to train.

03:58Go work out, come to me afterwards.

03:59Go work out, come to me afterwards, and vice versa.

04:02In this cash-based setting, it's crucial to target sort of health-conscious active clients

04:07who actually value preventative care, encouraging them to do things before they need it.

04:13And then he could even give them a little tip, a little extra cash for referrals.

04:18Bookstores.

04:19This one surprised me, too.

04:20Originally, I thought, why would bookstores be so low-risk and not have much that you need

04:26to start?

04:27But then we started digging into it a little bit more, and this is what we found.

04:31Really low barrier to entry.

04:32So no regulation or prior education needed.

04:35Unlike most industries, nothing is stopping you starting a bookstore tomorrow, certainly.

04:39Low concentration.

04:40Yes.

04:41While no doubt online bookstores are everywhere, physical bookstores still offer a unique shopping

04:46experience.

04:47And a lot of times they're partnered with things like a pop-up cafe, you know, a little

04:50store with additional goods in them.

04:52And they encourage you to browse and discover an inviting atmosphere that an online retailer

04:56couldn't actually have.

04:58And the proof is in the data.

04:59Despite a slight decline in 2023, print book sales were still up 10% higher than in 2019,

05:05the last pre-pandemic year.

05:07And I don't think this is a huge business you could grow to massive levels.

05:10Two, I think this is an interesting business you could do as a pop-up.

05:13So you could have pop-up bookstores.

05:15You could also have book resellers where people can come in.

05:18You can get books for basically free from people because people feel like bad throwing

05:23away a book.

05:24And you can resell those books.

05:26It's not something that you're going to have a huge amount of volume in, so you'd probably

05:30have to mark up the price on those retailers.

05:33And having researched exactly how much it takes, it looks like an initial investment you'll

05:37need somewhere in the realm of, let's say if you're going to do a pop-up store, maybe

05:40you'd need donated books plus a thousand bucks for rent, plus another thousand books, plus

05:45another thousand bucks for additional books and some other accoutrements to make the site

05:49look nice.

05:50But if you're going to do a real store, you're going to need more like 10,000 or maybe

05:5425,000 as a bare minimum.

05:56What's interesting though about book sales is if you are an in-person store, oftentimes

06:02you can get books without paying for them upfront.

06:05And so a lot of the bookstores that you have, have an on-sale basis.

06:09So you get paid for the book author when we sell the book, which is interesting.

06:14That means they float your money for you.

06:16Now rent could be all over the place, but could range anywhere from a thousand dollars to,

06:21if your barn's a knowable, this is going to be a hundred thousand plus.

06:24Obviously if you're going to do it our way, you're going to want to make your rent really,

06:27really cheap.

06:28I'd probably stick with pop-ups too.

06:29I wouldn't keep this business model as a for sure until you trialed it on a very small

06:34basis and probably piggybacked on somebody else's traffic.

06:36So something like a coffee shop.

06:38Of course, as a bookstore, you're going to need bookshelves to display, store, and market

06:42your available book titles.

06:43The number of bookshelves you'll need is going to depend on your opening inventory for the

06:47bookstore.

06:48But I would budget, let's call it anywhere from three to $10,000 on bookshelves.

06:52We also know this because you could do bookshelves on the cheap and we've seen this lots of different

06:56ways.

06:57In the Halloween Superstore models we looked at, they pop up a 30,000 square foot store and they

07:03use less than $25,000 to build the shelves.

07:06So for your little bookstore, we can do it cheap.

07:09Signage.

07:10Obviously you need this inside and outside of your bookstore to market your store.

07:13This is where prices could really vary, but you can show your promotions, show your book

07:17prices, and designate the different sections throughout the store.

07:21This is going to add a couple thousand dollars.

07:23Estimated utility costs for the first month to keep the building functional, $475 to let's

07:28call it $2k.

07:29Things to consider here.

07:30Great operational flexibility.

07:31Small independent bookstores can operate with minimal staff.

07:35Huge benefit.

07:36But bookstores, they operate on pretty slim profit margins.

07:39So making profitability a challenge, which means that you have to be super strategic on

07:42which books you choose.

07:45But I think there's plenty of ways to do this in an interesting market.

07:47Let's use one case study from Ryan Holiday.

07:50So Ryan Holiday's bookshop is called The Painted Porch and he's got this huge following online.

07:55And Ryan's recognized as sort of having this unique appeal of physical bookstores that you

08:00can never get online.

08:01The store focuses on a curated selection of books that he personally recommends and he

08:05aims to provide sort of a lovely, funky shopping experience that prioritizes amazing

08:12titles rather than a bunch of trends.

08:14And then he adopted a community-centered approach.

08:17So people come and engage with the literature and each other.

08:21The other part that I really like about this model is if you live in a small town like

08:24Ryan Holiday does, the lease is really low.

08:28The main street that he's on has great foot traffic.

08:32Lots of times people go to these tiny towns and in these tiny towns there's not a lot to

08:35do.

08:36So they might want to go to a little local bookstore, have a cup of coffee and peruse a book.

08:42This is why you'll often find a bookstore located on main streets in like second, third,

08:46fourth, fifth tier cities.

08:47I think it's a really interesting way for you to become a community hub.

08:50They're not going to your bookstore because they have a book need, like I need this book.

08:56That's Amazon, baby.

08:57They're coming to your bookstore because they want to have an environment and a feel.

09:01They want to support local authors.

09:02They want to be able to actually be there for an author signing.

09:05You could have local up and coming activities for potential authors.

09:09This is really a community play and that's why I think it's really an interesting, fun

09:13business model.

09:14I kind of want to open a bookstore.

09:15But why is looking to own a business important anyway?

09:18Well, I think one of the biggest differences between everyday humans and the average millionaire

09:23is that they have multiple income streams.

09:25And I'm willing to guess that most of you don't.

09:28I certainly didn't.

09:29In fact, the average American has just one income stream, usually their job.

09:34But how do you go from one to seven income streams?

09:36Am I suggesting you go and start seven new businesses?

09:39No.

09:40If you can't buy a business outright, then maybe you do real estate, but maybe you can't

09:44buy real estate outright.

09:45So you use something like the Fundrise flagship fund, which allows you to invest in real estate

09:49for $10 or $100.

09:50I actually started investing in Fundrise when they started years ago.

09:54Typically, I don't allow investment platforms onto the things that we do.

09:57But I think in this environment today, with real estate down, with small amounts of risk,

10:02allowing more people to get income streams is part of the mission.

10:05Financial freedom doesn't come from some get-rich-quick passive income.

10:09It comes from thoughtfully investing over time and allowing it to compound.

10:13If you guys are interested in investing, Fundrise is a great platform to do it.

10:17Thank you for sponsoring this video, Fundrise.

10:19Click the link in the description below and you can get more information on Fundrise.

10:23So next one, mobile food services.

10:25You guys know what I'm talking about.

10:26This is the food truck.

10:28This is the popsicle cart.

10:31This is an ice cream truck.

10:33These are all around us.

10:34They've become part of everyday life.

10:36I even saw the one the other day that was a mobile coffee shop

10:39that was set up outside of another coffee shop because that line was too long.

10:43You also see these outside of really big restaurants.

10:47During rush hour, they just pull in and because it's lunchtime,

10:50there's going to be tons of people in there wanting quick and easy food.

10:53You have a food truck as an alternative.

10:54So the barriers to entry here are, well, way lower startup costs

10:58compared to traditional restaurants for sure.

11:01While opening a brick and mortar restaurant can cost upwards of $200,000 to a million or more,

11:06food trucks are a tiny fraction of that.

11:09You might not even have to pay at all.

11:11And we can talk about that here in a second.

11:13So some support initiatives.

11:14Initiatives like On The Go LA provide affordable food truck rentals and operational support

11:20to allow people to enter the market with minimal upfront investment.

11:23That means a lot of times for these type of endeavors,

11:26there's some sort of government grant.

11:28There are food truck vending locations where they might even help you get your own

11:33food truck in order to fill their lease.

11:36So there's lots of ways to get access to food trucks without spending a ton.

11:39Food truck industry, highly fragmented.

11:41There is literally no single operator controlling more than 5% of the market, which is wild.

11:46But this means a lot of people are opening food trucks.

11:49The number of food trucks in the US has increased from about 4,000 in 2010 to over 36,000 by 2023.

11:56So some things to consider.

11:58You've got to get in the right places.

11:59This is the location, location, location of real estate.

12:03You have to make sure that you have traffic already and probably quite a bit of traffic

12:07because you're going to have no SEO, not great signage, and the thing's mobile.

12:11So you've got to figure out how are you going to get to where the people are.

12:14Two ways to build a business.

12:16You can either pull people to you or you can push them to you.

12:20You're in a food truck that's located outside of a big, huge football game

12:26in which there's a bunch of hungry people that don't want to pay 3x inside the stadium.

12:30So profit margins for this industry are actually slightly higher than restaurants.

12:36So let's say that restaurants typically operate somewhere between a 3% to a 10% margins.

12:43Food trucks can operate somewhere from 6% to 20% margin.

12:48Let's do a case study here.

12:50Catherine O'Brien, also known as the ice cream lady, is somebody that we've talked to at Contrarian Thinking.

12:55What's interesting is watching the launch that Catherine did.

13:00She sells ice cream out of a bike.

13:02Look at this thing in front.

13:03I don't know what this is.

13:04This is like a basket.

13:05It's like a cooler.

13:05It's like a bike cooler business.

13:07It's called Cream Cruiser in 2015.

13:10After she was kind of inspired by the crazy crowds at Baltimore's Inner Harbor during her commute.

13:16And she realized that she could start a business with really low startup costs,

13:21sell to a bunch of people that are already located there, and then build on top of it.

13:25So she launched the business with an investment of around $8,500,

13:28which covered the bike, trailer, event supplies, permits, and obviously her ice cream.

13:35What's interesting is over the years, Catherine has catered more than 700 events and sold over 160,000

13:41ice cream sandwiches, meaning that she's done sales of more than $1.6 million.

13:46What I thought was interesting about this too is that she was really clever and that

13:50she didn't just have a static location.

13:52She said, well, people will pay a premium to have one of these bad boys at a wedding.

13:57And so because of that, she could have her Saturdays and Sundays,

14:00which maybe would be great for ice creams during the day.

14:02But in the evening, who's buying ice cream in the middle of the night on Friday?

14:06Well, if you're at a wedding, you've already gotten a down payment from it.

14:09Plus you get paid up front when you do something like a wedding or an event,

14:13and then you get to fulfill later on.

14:15Whereas otherwise, if she's going to go sell just on the street,

14:17she's going to have to buy all the stuff, hope people sell it.

14:20So this allows her to be a little bit more flexible.

14:22Now it's not all sunshine. Let's talk about some challenges faced.

14:25So despite the initial success, she had a lot of challenges with a failed wholesale

14:29venture that led to a lot of money lost, which meant that she refocused on catering,

14:34which improved profit margins.

14:36Catherine now earns a minimum of 25k per month and has expanded her business model to include

14:42Bike Business University, which is interesting, an online course teaching others how to start similar

14:47ventures. It's kind of like how people decide once they have a really great painting franchise

14:51located in Austin, Texas, like we do with that one painter, wait a second,

14:55I could, I could grow all of Texas myself and have lots of painting ventures,

15:00or I could franchise it and I could allow other people to copy my model.

15:04And she's allowed other people to copy her model.

15:06So now she has multiple revenue streams.

15:08Oh, by the way, if you liked hearing about Catherine's story,

15:11link in the description for our newsletter.

15:13We write about stories like this all the time.

15:15We have a deep dive on Catherine too, if you want to see more of her numbers

15:18and check our facts.

15:20All right, let's talk about the next one, florist.

15:22I'm obsessed with this idea.

15:23I think when I retire, I want to be a florist and apparently have a bookstore and that's it.

15:28Then no more internet.

15:29We'll shut this all down.

15:30You'll never hear from me again.

15:31But the florist businesses are interesting for lots of different reasons.

15:34One, you can scale this quite easily.

15:37You can scale this from a tiny little wagon that you sell some bouquets out of to a big enterprise

15:46where you do weddings and events and thus have a big front end filled with flowers,

15:51but also a big back end where you fulfill $100,000 plus orders.

15:56Let's get into barriers to entry.

15:57So no formal education is typically required to become a florist.

16:01I don't think there's a PhD that anybody's requiring, at least not yet,

16:05at least not until the government gets its hands on it.

16:08Licensing requirements also are really not a requirement.

16:11So most states in the U.S. don't require specific licensing or certification to work

16:15as florists, which is great.

16:16And you can start as many ways as you can think of.

16:19And you can fit it around your current life.

16:21The other thing is you can do freelance work.

16:23So some florists begin their careers by offering freelance services for small-scale events, right?

16:30I love the idea of home-based businesses.

16:32This is how business started.

16:34Now whenever I tell somebody you could start a business in your home,

16:37they go, oh, no.

16:38What about the risk?

16:39What about the insurance?

16:41What about the requirements?

16:42You guys, have you been to Etsy lately?

16:44Do you think that they have a headquarters for the dollies that they put on a table

16:49that the grandma knits?

16:50Of course not.

16:51Home-based businesses is where we started.

16:53It is our right as humans to be able to start a business in our home

16:56as long as you don't transact the stale at your house.

17:00That is usually the difference between the two.

17:02So if I was at my house right now or not, we're at my office.

17:04But if I was at my house and we had customers coming in and out,

17:07that is a store front, in which case the government tries to get their piece.

17:10But otherwise, with the rise of e-commerce, many florists start by operating from home,

17:15just like we all did.

17:16So you can really reduce some of those overhead costs.

17:19But to scale up from there, I sort of see it as a stair stat.

17:23So you start at home, then you might have a pop-up location where you go,

17:27oh yeah, this kind of works.

17:28Then the next level would be having a pop-up stand.

17:31Then you could have an actual brick and mortar store, etc.

17:35A florist could be started with as little as a thousand bucks.

17:37You need tools and supplies.

17:38Let's call it 200, 300 bucks.

17:40Initial flower inventory, 300 to 500.

17:44Business registration and licenses, I don't know, 50 to 200 bucks.

17:48Marketing materials could be expensive,

17:49but you probably don't need anything to start except the right location.

17:52Maybe 100 to 200 bucks we'll allocate to that.

17:55A website or online presence, you probably just need Instagram these days

17:58and a cheap website so you can get Google reviews.

18:01The other thing that's interesting is that it's pretty low competition.

18:04So 38,467 florist businesses are operating right now in the United States as of 2024.

18:12So that means there's a lot of them.

18:14But if you think about the fact that we have a population of 300 plus million,

18:19I don't think that's as many as we think.

18:21Here are some things to consider.

18:23Maybe it's a great time to enter the industry.

18:25The florist industry in the US is growing like crazy.

18:28Revenue increasing at a compound annual growth rate of 4.1% over the past five years.

18:34So that means the industry is like, I don't know, 8.6 billion in total market cap.

18:40The profit margins on the business are interesting too.

18:44They reach about, let's call it five or 6% of industry revenue in 2024.

18:49So that's pretty healthy.

18:50So let's talk about a case study.

18:52This company is founded by Christina Stemble in 2010.

18:54I actually met her back in the day.

18:56She actually started it from her one bedroom apartment in San Francisco.

18:59She launched the company when she had only 50k in savings, nothing else.

19:04She didn't have any external investors.

19:06What's interesting is Farm Girl Flowers is now an e-commerce flower company that ships bouquets,

19:11faces, and arrangements across the US.

19:14The company started with just one daily bouquet and has grown to offer up to 40 arrangements at a time.

19:20I mean, I'm not sponsored by her or anything, but I use her bouquets every time I send.

19:25What I love about this business is, you know how a lot of times you get a bouquet

19:28and they're in like a big ugly commercial box and they got this like plastic wrapping on top of them.

19:32They're kind of cheap looking flowers.

19:34They're just bright red roses.

19:35You men are like, I don't know what you're talking about.

19:37But for women, there's a real difference between a corporate looking bouquet of roses

19:42and between like a boutique hipster bouquet of roses.

19:46And that's what Christina's is.

19:48But what's fascinating is this business remains completely bootstrapped, no external funding,

19:53which is fascinating in many ways because her competitors are multi,

19:58multi, multi, multi, multi million dollar businesses with lots of funding.

20:01Also, she is the only national flower delivery company owned by a woman, which is wild,

20:07because I think women are the ones that like flowers.

20:08But I guess you dudes are the ones that buy them.

20:12All right.

20:12Next one, pet care services.

20:14This could mean lots of different things.

20:15It could be grooming them.

20:17So washing, trimming, cutting the nails, et cetera.

20:20It could mean walking them.

20:22It could mean babysitting them, like those little pet hotels.

20:26Lots of different ways to service man's furry friend.

20:29What's interesting is the market is quite fragmented.

20:32There are some big companies in this industry, but that's not really the majority of them.

20:37Most pet service industries that aren't the few VC backed ones you can think of are done locally.

20:43And I think a lot more money can be made by specializing in what types of animals,

20:48what types of grooming or training.

20:50I have a friend who has a training company that does seven figures a year.

20:54And it is all about training your Belgian Malinois in how to be a protector.

20:59Her name's Ashley Horner, if you want to check it out.

21:01It's an incredible business that basically takes people who are obsessed

21:04with this one type of dog breed and turns their dogs into absolute protection animals.

21:10There's also services like this for people who come into your house, like this guy.

21:15Low startup costs.

21:20You can literally start for less than $100.

21:22Dog walking, for example, a leash.

21:25You might not even need one.

21:26They probably have one.

21:27Print a few flyers and you're good to go.

21:29In fact, a woman did that in my neighborhood and now walks a bunch of my neighbor's dogs.

21:34And for some reason, because her flyer's there, it's like her face,

21:37you tear it off at the bottom.

21:38Remember that?

21:39She says she's located locally.

21:41I felt more comfortable with that than actually going to an online site.

21:44And the best part, not only are these very loyal customers, they'll tell their friends

21:48if you're any good and their friends have geographic concentration.

21:51They're next to each other.

21:52So my tip, get to know other pet care services like grooming and send each other your customers.

21:58Regulation does vary, so you should make sure you check for the particular service.

22:02But on the whole, Vertical IQ ranks it as much lower than most comparable industries.

22:07I don't think you need a certification to know how to walk somebody's dog.

22:10Similarly, the skill set requirements varies from service to service.

22:14So you might not be able to start, for instance, a Belgian Malinois training company,

22:18or I have another friend who has something called Bite Camp,

22:21which he teaches these badass service dogs how to bite and attack somebody if you yell at them.

22:26So you probably can't do that if you haven't been properly trained,

22:28but I'm pretty sure just about anybody could walk a dog,

22:32just about anybody could learn to wash a dog.

22:34All right, things to consider here.

22:36Pros, big target market.

22:37So 82 million U.S. households own a pet, and we spend a lot of money on them.

22:42And it's growing.

22:43The global pet care market was valued at $226 billion in 2023,

22:47and projected to grow $340 billion by 2029.

22:51So that is a fast-growing market.

22:53The other part that's nice is this can be mobile or location-based.

22:56So it's an old-school industry where there's a lot of opportunity in modernizing these services

23:02by leveraging the internet to better serve pet owners in search of quality providers.

23:06I also think you really can't speak too much about the effect of localization.

23:11People are very attached to their pets.

23:14They want to know that it's not some big commercial service taking care of them.

23:18They'd like to know the person.

23:19That's why, for instance, you used to go to Petco to wash and groom your dog.

23:24Now I would never drop my dog off there.

23:26I wanted to go to the local groomer instead.

23:28So we actually saw the market start to protect these really big guys,

23:31and then consumers said,

23:32no, I kind of want the local guys instead.

23:35For instance, when it comes to me, I don't have somebody random watch my dogs.

23:39I have Samuel do it.

23:41Okay, some cons to this.

23:42Animals can be difficult.

23:43They're not human.

23:44In fact, they're largely better than humans in many ways.

23:46But also, you could have people get bit by animals.

23:50If, dear lord, help you if you hurt somebody's animal.

23:53So this could be more unpredictable and vary in different ways.

23:56Also, we have an entire video on a weird way that you could make money with

23:59dogs and or dog services if you want to go back and look at this video.

24:04Let's get into a case study.

24:05So, actually, members of our contrarian community,

24:07where we teach people to buy and sell businesses, bought a pet grooming business.

24:12This is James and Katie Fleming.

24:14They actually transitioned from law enforcement and business consulting

24:18to entrepreneurship in owning a dog grooming business.

24:20They wanted more family time and freedom.

24:22They also loved dogs.

24:24So they bought a business.

24:25Their business acquisition journey was really interesting.

24:28So they did the thing all of us kind of do.

24:30After exploring real estate investing,

24:32they discovered the potential of acquiring existing businesses.

24:35Probably my fault.

24:36And then decided to enter the dog grooming and boarding industry.

24:39What was interesting is they acquired the Fido Spa.

24:43If you guys are in Dallas, go check it out.

24:45For $340K with an $80K down payment.

24:48They used seller financing for the rest of the remaining amount.

24:51Post-acquisition, they improved the business by implementing very simple things, you guys.

24:57Consistent pricing, having better customer service,

25:01which allowed James to leave his law enforcement job and work fewer hours

25:05and get to hang out with dogs all day, which I love.

25:08Now they run a successful, profitable business,

25:10and I think they're starting to open their second location.

25:13And they haven't even done so many fun things I would do with an old business like this.

25:16Like, I would redo the branding and logos.

25:18I would have a better and cooler looking storefront.

25:21I would probably have activities and community hours.

25:24Bring your dogs around.

25:25Let's all hang out.

25:26Everybody gets their nails clipped while we all have coffee.

25:28Something like that.

25:30The next one is bed and breakfast,

25:31which we could also say was Airbnb and property management.

25:34So we kind of lumped these all together.

25:36Again, thinking of the stair step method.

25:39So what's fascinating is you used to have,

25:41well, you could start a hotel, which would be millions and millions,

25:45or you could start a bed and breakfast,

25:46which might be a couple hundred thousand dollars or a million.

25:48The difference between the two is basically that a bed and breakfast is a smaller size,

25:52more personal hotel with less amenities.

25:55Then we could take a step down from that, which would be an Airbnb.

25:58And then even below that,

25:59you could have a property management of Airbnbs or bed and breakfast.

26:03So you can see the stair step model.

26:04Now, this is a fragmented market, which is interesting.

26:06Let's just focus on the bed and breakfast for a second.

26:09There is no single company holding a significant market share,

26:12probably because inherently bed and breakfasts aren't meant that way.

26:15So this means lots of new entrants can kind of get in there, carve out their niche

26:19without having to compete with the large chains.

26:22Startup costs.

26:22Now, of course you could go big, but since this is for you beginner businesses,

26:26if you already own a property, initial costs can be minimal.

26:30So that's for sure.

26:32But if you're renting, maybe you do rental arbitrage,

26:34which can significantly reduce the upfront costs.

26:37If you wanted to start small, let's think about it this way.

26:40The average annual revenue for a bed and breakfast property is around $221,000.

26:45You guys can see where we get all these numbers

26:47to figure out what you think about our averages down in the show notes.

26:51So that means that even smaller establishments

26:53can achieve profitability really quickly.

26:56You don't actually need one that does two or three million dollars

26:58in order for this to work.

26:59You can start small and scale up.

27:02And if you don't want to start with your own bed and breakfast,

27:04why don't you just ask to manage somebody else's?

27:06That would cost you nothing to start.

27:07So things to consider here.

27:09Where you're based.

27:10Let's just get to some math here.

27:12Coastal areas have a higher occupancy rate.

27:14So 6% higher than the rest.

27:16The truth of the matter is, this is all about location, location, location,

27:20and using something like AirDNA to determine which areas have the best

27:24for bed and breakfasts for Airbnbs.

27:27It could also mean that if you want to do the property management side,

27:30that doesn't matter as much.

27:32You just find where you can get your supply.

27:34For instance, I own both an Airbnb and part of a property management business.

27:39For the Airbnb business that I have, I have all different sizes.

27:42But we have one tiny one located here in Austin that we bought for like $350,000,

27:47something like that, me and my brother back in the day when he lived here.

27:50That Airbnb is profitable every single month since we've had it on average.

27:55Now, we don't make a much.

27:57We might make $500 to $1,000 a month on that Airbnb.

28:01It's located downtown in Austin.

28:02But on a $350,000 investment, that's actually pretty good,

28:06especially since we did a mortgage.

28:08The only bummer is that we have to pay 20% of that to our property management company.

28:12So because I saw that, I was like, can we own part of one of those companies?

28:15Because I'd like to not have to pay for the huge upfront cost for the Airbnb,

28:20but also get part of that property management fee.

28:22So we did.

28:24This was ranked as the lowest barrier to entry business, landscaping,

28:29which kind of surprised me.

28:31But I guess I understand it because I actually have three landscapers that work on my house.

28:36We have Oscar, who comes and has done our landscape architecture.

28:42Then we have Ramon, the guy who comes on a weekly basis, clips everything,

28:45makes sure nothing's dying, and does day-to-day landscaping and lawn cutting.

28:50Although at this house, we don't have much of a lawn.

28:51And then we have the third one, whose name is Lisa,

28:54and she's the one who came in and redid the entire backyard.

28:57She only does really big projects, and I think we paid, I don't know,

29:00$100,000 to totally redo the landscaping of the backyard.

29:03So again, you can scale up between the three.

29:06Now the barriers to entry.

29:07The landscaping industry, highly fragmented.

29:10You're going to see a common theme here, right?

29:12600,000 companies operating in North America,

29:14no single company holding more than 5% market share.

29:18So what that might tell you is that it's actually kind of hard to scale these bad boys.

29:21So if you want a $50 or $100 million business, maybe hard.

29:24But to start one, maybe not.

29:26Because the startup costs are pretty low.

29:28New landscaping businesses can begin with minimal equipment.

29:32Lawn mower, string trimmer, basic gardening tools collectively cost you,

29:36I don't know, $2-8k.

29:38Little regulatory requirements.

29:40Here in Texas, you don't have to have licenses to operate a landscaping company

29:43unless you're going to actually do construction.

29:46Now that could differ.

29:48If you're in California, a license is needed for breathing.

29:51But here, you probably only need them for specialized licenses.

29:54So check whichever ones are required for basic landscaping services versus more complex.

29:59This is highly in contrast to industries like construction,

30:03which have tons of licensing and regulatory requirements.

30:06Things to consider here.

30:08This is perfect for those of you guys who don't want a ton of employees.

30:12So most of US landscape contractors have no more than five employees,

30:18highlighting that the majority of small businesses are, in fact, small operations.

30:23Let's do a little case study, though, on if you wanted to scale one up to make millions a year.

30:27This is my friend Nolan Gore, who owns Top Choice Lawn Care here in Austin.

30:30You should check him out, again, if you need your lawn to be trimmed.

30:33Let's look at his business.

30:34So he scaled from $1.6 million to $7.5 million in revenue, which is interesting because

30:41Nolan's experience was the military and financial, and he kind of used that to acquire

30:46and grow this landscaping business on the back of a family business.

30:50He purchased Top Choice Lawn Care when it was not profitable.

30:53That I don't recommend for your first thing.

30:55That makes it really hard.

30:56But he was kind of motivated by the fact that

30:58his confidence and background in landscaping meant he could add on an unprofitable asset.

31:02Nolan's father was the founder of another landscaping business,

31:06and then he added this business onto it and basically did it at a price equivalent to its debt,

31:12meaning that, yeah, he did have to take on some risk in order to do this investment opportunity.

31:18That said, Nolan talks about a lot of the things he did wrong and lessons learned,

31:24and how having practical management experience over theoretical knowledge is crucial in business in

31:31general, but certainly in this one.

31:33So, landscaping businesses all the way to florists, all the way to bookstores.

31:38Now you can't say you don't know what business to start, but if you want to kickstart that,

31:43you might want to think about msmbook.com, which is where I have my book located about

31:47how to buy Main Street businesses so that you can start from third base as opposed to square one.

31:53So choose one that gets you fired up and get to work.

31:56And let me know in the comments which one you end up picking, and if it works out for you,

32:01and what questions you have. We'll try to answer every single one of them.

32:04Thanks for watching, guys. If you haven't, make sure to subscribe to the channel.

32:07We just did this crazy analytics where we saw the percentage that subscribed

32:11versus the people who keep coming back. Spoiler, a bunch of you guys are missing out.

32:15So make sure you hit that subscribe button and you guys can actually get a bunch of

32:19numbers and math to help make you money instead of a bunch of nonsense and news.

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