The Definitive Tier List for Starting a Beginner Business
Starting a business can be an overwhelming prospect, especially for beginners who are bombarded with advice to leap into trendy models like e-commerce, dropshipping, or affiliate marketing. However, many of these options are not suited for novices. Instead, this guide presents a tiered list of business options designed to help those with little money and experience avoid wasting their time and funds on the wrong ventures.
Three Main Types of Businesses
From extensive research and personal insights, it becomes evident that all potential business ventures can be grouped into three major categories: product-based, content-based, and service-based businesses.
Product-based businesses involve the sale of tangible items or digital products. While they can provide substantial financial opportunities, they come with considerable drawbacks.
Physical Products
These include any commodities sold directly to consumers, such as furniture or clothing. Despite their appeal, this business model has a D-tier ranking for beginners due to significant capital requirements and high complexity.
The key points to consider include:
Pros: Potential for high financial returns if executed properly, autonomy in managing the business, and scalability as systems and hiring practices improve.
Cons: High failure rates, significant investment up-front, a steep learning curve in marketing and logistics, and the common myth that success can be achieved quickly.
Beginners often discover that physical product businesses require extensive knowledge of logistics, audience targeting, and product fulfillment, rendering them high-risk ventures for those starting out without experience.
Digital Products
Digital products, which encompass things like templates, online courses, and eBooks, are viewed as better options than physical products. They incur lower production costs and require less time to create.
Pros: Easier to produce, low-cost, faster to market, and higher profit margins due to scalable duplication capabilities.
Cons: The market saturation creates hefty competition, and making a profitable digital product requires expertise in audience engagement and marketing that many beginners lack.
Although many are lured in by the ease of creating digital products, they pose significant risks for those new to business. They score a C-tier ranking.
2. Content-Based Business
Content-based businesses draw revenue from creating online content, such as blogging, podcasting, or making YouTube videos.
Pros: They offer multiple income streams, such as ad revenue and sponsorships, and foster community-building among followers.
Cons: High competition in this space leads to massive content saturation. Most creators toil away for free long before seeing any financial returns, making this a B-tier option.
While content creation serves as a learning tool and a way to build an audience, novices are encouraged to pursue this avenue concurrently with a more stable income source to alleviate financial pressure.
3. Service-Based Business
With little risk and low investment, service-based businesses emerge as the optimal starting point for beginners. They can generally be categorized into solo and agency models.
Freelancing
Freelancing can be broken down into junior and mid-senior roles. Junior freelancing does not require much experience, making it the best starting point.
Pros: Low barrier to entry, ability to sell time for services (like writing or graphic design), and the opportunity to learn valuable business skills and practices.
Cons: The hours worked may not translate directly into high pay initially, and finding clients can prove challenging.
Junior freelancing earns an S-tier ranking for beginners due to its accessibility and comprehensive learning potential.
Agencies
An agency represents a more complex model requiring a team to deliver service contracts.
Pros: Agencies can be highly lucrative, scalable, and facilitate taking on larger clients.
Cons: They necessitate prior experience in freelancing and managing a team, making them less beginner-friendly than solo freelance work.
Agencies typically rank in the A-tier for those who have transitioned from successful freelancing.
Conclusion and Key Takeaways
For novices thinking about starting a business, the service-based model—particularly junior freelancing—stands out as the best recommendation. Not requiring extensive experience or massive capital, it serves as an impactful entry point, offering invaluable learning opportunities that can pave the way for future endeavors in other business models.
By starting as a junior freelancer and gaining essential skills and insights, individuals can later branch into content creation or even product-based businesses with a more informed perspective.
In this journey, those eager to obtain more resources—including the detailed research underpinning this tier list—are encouraged to seek additional materials or guidance for effective business development as they embark on their entrepreneurial adventure.
Part 1/8:
The Definitive Tier List for Starting a Beginner Business
Starting a business can be an overwhelming prospect, especially for beginners who are bombarded with advice to leap into trendy models like e-commerce, dropshipping, or affiliate marketing. However, many of these options are not suited for novices. Instead, this guide presents a tiered list of business options designed to help those with little money and experience avoid wasting their time and funds on the wrong ventures.
Three Main Types of Businesses
From extensive research and personal insights, it becomes evident that all potential business ventures can be grouped into three major categories: product-based, content-based, and service-based businesses.
1. Product-Based Business
Part 2/8:
Product-based businesses involve the sale of tangible items or digital products. While they can provide substantial financial opportunities, they come with considerable drawbacks.
Physical Products
These include any commodities sold directly to consumers, such as furniture or clothing. Despite their appeal, this business model has a D-tier ranking for beginners due to significant capital requirements and high complexity.
The key points to consider include:
Part 3/8:
Beginners often discover that physical product businesses require extensive knowledge of logistics, audience targeting, and product fulfillment, rendering them high-risk ventures for those starting out without experience.
Digital Products
Digital products, which encompass things like templates, online courses, and eBooks, are viewed as better options than physical products. They incur lower production costs and require less time to create.
Part 4/8:
Although many are lured in by the ease of creating digital products, they pose significant risks for those new to business. They score a C-tier ranking.
2. Content-Based Business
Content-based businesses draw revenue from creating online content, such as blogging, podcasting, or making YouTube videos.
Part 5/8:
While content creation serves as a learning tool and a way to build an audience, novices are encouraged to pursue this avenue concurrently with a more stable income source to alleviate financial pressure.
3. Service-Based Business
With little risk and low investment, service-based businesses emerge as the optimal starting point for beginners. They can generally be categorized into solo and agency models.
Freelancing
Freelancing can be broken down into junior and mid-senior roles. Junior freelancing does not require much experience, making it the best starting point.
Part 6/8:
Pros: Low barrier to entry, ability to sell time for services (like writing or graphic design), and the opportunity to learn valuable business skills and practices.
Cons: The hours worked may not translate directly into high pay initially, and finding clients can prove challenging.
Junior freelancing earns an S-tier ranking for beginners due to its accessibility and comprehensive learning potential.
Agencies
An agency represents a more complex model requiring a team to deliver service contracts.
Pros: Agencies can be highly lucrative, scalable, and facilitate taking on larger clients.
Cons: They necessitate prior experience in freelancing and managing a team, making them less beginner-friendly than solo freelance work.
Part 7/8:
Agencies typically rank in the A-tier for those who have transitioned from successful freelancing.
Conclusion and Key Takeaways
For novices thinking about starting a business, the service-based model—particularly junior freelancing—stands out as the best recommendation. Not requiring extensive experience or massive capital, it serves as an impactful entry point, offering invaluable learning opportunities that can pave the way for future endeavors in other business models.
By starting as a junior freelancer and gaining essential skills and insights, individuals can later branch into content creation or even product-based businesses with a more informed perspective.
Part 8/8:
In this journey, those eager to obtain more resources—including the detailed research underpinning this tier list—are encouraged to seek additional materials or guidance for effective business development as they embark on their entrepreneurial adventure.