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Low-Risk, High-Payoff Self-Employment Ideas

By Marty Nemko

So many people would like to be self-employed, except for one thing: the risk.

Fortunately, some businesses entail much less risk than others. They avoid the six major sources of risk:

New idea risk. Many aspiring entrepreneurs think they must come up with a novel idea. That’s foolish. Why be a guinea pig for an untested idea when there are plenty of proven ideas that you could implement in a different location? Most new ideas fail, and you probably don’t have deep enough pockets to endure even one failure. If you want to be innovative, don’t worry. Even the most tried-and-true business provides plenty of opportunity to innovate, for example, in advertising, décor, motivating staff, and theft control.

Trend risk. Today’s hot idea is often tomorrow’s has been. Cigar shops were smokin’ in the 1990s and burned out by 2000. You want a business that has stood the test of time.

Large investment required. Last I checked, you weren’t rolling in dough. If you’re not and your business requires a large investment, it means you’ll have to mortgage yourself to your eyeballs. If your business gives you unexpected problems (and they usually do), even for a short time, you could find yourself out of money and into overwhelming debt. Fortunately, many good businesses don’t require a large investment: especially home-based businesses, service businesses, internet businesses, and cart businesses. (See below.)

Long time to profitability. Tivo is one of the late 20th century’s greatest inventions. Unfortunately, it took the public until well into the 21st century to realize it. As a result, Tivo lost $600 million in its first five years. Do you have that kind of staying power?

Competition risk. You want to go into a business with little competition unless you know you can quickly decimate the competition. For example, for decades, Blondie’s Pizza was the only pizza-by-the-slice place within a block of the University of California, Berkeley’s main entrance. The pizza was just okay. Enter Fat Slice, virtually across the street. The slices are not just bigger but better, and the place is brighter. Today, there’s always a line in front of Fat Slice and Blondie’s is moribund.

Five High-Payoff, Low-Risk Businesses

Of course, before starting any business, it’s wise to consult a professional to help you assess whether a business is right for you, but I believe each of these businesses to be low risk in all of the above areas yet offering solid potential to generate a good income.

A small chain of espresso carts. These are like Starbucks without the rent. In fact, placing your cart opposite a Starbucks and calling it “The Uncorporate Café” might work well. Certainly pick a location with great foot traffic: next to a bus or train station, in a large office building or hospital lobby, in front of a busy supermarket, big box store, or a stadium on game days, etc. Why espresso? Coffee drinks have a higher profit margin than cocaine. And carts cost so much less than a storefront. Plus, in the right location and run well, a cart business can generate real money from Day One. And, there’s no trend risk. People have been craving their caffeine fix for centuries with no sign of withdrawal. Other items that can be sold from carts: gift soaps, jewelry, soup. (I like names such as Auntie Barbara’s Soup and The Soup Nazi.) Worried about status? No one’s asking you to man the cart yourself. You ‘re the president and CEO of the Continental Cart Corp., with five branches to serve you.

Consultant to college-bound students and their families. The hysteria around getting into the “right” college seems only to be accelerating. It’s become almost de rigueur for upper-middle-class parents to spend thousands of dollars on a consultant to help pick out the colleges apply to, with applications, and with obtaining financial aid. This business requires little money to start, but be sure you’re willing to market, market, market. That could mean, for example, doing free workshops at suburban public and private high schools, as well as at places of worship in upscale areas.

Mission-critical repair. Newspaper and magazine printers can’t afford for their machines to go down during a print run. Yet these massive machines have many moving parts and are trouble-prone. That’s the sort of repair business that can be lucrative. Other examples: machines used in hospitals, especially in operating rooms, commercial airplane engine and avionics repair, parking meter repair.

Government contractor. The government is an excellent customer. The government pays its bills and often is less price-conscious than private sector customers. An excellent introduction to becoming a government contractor is at

Online Dating Consultant. For many people, nothing is more important than meeting Mr. or Ms. Right. And to do that, ever more people are turning to online dating. But they often struggle in writing their profiles and taking and selecting photos to post. That’s where you come in. Advertise on singles sites.

Advice I’d Give My Child

Ignore the conventional wisdom dispensed by MBA schools. They encourage people to tackle intellectually interesting innovations because they’re fun to discuss and because the professors aren’t risking any money. But in the real world, key to a business’s success is risk reduction. And above all, that means don’t innovate; replicate.

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