Biz Models With No Risk (Best For LEAN Beginners)

so you ever sit down and think to yourself I want to start a business but I don't know if I should quit my job I don't know if a thousand two thousand ten thousand twenty thousand dollars is enough to start a business I don't know if I should start a software company I don't know if I need to get investors I don't know if I should open a Jamba Juice or McDonald's or or maybe a build-a-bear I've been looking in the build-a-bear but I don't know how much money that's gonna take what business should I start and do I have enough money to start my business and how do I pay for my business and how long should I expect not to make money for my business and and should I just go and throw a pie at my boss there's so many questions that make starting a business very difficult makes a very confusing process for someone that doesn't understand the type of businesses you should start when you're starting off and the type of businesses you should grow into I personally believe what I'm gonna show you right here is the way that every single person should look at starting a business every single person except for Steve Jobs or Jeff Bezos they can do their own thing but every other person in them including you you should listen because if you do this this will allow you to start a business without ever taking any risk and allow you to hedge your bets and it will allow you to transition from a business model that has very little risk and a ton of upside to a business model that has high risk but gargantuan upside so I'm talking about hey a business model where you can start off and you can make a hundred thousand a month and in transition to a business model where you could make millions and even hundreds of millions by the end of it this is how it should work this is how it's done listen up so first off five uploads in five days you know what that makes this the cinco de upload [Music] okay yeah we're not we're not going back to jokes in this channel I'm not going back to pick at you ones these we've matured past that point what I want to show you in this video though I think is so critically important because honestly I just look at your comments I look in the comments in the common area and people are saying hey this is enough money to start a business and all the questions that I went through at the beginning of this which I'm not gonna recap because I'm gonna bust this one out in truly five minutes and if you don't have five minutes by all means go start a business without these principles you will lose your but almost everybody loses their but in fact we reason why most businesses fail and most people go bankrupt and most people lose all their money is this right here I'm gonna point out right here and if you just structure how you start your businesses the right way you have all the best at best world you have the best of you have the best of best work you have the best of both worlds you can start a business that has massive upside and very low risk and transition into like that passion business that you want that takes investment money that has a huge hundred million 1 billion dollar potential again without losing your butt or ever putting any money down on red so let me explain how this works so I was watching Sam ovens latest video it's about making decisions and he touched on something that I've been doing for years but I've never put into a diagram and he's fantastic at putting things in the diagrams I know we all think he's amazing entrepreneur which is true but I gotta say I think is I think his number one skill set is turning things and diagrams he's amazing at it quite the diagram ER anyways what Sam talked about the video was many many different things but he he laid out this one thing that I think needs to be specified a little bit more because the biggest questions I see when people get in the business it all has to do with capital and risk all has to do with capital and risk and what type of business to start and the thing is with most businesses most business models out there involve a lot of capital and risk and that's the last thing you want to do when you don't know what you're doing ok if I started a software company when I first got started I would have lost everyone's money including my money and I'd be homeless right now and I'd be one of those jaded people in the comments section well as nothing but time leaving weird comments about weird things and I'll leave it at that what Sam talked about in the video is called canceling out troughs and so basically when you go and start a business let's imagine this is profitability this is a line of profitability a lot of businesses worked like this you start your business off and then you lose lose lose lose lose money and then it swings back around and then you get to making money the thing is with most businesses this swing right here is around a hundred thousand dollars now for people who have experienced a digital marketing they're gonna scoff to say you don't need $100,000 to start business I know I've built an online business before if you look at most people's understanding a business though if they're going and thinking about starting a McDonald's they're going to thinking about starting a Jamba Juice I really want to start a McDonald's I don't know why but you go and look at most people's under saying this is what they think about business you have to go in the hole quite a bit and if you look at the most famous entrepreneurs out there they do this to tenth degree for example I drew who sent in a Dropbox they go they go hundreds and millions of dollars in debt or actually they're using investor money but you here every entrepreneur story out there raycrockett McDonald's for example going massively into debt barely can pay his bills just suffering the entire time and so most people think about business and they go this isn't this isn't for me how do I start a business with this type of model right here and then you also have people going up there thinking man to what how am I gonna fund this business I mean I need to quit my job what am I supposed to quit my job and so most people think there's gonna be this massive trough whenever you start a business and that's not really how you want to do things that's that's not how I did it that's not how most entrepreneurs I know did it that's not how even the billionaire entrepreneurs you know did it a lot of them almost always all of them hedge their bets almost all of them hedge their bets and you do this by building businesses that are the opposite of this but the reason you need to understand this is because you're gonna end up like the Lost Boys in Peter Pan I see so many entrepreneurs doing this they start their initial business that and there's plenty of business models you can do this in this is a type of business you should start and I'm gonna give you a list of them here in a little bit but what you can do is you can start a business where there isn't a downside it's just straight profit right away but the promise the businesses scale very poorly or they don't work long-term because the niches are super insanely competitive once you get to a certain point they're oversaturated or it's just not something you want to do for 40 years of your life it's just not something that scales very well and if you know these type of businesses right here what you can do is you can start this type of business first off and it can cover the cost of your down trough business so a perfect example of this right now that I'm doing you can see this live in action I'm actually doing what I'm talking about on YouTube go figure guru on YouTube doing that anyways um what I do is you might notice I have info businesses if you see any of my ads on YouTube which I know you guys love that you've got to stop the complements I know you guys love those ads but you got to stop you got to stop asking for more of them I will only serve you 50 of them a day okay that is that is the limit that is it that's all you get okay all right beggars can't be choosers so you might notice those ads those are my info business and I don't actually teach in my info business I'd connect I found two coaches who are fantastic at Shopify action credible Shopify hkm has more results than any e-commerce program that I've seen there might be one hiding out there does more results I haven't seen it however I found two people to put together an incredible program incredible coaching to get a lot of success and so that business model right there you got to think when you look at that business all it took was a kajabi website which is pretty much free it's like 49 bucks a month or 199 bucks a month starting I don't know the price it took me talking to two people and then it took Camtasia which is a filming software that's like a hundred dollars then it took a face of a group and some website hosting and of course add money and whatnot but if you look at the the required heart cost to start that business before you can start making money it's like 500 bucks and that business has done millions and millions and millions of dollars and so when you look at that business right there that is just cashflow positive day one there's there's zero wait time there's zero six months of doing anything prior to that it's just like hey guys let's make this course let's make it really good you may the videos I'll connect the ads I'll make the the sales pages let's get this info business going in boom we got a business right here that is super duper profitable now you can also see if you look on the flip side hi rose hi Bruce is not nearly as profitable our market hero which is turned into high-risk not nearly as profitable as H calm because as soon as I make any money there I go and invested back in business but when the business was first starting man it's just nothing but muffin men in the hole when I was first starting market here oh it's just money going out the door every single month there was no way I'd be able to start that business when I first started off because the hard costs alone would have killed me they would have bankrupted me I would have needed millions of dollars in investment money to start that business and on top of that even when I did I didn't have much experience when I first started market here so I built all this stuff and it wasn't even profitable because like no one wanted to buy it because I didn't know how to design a SAS product I didn't know how to deal with churn I didn't know the deal any of these things so you want to kind of compound the trough not only did it take a lot of money to start that company but it took a lot of money to learn how to be an effective CEO I still don't think I know what I'm doing however what I know now compared to what I know when I started holy-moly and so what I'm able to do if throughout my careers I've been able to generate lots of cash flow with info businesses because it's a very easy entry low barrier to entry business model but that's a hunt entire another problem in itself because if a business model is easy to enter it is easy for people to come and mess with your stuff it's easy for it to get oversaturated and competitive and it makes it very very hard for you to build a moat around your business which means let's say this is your castle and people want to invade your castle they want to take your cookies okay in an info business like H come for example very hard to defend because all it takes is a person with five hundred dollars and some good copywriting skills and a desire to make a great product which is actually really rear and info marketing but a desire to make a great product against people results and they can cross that moat pretty quickly now if you look at high rows you're gonna need you're going to need a team of Excel akan Valley developers you're going to need good CEOs you're going to need amazing product management you're going to need years of development time you're going to need a millions of dollars and a really really good understanding if you're gonna need a lot you're gonna need a lot to come with that that moat is pretty that mode is pretty long you're not gonna jump over that you're not gonna hop skip over that you're gonna have to go through hell on earth and in fire and then the final boss of Devil May Cry to get to that castle okay cuz Virgil's is Virgil's a you ever seen that guy oh alright but you can see the difference right there because that business model has that I can really scale that very quickly and because of the infrastructure behind how a SAS product works insurance I can I can exit that company for potentially okay imaginary numbers a billion dollars so you can see that that SAS company right there what has a very deep trough that's like going and putting your money this is a really bad analogy but putting your money on like red 32 in Vegas I don't even know if that's a that's a bet on roulette but the odds right there if you win at that you goes to the moon but you can see right here with an info product business right here eventually what's going to happen is info product businesses it's really hard to scale these to the moon you can see examples like that with like title Lopez and like Tony Robbins and like some other info marketers but you can see just how saturated those markets are and on top of that you see a lot of people in info marketing they start with their initial business and it's like a lost boy from Peter Pan it's like dude you've been doing this for two to three years maybe it's it's time to you know like going go and try and build like a substantial like really cool business a software business kind of like a Jeff Bezos type business maybe it's time they go and take that shot instead of constantly sticking that so I'm not hating on anyone doing info just my point of view and the reason why I do this is because I want to take the big shots I want to build the Empire when I build an Exim I want to build the next slack I want to build the next intercom I don't want to be the next info marketer super preneur okay I don't want to be the next Frank Kern or ty Lopez or any of those I don't wanna be the next Gary Vee that's not what I want to do okay I want to build the next intercom or slack or something like that and so that's what's really cool to me and I see the real potential is the business models so backing up to all this I want you to see my thought process you can understand how to take this back to your business so knowing that I'm able to go and counter off my really deep trough with a cash flow trough and so what happens is usually and I don't think I'm not gonna be killing H coming anytime soon but what you're gonna see in a lot of entrepreneurs and this is a model actually my first business that I use to start actually market here o and H comm is you can see that you can go out there and you can you can counter out the trough without ever really risking anything and as soon as it's ready you can kind of crisscross them so last example before I start talking about you with one of my first businesses I had an SEO business we've sold services we sold info procs anything SEO SEO really wasn't my passion though but that business had no barrier to entry no barrier to entry you took a blog and it took posting on the warrior forum to start getting clients for the SEO business absolutely no barrier to entry and so what I was able to do is get that business to a substantial income but there's no way I could ever keep that business going for thirty years there's just no way and that business had no potential getting to 100 million 200 million 500 million and so I was able to take that money and easily without ever ever going in the red without ever being stretched without ever taking investor fund my software company which the trend went more like this actually went more like yeah and that's how that went but I was able to go out there without ever without ever taking any risk without ever taking any investor money and so that's how you have to look at your business to what you want to be looking at when you start your businesses or when you're quitting your job is you want to look at this trough model so let's look at a more normal situation where you're not starting as entrepreneurs so let's imagine you got your job right here okay so this is the line of profitability so the line one right here I'm not gonna dot-dot-dot it just use your head and follow along but let's imagine this is your job so this is a this is great because there's no barrier to entry and you can just get to like let's say your job pays you forward a 6 K a month this is pretty stable and this is just gonna be in here right here but the promise this thing is never going to go like that it's never going to do that and it's never gonna allow you to do all the things you want to do so when I was starting my first business that when I told you that was very cashflow positive I was actually I was at first I left a military saved up money and so I you that that an initial money from the military to build my first like upper trough then when I did as I moved to College Station Texas and started building that business I started doing SEO stuff and whatnot at that time but I wasn't very successful at first but I got to a good income like four to six K per month I was doing all sorts of various things like I was also working at a bar and in doing I got fired from that bar job don't ever hire me to be a bouncer at a bar cuz I just a skinny guy I don't I don't think I could ever get anyone to stop doing anything bad ever but whatever but I was doing all sorts of other things to generate side income laws building my business so even while I was making money for my business I was still working and doing doing jobs and that's again the trough model right here and even when I was making 4 to 6 K a month or even getting closer to 10k a month from my sto business I still want to get a job at a marking agency so I made a double trough okay so I had my marking today and you see I was an SEO manager there so I was making money from that and I was making money from my SEO business and what you need to think about let's take this back to maybe you you got your job right here but when you start your business there's probably gonna be a few months where you're not making any money and you need that money to pay your rent and stuff like that because I mean whoever whoever saves up a few months income and is financially responsible that's that's hogwash there's why get cheap rent and live off like 500 bucks a month when you can get a nice apartment and be successful anyways you're probably gonna need money during that time span and so what you do is you counter off starting your first business which should be a cash flow business with your job and so that cash flow business should actually have a pretty small trough so you should be able to do it pretty quickly so what I suggest doing is you don't cross the line of profitability what you do with your job as you cross right here okay you cross right here so you're gonna kind of quit your job and in boom in your business kind of takes over at least replaces your income I didn't quit my marketing any - job - I was breaking twenty thousand a month so like that's the thing you got to understand about entrepreneurship people are always putting it out there like Eli must he goes and puts a hundred million down on red which is Tesla and SpaceX and you think every entrepreneur out there is taking out their life savings selling their car and jumping off a cliff I was I literally did it as as hedged as possible same thing with Bill Gates same thing with a lot of billion-dollar companies same thing with a lot of the Airbnb get like the Airbnb guys hedge their bets to hell they didn't really go all-in until they like clearly had the business model working it took them years to really get it going because they were just they were hedging their bets so damn hard so what you need to understand is this is what you kind of want to look at and so what type of business model should you start when you're doing this you should start either a consulting business ok very low barrier to entry ecommerce business Shopify fantastic example I would suggest you pick up h com1 because i would like your money let's just be transparent here too because it gets fantastic results in three because ecommerce has a really steep learning curve it has a very steep learning curve and that's why i was just picking up a course of some sort I would suggest ARS if you care about results but whatever just pick any one of the dancing gurus on YouTube they all have courses anywho I would suggest doing that or I would suggest doing in foreign or ship which is great these all have no barrier to entry there's a few other models out there like SEO and whatnot but I would fall into these ones right here if you're gonna do consulting I'm just gonna give you recommendations right now for where to go get down there standing I would not I would not suggest going out there and trying to piece together everything what I would do is I would join a program or an education program that has a community with it that's that's the best thing because you want you want it you find a program that has substantial results and it's a community to trigger your competitiveness and also give you mentorship along the way if you're doing consulting Sam Evans course Barr not just don't even look at any other consulting I mean you can if you want I know other good consulting courses Sam Owens course just has a super long track record and it's gonna teach you how to think if you're gonna do ecommerce I would look at H comm because the most importantly you when you're starting off I'm not gonna tell you to buy my programs or H comm I'm gonna tell you though what you want to look for is won't requirement is you want to be taught how to think as an entrepreneur you that's the the most important part you getting success is knowing how to think you're not going to think that you're gonna think it's gonna come down to some tactic no you got to know how to think learn discipline and really change from the inside out if you're looking for how to start an info marketing business Russell Brunson's courses are phenomenal dan Henry has a really good course it's about $5,000 though and ok so I just gave you a bunch of courses that are two five thousand dollars making this trough deep as hell those are what you should look into and if you're just getting started you don't invest any money in courses all these also have refund guarantees by the way so like take a bet on yourself come on but and really does this touch that real quick it cost like a million dollars open to McDonald's they call it's like there's there's this business model called booze buddha juice out there it's weak it just a damn juicer and a shack and you make people's juice it's eighty thousand dollars college education fifty sixty thousand dollars the fact that people are like I don't know if I'm investing the two thousand dollar product with a lifetime guarantee what bet are you gonna take in your life like when are you actually gonna like bet on yourself what are you waiting for on that so that's that's my only point right there but if you don't want to invest in courses and stuff like that you want to be a cheap bastard which that pattern by the way in the same moment said you're gonna see that he talks about patterns being a cheap bastard doesn't bet on himself and resists even low risk investments that that pattern for example has a very low success rate so again what I would do is I would very much look into the one of these business models right here because these are the best places to get start out they have very low troughs and you can start making money very quickly from there's no six-month learning curve like for example and market hero it took a year before we were even selling anything okay that's not that's not sustainable and that's not something you want to do so now backing off from this what you're gonna be able to do with these business models once you get them down and these are the ways that most people get started and by infopreneur ship I want to clear up this doesn't mean making make money online courses you can make an info product at just about anything okay I know a guy that does millions of dollars a month helping people learn how to get more clients as an accountant it like it doesn't have to be make money online so what you can do from this is now you got this you got this first trough master right so that you were able to cover the time when you're building us and so you just took off are it great but what's gonna happen is a consulting business doesn't scale because you can only have so many clients an e-commerce business where your drop shipping doesn't scale it does scale but it becomes very hard because drop shipping products have shorter lifespans what does this mean okay so if you want to make $10,000 a day you can do that with drop shipping you wanna make 20,000 50,000 there's people to do that that being said if you want to have a product that lasts for a really long time and something that lasts long time you want to start building that moat you want to start building a moat type business and so we want to transition to at this point in time is moving towards moat type businesses we want to go out there and if this is our castle the problem with consulting the problem with all marketing the problem with drop shipping is your moat is about as thick as this line and I'm drawing a lot around it in order for you to be really successful so I want to buy your business and free not we want to get burnt out and for you to be able to scale really well you need to have a moat that's gargantuan okay you need to have a moat that is absolutely huge so this is the distance between anybody screwing with you so for example nobody can screw up Jeff bezels because the moat is like 30 years it's it's ridiculous no one can really screw with Sam ovens info product because the moat between the branding is built and everything is gargantuan no one can really screw of high roast because you just kind of have to punch yourself in the face for three years and by all means that do that just just go do that and have fun with that that's what you want to have if you look at SAS companies for example they're very unprofitable at first but the moat between them and competitors once they get going is huge it's so hard to go out there unless you have really good funding and a really good team and a lot of experience in a giant mode you're gonna mess with a SAS company that's well built so you want to start looking at how can I build these businesses because these businesses right here can scale because you can have a unique selling proposition if you have a consulting business you have a drop shipping business you have an info business your unique selling proposition isn't that great you have to be just outrageously good at for example if you go and take H calm and you compare it to any other shop buy courses out there my moat between that is that I'm much better at running ads I'm much better at copywriting and I'm much better at putting a team together to build good products and other people that's the mode there's no moat from stopping anybody to making a apples-to-apples Shopify product to compete against me there's a giant moat for someone to make something like hire us though so you want to start thinking about these businesses because once you have something unique then you can really cling to that and scale it and so what you want to do is you take these business models right here and if you're doing e-commerce drop shipping maybe it's time to start a supplement okay and everybody and their dogs doing that so maybe it's time to like start making your own prog maybe making your own coffee maybe making one of the various things that's MI making your own desk making your own cars your own red light therapy or hyperbaric chambers pretty creative guy right here maybe that's what it's time to transition into and that right there is going to have a huge upfront cost if you're doing consulting maybe it's time to make a SAS product for your market since you understand it really well maybe it's time to start selling a consulting product that teaches the businesses how to do it I know a guy Chris Winters who does he does millions a months doing that ok that's what he does he's held them directly to businesses if you're doing info maybe it's time to go like russell brunson and start a SAS business ok most of Russell Russell Brunson was a millionaire before this but his net worth didn't break hundreds of millions of dollars until clickfunnels and so this is what you want to think about and if you already have a business model you should really be thinking about this right now if your business is working what I see so many entrepreneurs doing I did this is you get stuck trying to play with this trough right here and you keep trying to rev it up it's like a card it's that's it's engines not gonna go and you just keep trying to break this Barre and it's not gonna work and so I really feel for people when I see them like what are you gonna do so make money online courses for the next 40 years of your life is that is that the plan are you gonna are you gonna consult for businesses for the next four years your life are you gonna sell drop shipping products from China for the next before is this gonna be stable for the next forty years of your life probably not are you gonna exit this no because no one's gonna buy those businesses they're based around you are they it's not that they're bad businesses but they don't go past this point right here and it's not something that is sustainable it is something that takes a lot of energy to sustain and you need something that can gradually once it gets off the ground it will take off so it's about time to start thinking about alright what I'm gonna do is we already killed this job one right here it's time to start another trough and so while this one right here is stable you can go really deep but the thing is this is covered so let's imagine you make let's say four million dollars from this business right here okay I got this business one of mine too like four million dollars here I mean this is good coconuts if you just want to stop there by all means but again remember it's not gonna be stable and if you want to go on vacation guess what's gonna happen you want to make a new lifestyle you want to live fancy-pants McGee okay I like for example I've had plenty businesses where I'll do for six mill and you want to take the private jet pictures and stuff like that I can afford that but it takes money to sustain that okay not I don't only spend like five percent of my income I'm out there being irresponsible with it but I'm saying if I want to live at a income level where it takes me thirty thousand a month to live twenty thousand a month to live and I'm making say two hundred to five hundred thousand a month if I stop doing that two hundred to five hundred thousand a month that decline is pretty quickly you start seeing the ticking time-bomb you know ten years in the future you're gonna have to start doing it again it's not gonna be like a 10 20 year stable thing that's what I'm trying to point out right there okay so you you need to understand this thing's not gonna be sustainable the second you stop doing it you know you're not gonna have any choices and you're gonna be locked into it and frankly a lot of people they're entrepreneurs you want to build that big iconic business once you get to this point you're not gonna care so much about money like I don't care I got enough money I got enough okay I got enough I don't I don't need to buy any more okay and so what my whole purpose is and what gives me way more happiness than making money is building that iconic business that that's that's what it's all about that's the most fun you can ever have in entrepreneurship and life in general in my opinion so what am I gonna do I'm gonna build that iconic business but I'm also gonna do it while covering my butt okay I'm not gonna go and bet everything I've ever made in my entire life in comfort on the business now I'm gonna bet a lot on it but if I'm gonna put two million dollars on red I'm gonna have to million dollars excess cash okay and so while you're going and building this business you're gonna go deep this time and it's gonna be hard and frustrating in a much longer fight because you're doing all sorts of things that are very intimidating but you're when you come out of this if you if you come out to this point right here this is the point where you go to the moon this is the point where you go from being a person making four million a year to person's worth three hundred five hundred a billion dollars and what's gonna happen is this entire time you're not let me kind of reverse this a little bit because what its gonna look like is you're gonna get to this point right here and then you're gonna kind of stick around this point so let's imagine this is like the one to two years where it's nothing but hard costs and you kind of get to like break even but every time you go up you're gonna go back to break-even again because you're gonna just keep reinvesting in the business and what this first business model allows you to do is when you get to this point you're you can you can still have em money coming in versus getting investors this is my investing strategy okay I can't easily go down the Silicon Valley and give away thirty forty percent of my company for a couple million dollars or I can just make the millions of dollars myself and keep all my ownership and control my company I much rather do this than running around going to meetings and convincing people that I have a good idea I know I have a good idea we'll see if I have a good idea but that's my strategy right there and so instead of going and getting investors I cover those costs right there and also have enough money to live and also have enough money to hedge my bet and so when I get to this point right here I'm never taking a substantial risk the trough is always covered and how my trough actually looks is if this is let's imagine this truth right here is two inches my trough up here is four inches so even if I completely lose I'm still halfway and you think laughs don't you want to go all-in sure but as a CEO when you're starring one of these type of companies is much more important to be able to fund the people building the company which is the engineers and one and so eventually what happens as you go to this point right here and then it takes off and at this point right here we've done the same exact thing now I'm not planning on killing H comm or anything like that I'm not saying that but you can see how this listen haier diagram right here works it's way better than Sam ovens diagram I take back his diagramming skillset you can see how this right here allows me to first off go from working a job to having a successful business without ever taking risk without ever taking risk and you can see how it allows me to take some really ballsy shots so for example market hero it's made money it's very profitable right now that being said the first few years then it work too well because I'm taking shots in the email marketing niche which is really expensive to get into and has competitors like MailChimp I'm not going and competing against some youtuber I'm going and competing against MailChimp okay like the owner of that is a billionaire so I'm like oh I'm gonna go I'm gonna go take shots of this billionaire but this allows me to do crazy like that without ever taking a risk that allows me to build a company it didn't really work at first and lost a lot of money at first without without any change in my life and also being able to focus on business because I have the money to fund it so I just want to point this out and really dig down a little bit more on what Sam talked about cuz I think it's super important and that's why I made the video so hopefully enjoyed this and what I want you guys to do as well go below like this video and leave feedback what do you guys want me to talk about in these videos because what you guys leave in the comment section heavily influences what I make videos about and so I think you understand how comments and feedback works so go do it [Laughter] [Music]

Channel: Alex Becker's Channel

Views: 106,594

Rating: 4.9342341 out of 5

Keywords: alex becker, start a business, how to start, how to start a business, entrepreneurship, how to make money, how to make money fast

Id: XuNaJPvCu74

Length: 31min 58sec (1918 seconds)

Published: Tue Aug 20 2019