Many people think starting a business is a very difficult and involved process. You have to think of a brilliant idea, then figure how to implement that idea before anyone else does. You must have a ton of capital to get the business started and it might take years and years for the business to make money. In reality, starting a successful business does not require a brilliant idea, a ton of money, or many years. Although, having a brilliant idea, time and money does not hurt.
With today’s technology, it is easier than ever to start a business. There are online businesses that make millions of dollars a year and have no physical product or store. The ways to make money with a business are unlimited, but too many people think the process is much harder than it is. A brilliant idea is not needed to start a business, because there is often room for more than one company in a given niche. Many times competitors are not doing things as well as they should and you can be successful by taking old ideas and implementing them better. Even then, starting a business seems like a massive process. That is why I think real estate offers one of the easiest ways to start a successful business.
What is a successful business?
I think too many people get caught up with what they envision a business as. They think of physical stores, restaurants, law firms, dentists, etc. But there are many businesses that can be started fairly cheaply and quickly. You don’t have to have a brilliant idea to have an awesome business. Owning rental properties, flipping houses, or being a real estate agent can all be successful businesses. To me, a successful business is not just about how much money you make, but how much time you spend working and if the business can run without you.
The idea of success will also vary based on what someone’s goals are. $3,000 a month in passive income might be considered a success to one person while making $500,000 a year in profit might be considered a success to someone else. I think too many business owners get caught up doing all the work in their business and cannot take a vacation or time off because things will fall apart. Whether your goal is $500 a month in extra income or $100,000 a month income, you have to think about how much time it takes you to work in your business and if you can take a vacation without the business falling apart.
A successful business should be able to run by itself for at least a short period of time. If you have to work all the time then you are working a job, not running a business. If you are making $100,000 a month you may be able to justify the work you put into the business for the tremendous rewards. However, couldn’t you also hire someone to do more of the work you are doing? You would make a little less money, but have less stress and more time. When you start your business make sure you remember why you started and don’t get stuck doing a job every day.
To learn how to use mindset and attitude to make yourself more successful, check out: How to Change Your Mindset to Achieve Huge Success, my book on how to become more successful by changing the way you think.
Why don’t you need a brilliant idea to start a business?
I think too many people get caught up in thinking of an idea before they start a business. Most never start a business because they never come up with that fool-proof idea that makes them millions. You don’t have to be an awesome inventor or have an awesome idea to be a success. In fact, many of the people who invented some of our most used items today or had brilliant ideas for businesses did not make much money from those ideas. It was not the person or company with the brilliant idea that made the money, it was the person or company that figured out how to monetize that idea by marketing better, making the idea better, or simply running their business smarter.
Instead of wasting years trying to think of a brilliant idea. Start a business now that you enjoy and you are knowledgeable about. Even if you do come up with a brilliant idea for a product, do you know how to produce it, market it, and where are you going to get the capital to bring it into reality? The simpler the business the better and the easier it is to get started.
What is an easy business to start?
I am obviously biased because I have multiple real estate businesses. However, I have a lot of experience starting businesses and real estate businesses are pretty simple to start and can be very profitable. Below is a list of real estate businesses that can be started easily and make a lot of money.
- Rental properties: Buying a rental property is an awesome business. Many people do not think of owning a home as a business, but rentals, produce income, have a relatively stable value, and are easy to finance.
- Flipping houses: Buying flips is harder than buying rentals, but it can still be a great business model. Buy low, repair, and sell high is the simple formula to make money flipping.
- Real estate agents: Most people consider being an agent a job, but it is a business. Most agents are self-employed and should think of themselves as a business. It is also very easy to start a team, who can sell houses and make the head agent money with little work.
- Wholesaling houses: A wholesaler finds deals on houses but it takes much less money to start than flipping or buying rentals.
Buying rental properties probably won’t make you a millionaire overnight. This is not a get-rich-quick business, but it is a very profitable business and passive business if set up right. The trick to having a successful rental property business is buying properties below market value, with great cash flow, that produce great cash-on-cash returns. Many people think you must save for years to buy a rental but it is possible to buy as an owner-occupant with a low money down loan and then convert that property to a rental later on.
The really nice part about rental properties is you can hire a property manager who will do almost all of the work for you. Buying rentals can be expensive since most investors will have to put at least 20 percent down. However, there are many options to buy rentals with less out-of-pocket cash. They can also be hard to finance if you have multiple properties, but they are still easier to finance than most businesses.
The really nice thing about rental properties is they are a valuable asset even if the business makes no money. If you start a business that fails and makes no money, you probably will have nothing to show for your work. Not many people want to buy a business that loses money. But rental properties have dual purposes especially if you invest in single-family homes. You might buy the wrong property that can’t cash flow because your loan was too expensive or the market is not conducive to cash flow. You can still sell that property to an owner-occupant, who doesn’t care what it rents for.
Flipping houses is another great business that can be started fairly easily. You don’t have to quit your job to flip a house and you don’t have to spend all your time working on the business. The secret to flipping houses is buying them cheap enough to make money after accounting for all costs. Most of your time in this business should be spent finding deals, finding the right contractors, and making sure those contractors do a good job.
I personally love flipping houses, but once you flip a house you will not make any more money unless you find another house to flip. I like to take much of my flipping profits and buy rentals that will produce ongoing income. It can be tough to finance flips, but usually, it is easier than funding another type of business. You also have a hard asset that will be valuable even if you screw up and lose money on the flip.
Flipping houses is a less passive business than owning rental properties, but it can be set up so the business owner is not working all the time. I have contractors that do all the work, I have a rehab manager who manages those contractors and I have other team members who allow me to focus on buying great deals. Again, you can flip houses by living in them as well and slowly fixing them up. If you stay there two years before selling the profit might be tax-free!
Real estate agent
Being a real estate agent is running a business. Many agents do not think of it as a business but real estate agents are self-employed and you can run a team just like a business. I used to run a team in another brokerage and now I own my own brokerage. Whether you are an individual agent, run a team, or run an office, you are running a business! You don’t have a direct boss in most cases and must manage your time and expenses. There are ways to expand and scale if done correctly.
Even if an agent does not have a team, they should act like a business. You should have a marketing budget, keep track of expenses, and try to build your business so it can run without you. That might mean hiring an assistant or partnering up with other agents who can help with your business when you can’t be there. Being a real estate agent may be the easiest business to start in real estate because you don’t need good credit or a lot of cash to buy a house. You need to get your real estate license and join a brokerage to be an agent.
The problem with being a real estate agent is that most agents do not have plans, goals, and the training needed to succeed. They put the time in “at their job” and assume they will make money because they are working. As a business owner and real estate agent you have to spend your time wisely and not just put your time in. You must do the right activities that make money and real estate agents can make a lot of money when they work smart.
Wholesaling real estate
A real estate wholesaler finds a deal, gets it under contract, and then either assign the contract to another investor or they use a double close to sell the property without using any of their own money. The wholesaler does not repair the house or need a loan, and they can make a decent living or create a thriving business.
Wholesaling is often taught as the easiest way to invest in real estate without much money but I don’t really consider it investing I consider it a business. It is also not as easy as many people make it out to be. It takes a lot of work to learn how to find deals, how to find buyers, and how to figure out all of the paperwork. Having said that, it is a relatively easy business to start compared to other options out there.
Starting a business can be very scary. It takes money, time, hard work, and a lot of planning to do things right. I think real estate is one of the best businesses to be in and can have some awesome rewards versus the risks involved. Even if real estate is not a business you want to be in, make sure you remember why you started a business in the first place. Whether it was for freedom, passive income, or something else. Too many business owners get sucked into working in the business and creating another job for themselves.