Small business ideas that actually work
Find a business idea to suit your background, budget and skill level. And get tips on how to get it started.
Starting a small business is a popular move for those who like to call the shots in their working lives. And with the growth of digital work tools, the list of accessible business ideas is longer than ever.
Benefits of starting a small business
A small business can be a great way to take control of your working life. You get the satisfaction of building something from the ground up. You have autonomy over how the business is run. And you may even get to set your own hours.
Just keep in mind that business ownership commonly involves more work than a day job. Income can also be sporadic and unpredictable in the first years. You need to choose a small business idea that suits your personality, your skills, and your financial situation.
List of small business ideas
Here are some popular ideas and business models that people are trying today.
You don’t have to invent a jetpack or a flux capacitor. Maybe you’ve created something a little more modest, like a new and improved back scratcher or bottlebrush. You can hire designers to create drawings then use contract manufacturers or even 3D printers to make your inventory. Online retail and digital marketing make it easier to target really niche customer groups, such as people with itchy backs or filthy bottles.
Many of the products or services that you love are probably offered as franchises. To open a franchise, you pay the parent company (franchisor) to open a store, depot, workshop or office in their name. They give you access to their branding, their products, and any trade secrets you may need to run the business. They may also support you with key business advice or even finance. The amount of money you pay and the level of support you receive will differ widely, depending on the franchise. There are franchises for everything from restaurants to consulting to leasing to window washing. Learn more about franchising.
If you’re a skilled typist and have an excellent ear for what people are saying, transcription could be the small business idea for you. This could include writing notes from recorded meetings, working for a local court, or providing closed captioning for television and movies.
As more entrepreneurs and consultants move into online working arrangements, there’s a growing need for virtual assistants. You’d do all the usual things like managing schedules, setting up meetings, taking notes, reading and responding to emails – but you’d do it remotely. This is challenging work, but it can pay well, and it’s very rewarding when you build a good relationship with your client.
The cleaning sector is a growing opportunity for startups, especially as residential and commercial customers seek out environmentally sustainable providers. What’s more, it can be relatively cheap to start a cleaning business. If you’re a good planner, with high standards and you can maintain a good reputation, you’re well on your way.
Coffee cart or food truck
Hospitality can be extremely competitive and challenging but also rewarding. You get to feed people in the literal sense, but you can also add to the sense of community in a neighbourhood. Starting off in a truck or cart will help keep your overheads lower.
Catering is a great small business idea for talented cooks or bakers. You don’t need a whole restaurant. You can get by with a nice clean kitchen. And you typically work from advance orders, which means you can plan your inventory and workflow accordingly. Plus you may be able to focus on certain niches, like house dinner parties, office events, pastry mornings, order-in sandwiches, and so on.
You can set up an online store pretty simply these days. A Xero survey found they’re cheaper to run than a bricks-and-mortar shop and return fatter margins in those crucial early years. You can sell your own stuff or stock known brands. Learn how to start an online business.
Dropshipping is a form of online retail where you don’t have to handle the products you sell. You simply populate your online store with pictures and descriptions but the goods themselves stay in the manufacturer or wholesaler’s warehouse. When an order comes through, you send it straight to them to pack and ship to your customer. You don’t have to sink tons of cash into inventory, you don’t need a stock room, and you’re freed from logistics. This simplicity makes it a good small business idea for beginners. Although you can get caught in the middle if there are supply issues, or if your customer needs support with their new product.
Sell a digital product
Digital products include things like songs, jingles, images, videos, templates, ebooks, and anything else that you can send to a customer by email. As with dropshipping, a business that sells digital products is fairly light. You don’t need storage or logistics. You will, however, have to create worthwhile digital products, or buy licenses to existing digital products.
Affiliate marketing is a popular form of income for bloggers. By referring your readers to shopping sites, you can get a small cut on any purchases they make. You first need to build up a sizable audience and it helps if your blog has a theme that naturally connects to certain types of products. Examples might be blogs about travel, woodwork, parenting, gardening, cooking, or crafts. Affiliate marketing is a long game, for sure, but some sources suggest average annual income approaches US$60,000 per year.
Got a ton of energy, lots of willpower, and some motivational skills? Then you could help people pursue their fitness goals. It pays to know how the body works, so you don’t injure or endanger your clients. But with the right approach, you can improve people’s health, vibrancy and confidence, which is a great way to make a living. There are lots of different types of customers, young and old, with a wide range of fitness goals. There’s bound to be a niche for you.
A life coach (or wellbeing coach) helps people find balance and fulfillment in their lives. Oftentimes, clients feel stretched between the demands of family and career. Or they sense they’re so task-oriented that they’re missing the bigger picture in life. A life coach can lead them through exercises and discussions to develop new perspectives and hopefully improve their sense of contentment. The journey can move clients to make big changes in their lives, so this career shouldn’t be taken lightly. You can take courses to start building up your skills.
For those who are good with tools and who enjoy fixing things, working as a handyman or a contractor is an excellent small business idea. Handyman skills are always in demand, no matter where you’re located.
Landscaping and lawn care service
People love their green spaces so why not be the person that cares for them? Most landscaping gigs comprise mowing, pruning and weeding so you probably won’t need a ton of skills to get started with this small business idea. However, clients may eventually ask for your advice on trees, soils, watering systems, fertilisers and so on. You’ll need to get some training if you want to grow your business by offering that sort of advice. There are lots of niches to target. You could be the gardening contact for private residents, landlords, summer homes, commercial spaces or even public spaces.
Do you know a trade like carpentry, joinery, plumbing or electrical? There’s regular demand for new housing and, even when there’s not, people will want to renovate their old home. Either way, someone has to do the work. Construction has lots of niches. You could be the door-hanging contractor, the staircase maker, or the patio person just to name a few.
Manufacturing, engineering and fabrication
Skilled engineers, builders and welders can grow boutique manufacturing businesses. Equipment and materials can be costly so try to identify a local niche that allows you to focus on a few core products or tasks. You might pick up contracts building components for other businesses in the area. To make this business idea work, you’ll need to be a good communicator in order to understand customer requirements. Some design or drawing skills will also be handy.
Households and businesses both seek advice from independent experts. Maybe you can offer (or acquire) some valuable skills that they’d pay for. There are many options. For example you could become a residential interior designer or home-budgeting guru. Or you could find work serving local businesses as a project manager, a researcher, or an editor. Explore what’s needed in your community then develop and market your skills to meet that need.
Business advisor or troubleshooter
If you've been working in an industry for a long time then you can become an expert advisor. In this role, you’d help up-and-coming businesses identify new opportunities, overcome hurdles and unlock growth. You'll do well if you’re experienced, analytical and a good communicator.
An increasing number of small businesses feel they need a website but they don’t know how to set it up or manage it. You could take that off their hands for a small monthly fee – promising to keep their site secure, implement content updates, and provide some SEO (search engine optimisation) services. You could expand on this small business idea by adding ecommerce and digital marketing services.
Digital marketing can be a super affordable way for small businesses to reach niche target audiences. However, very few business owners understand how it works. Cue, you. As a digital marketer could step in to run small social advertising or search engine marketing campaigns.
A good writer can pick up a variety of gigs writing for businesses. Common jobs include writing websites, corporate blog posts, emails, articles, social posts and ads. You might even get to work on taglines, product names, or whole advertising campaigns. While there’s a good mix of things to do, it’s not a bad idea to specialise a bit. The faster you get at certain types of work, the higher your hourly earning potential.
Designers can pick up all sorts of work, depending on their specialty. You might help lay out newsletters for local government, design awards and certificates for schools and sports clubs, help small businesses with websites, flyers and business cards, or pick up overflow work from agencies. Build up the right sort of online portfolio and your good work will win you plenty of new opportunities. But you need to get good at time and cost budgeting so sharpen up those skills now.
Photography can be a good small business idea for visually-minded creatives. It’s worth noting that the stakes are generally high as your photos record key events like weddings and award ceremonies. You’ll need the right temperament to succeed. Equipment can be expensive but if you’re a keen hobbyist, you may already have made those purchases anyway.
Opening a clothing boutique can be a fun way to enter the fashion industry. You might recycle clothing, resell second-hand clothing, or import certain types of hard-to-find garments and labels. In particular, the second-hand market continues to grow thanks to eco- and cost-conscious consumers. This could be an online business idea, a physical store, or a little of both.
Have you thought about creating your own label? There are lots of specialist categories to target, like sportswear, maternity gear, fair trade, baby wear, sustainable clothing and more. You can make them yourself or get contractors to follow your designs. Start out with one or two lines while you test the market’s appetite for your products.
People like to feel good about themselves so there’s always a market for beauty products. There are some big players in this field already, and lots of celebrities now have their own lines, but there are still niche opportunities. Not everyone wants mainstream products. Consider developing a grooming or beauty philosophy of your own then curate a list of products that fits. You could make some products from scratch or source them from craft suppliers.
There are already over 1 billion pets worldwide, with ownership growing amongst millennials. Some pets need more attention than others, so there could be pet-care opportunities in your area. Dog walking or grooming are popular but there are other opportunities, such as caring for pets in their home when owners are away on holiday. You could also retail pet accessories as part of your business.
Podcasting can be a lot of fun and may even generate income. Just be aware that there are already thousands of great podcasts out there and many are done by media pros. Your best bet may be to find a niche topic where you can offer really valuable insights, then use your podcast to sell extra training or educational resources. In this respect, podcasting may end up being more of a marketing platform than a business.
Print-on-demand is a low-risk way to create and sell merchandise. You can market your funny cat poems on mugs, cushions and calendars then - when the orders come flooding in - a third party printer does all the work. You don’t need to buy any of the gear, which makes it a fairly inexpensive small business idea.
The other side of print-on-demand is to buy your own kit and offer printing services. You could then take orders to print custom Christmas cards, wedding invitations, flyers, or t-shirts. This business will work even better if you can offer design services too.
Teaching online courses
If you have an area of expertise and you’re an excellent communicator, online teaching could be a great option. Websites such as Udemy have made it simple to teach your own course online about any number of topics. The demand for these services is high in the wake of Covid-19, and many users enjoy being able to set their own pace of learning.
In-person tutoring is a great way to make some extra money while helping people. Tutors can work with learners from early school entrants right up through university students, so there is always a wide customer base to work with.
People learn new languages all the time, and you can teach them. You don’t even need to know any languages other than your own (although it helps!). You’ll need to be patient and encouraging as some of your students will naturally struggle at times. There are dozens of training and certification programs to give you the skills you need. Helping people to communicate in a new country can be incredibly rewarding and important work.
You can work as a nanny or au pair with one family at a time, or find a space where you can support multiple families at once, such as by providing neighbourhood after-school care. Do your homework on health and safety or licensing requirements if you decide to care for kids outside of their family home.
With the right coding and UX skills, you could work as a freelance app developer. You can pitch for work from businesses that need apps developed, or you could pick up overflow work from app development agencies. You can even work on your own tech business idea on the side.
List of side hustle ideas
Just about any business can start as a side hustle. In fact, experts say side hustles are more likely to grow into successful businesses. The side-hustle ideas outlined here are ones that are easy to fit around a day job, for supplementary income.
Join a focus group or take surveys
Marketing companies often recruit people to sample new products or answer questions about their buying habits. You might get to try new food for a restaurant or watch a TV show before it airs. So long as you can give constructive feedback, they’ll likely recruit you again in the future. You could sign up with a few research companies to earn regular extra income.
Mystery shopping is another side-hustle idea for people who like working in market research. In this case, you’re hired to go shopping in certain stores then report on the experience. The demand for mystery shoppers varies a lot by location. But it can be a fun way to earn money while seeing retail in action and learning how big brands build a good experience.
Rent your spare room
If you’re the welcoming type and comfortable sharing spaces with new people then this one could be for you. You’ll need to own your home and have a spare room, of course. But if you tick those boxes, then opening your home to boarders can be a profitable and socially stimulating side-hustle idea.
Rent out your car
If you have a little-used vehicle, then why not rent it out? It might as well earn you money as sitting idle in a garage or on a lot. You’ll probably need to bump up your insurance, as your current policy may only apply if you’re the driver. It needs to allow for guest drivers. Do some due diligence on the people who want to hire your vehicle and make sure they’re fully licensed.
Gig work is a popular side-hustle for people who need a flexible schedule. Gigs can include rideshare driving, food delivery, or running errands for people. You can use apps like TaskRabbit to find and accept gigs but be aware that not all the money you make goes into your pocket. Providing those services will cost you money if you need to drive places, catch buses, or use your own vehicle and tools, so budget accordingly.
Deliver groceries or food
Delivering groceries or food is a relatively easy way to bring in a few extra dollars. However, you’ll need to run your own vehicle so factor fuel and maintenance costs into your budget. It’s also quite tricky to spin this sort of side hustle idea into a sustainable full-time business so you’re better off to think of it as pocket money.
Flipping items for profit
Reselling things for a higher price is not a new idea. In fact it’s the very basis of retail. But it’s exploded in the internet age, where resourceful traders can find deals on one website then flip the same product for a lot more on another website. You need an eye for a bargain, good research skills, and patience. Not every deal will be a success, either, so expect to take a loss every now and again.
If you’re naturally crafty, you can market your handiwork online or at markets and fairs. You may already know people who sell their homemade jewellery screen-printed shirts, scented candles, soaps or wood crafts. There are plenty of other side-hustle ideas in this space, such as metalwork, pottery, paintings, organisers, furniture and the like. You might even partner with other artisans to sell related products.
Skilled writers can work their way up to a full-time income from blogging. You can monetise your talent by posting on third-party platforms like Medium, where you get paid a small amount per read. Or you could build your blog on a platform like substack, where you can sell subscriptions to fans. Another option is to charge for including links to other sites in your content. Blogging is a momentum game. Good writers can toil away for a long time without getting a huge audience. But a few breakthrough pieces can set you on your way.
How to come up with your own small business idea
Don’t like any of the ideas so far? Then come up with your own. It’s hard to think up a business idea through sheer effort alone, but that shouldn’t stop you from brainstorming.
In fact, a brainstorming session now could help you have a ‘spontaneous’ idea later. Some psychologists believe that when you give your brain a job to do, it keeps working on it even when you’ve stopped paying attention. This is called the Zeigarnik effect and it may explain why ideas often come to us when we’re out running, in the shower, or lying in bed, rather than when we’re actually hunched over our laptop trying to think up something new.
When brainstorming small business ideas
Before setting your brain to work, give it some guide rails. You want an idea that’s:
- doable – you have the skills to make the product or deliver the service yourself
- affordable – you can start it with money you already have (or can get access to)
- lovable – you’d be happy working in the business for most of your waking hours
- profitable – the business can make more than it spends
Recession-proof business ideas: are they real?
Recessions happen when people across an entire economy start spending less. For most businesses, that means sales shrink and cash starts to dry up.
You’ve probably heard stories of businesses that resist these economic slowdowns. There are three categories of business ideas that are sometimes said to be recession proof.
Essential products or services
Even during a recession, consumers have to keep buying certain things like food. It follows that businesses that produce or sell these essential products and services will be better placed to ride out a recession. But just be aware that even within an essential category like food, consumers may change what, when and how they eat, so your business will still face changes and challenges.
Small luxury items
During the 2009 global financial crisis, marketers noticed that chocolate sales grew. They surmised that people who could no longer afford big-ticket items such as new cars, holidays or fancy meals could still make room in their budget for affordable indulgences. We all like a treat, even if it’s a modest one. So small luxuries are sometimes considered to be recession-proof but of course you still have to understand the market's tastes and predict which small luxuries will do well.
Exporting can be a recession-proof option because it spreads your risk across multiple countries. When recession strikes at home, these businesses may be able to keep selling overseas. But of course an export business is more complex and needs to be able to compete at a global level so this is by no means an easy recession-proofing strategy.
The truth about recession-proof business ideas
Every recession is different and a business that thrives in one downturn might suffer in the next. For that reason, experts seldom agree on what is a recession-proof business idea. That doesn’t mean you can’t build some resilience into your small business idea, whatever it might be. You can get tips in our guide to recession-proofing your business.
How to assess your small business idea
Have you settled on a business idea that you love? Good. Now you need to try and destroy it. Ask some of these difficult questions to make sure the business idea is as good as you think.
1. Do you have the skills?
Your startup is unlikely to have a hiring budget, so you’ll need to do all the work yourself. Or form a partnership with someone who can do the things you can’t.
2. Do you have the passion?
Make no mistake, there’s a lot of hard work and a few setbacks ahead. That’s easier to handle when you love what you do. Passion gives you energy.
3. Do you have the time right now?
Businesses typically chew up a lot of your attention. Can you commit right now? If not, perhaps park the idea until you can prioritise it.
4. Do you have the cash?
Find out what it will cost to set up and run your business over the first 12 months. Can you afford it? If not, perhaps you can cut costs by starting your business as a side hustle, launching online, or trying a pop-up store instead of a permanent location.
5. Will it make money?
Work out the direct costs of creating your product or service and check what your competitors typically charge. Is there a sustainable profit margin in there for you?
6. How will it grow?
Work out how you’ll make the business even more profitable as it matures. Check that you can increase your sales while maintaining or preferably growing your margins.
7. Can you compete?
Take a look at who’s competing for the same dollar. Make sure there’s a realistic and sustainable way for you to take away their market share.
How to execute your idea
There are millions of startup business ideas. Some are wild and exciting. Others are painfully mundane. It really doesn’t matter which yours is, so long as you have good execution.
So choose your preferred idea then write a plan, create a budget, set your prices, choose a business structure and register to launch.
Get help from a pro
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