Category Archives: Small Business

Most Profitable, Least Profitable Small Businesses to Start

Forbes magazine has published a fairly interesting article on where the profits are, and where they ain’t, in small business (< $10 mil. a year).

Thanks to Up the Ladder for pointing the way.

So, in extremely short form (I promise, the article is worth reading), here’s the list based on pre-tax profit margin averages.

The Most Profitable Small Businesses:

  1. Accounting services – I guess it pays to love spreadsheets.
  2. Legal services – I guess it pays to figure out ways to bend the rules.
  3. Dental services – Didn’t Seinfeld once wonder if they were actual doctors, then fell victim to a horrible “anti-Dentite” label?
  4. Designers – They make it a broad category – interior design, architects, graphic designers – but it’s still good news for all you freelancers.
  5. “Other” health professionals – like chiropractors.
  6. Outpatient care – It seems like there’s a new one popping up on another corner every other weekend in Dallas (along with nail salons).
  7. Insurance brokers – I really have nothing to say about this.
  8. Doctors – Surprisingly low, actually, but I guess they shell it out in payroll and insurance.
  9. Medical and Diagnostic Labs – Couldn’t they have put all the health businesses in one category?
  10. Depository Credit Intermediary – This one is surprising, and ironic. People who help people with their credit troubles are one of the most profitable small businesses you can start.

The Least Profitable Small Businesses to Start:

  1. Community Care Facilities – high payrolls, run by Medicare, Medicaid and a shortage in nurses
  2. “Other Support” Services – OK, that’s a little broad, but this goes mostly to all those services that are in highly competitive fields where the low price always wins.
  3. Beverage Manufacturers – includes soft drinks, juices and wineries, where there are so many competitors that the new guy can’t cut through.
  4. Real Estate Related Services – the market is down, what more needs to be said?
  5. Bakeries and Tortilla Manufacturing – huh?
  6. Recreation and Amusement Centers – gyms, ski resorts, etc. High, high payroll just to keep it open.
  7. Auto Vehicle Parts Manufacturing – again, only the low-cost wins, and there can only be one of those.
  8. Specialty Retailers – your niche markets like music stores. Yes, Big Box retailers are taking over here, but at the same time, if you can really, really nail the niche in a location that wants it, I actually think specialty retail could be very profitable. But that’s a lot of ifs.
  9. Alcohol resellers – kinda surprises me. You’d think this is a high profit, high traffic business, with relatively little needs for manpower. Maybe it’s the extensive inventory necessary to be open that actually makes you close.
  10. Hotels – If a room ain’t filled, they ain’t making money. That’s why there’s really no such thing as a set rate these days.

Similar Posts on Brett’s Blog:

  1. Why Businesses Have To Leverage Web 2.0
  2. Which Websites Get the Most of Our Time?

What Painting Can Teach You About Your Business

My wife and I recently decided to paint our kitchen. We painted it once before, about a year and a half ago when we moved in, but now we’ve got a better idea of what we like, and the time seemed right to change it up a little. So we enlisted the help of another couple friend and got cooking at the end of January.

One thing we noticed when we painted the kitchen the first time around, about half way through the job, was that there was actually still wallpaper under at least two previous coats of paint. And we were adding a third. With the rush of moving in and already being halfway through the job anyway, I elected to move on and worry about getting rid of that old wallpaper later. Now, knowing that we were going to add a fourth layer of paint on top of this wallpaper that had no doubt been there since the mid-80’s, I decided the smart thing to do was to strip the wallpaper before we started painting. Our friends concurred, so we made it happen.

In addition, our kitchen has popcorn texture on the ceilings, which, again, dates it a bit. Our friends told us popcorn was easy to scrape off, and retexturing is a breeze. Even though we have 15 foot vaulted ceilings and lots of angles and hard to reach places in the kitchen, it seemed like the smart thing to do, and our friends, who had done it before, said it was easy, so were were in. Now, before a single drop of paint was going to hit our walls, we were completely stripping down our walls and ceiling, and retexturing all of it.

If you’ve done much painting at all, you know that the painting is not the hard part; it’s the prep work that’s a real whippin’. You can pretty much triple the time it takes to prep when you’re scraping and texturing. Every inch of your kitchen that you don’t want covered in dust and old pieces of wallpaper has got to be covered in plastic. Lining up the blue painter’s tape perfectly along every single edge in the room, and then making sure it adheres to the plastic takes FOREVER.

On top of that, scraping the walls was extremely difficult. The layers of paint understandably made getting through to the wallpaper a challenge. On top of that, the high ceilings and various nooks made scraping the ceilings more of a chore than we figured.

It took us two full weekends for four people just to scrape everything off the wall. Still no paint.

After scraping the walls, scraping the ceiling, texturing the walls and texturing the ceiling, at about 9:30 on the Saturday night of the second weekend, my wife and I got out the rollers and brushes and started to paint our kitchen. We were dead tired and sick of working, but the thought of actually getting paint on the walls was enough to keep us going. The good news is that we still had all the plastic and tape up from texturing, so we didn’t have to worry with any of that.

At about midnight, we were finished. Though dust was absolutely everywhere, our shoulders hurt from reaching all day, and there was still a good deal of cleanup awaiting us for at least the next hour, we were excited to pull the tape from the edges and take a look at the finished product. It would make it all worth it.

As we pulled the tape, I noticed right away that some paint had leaked through onto our trim. Not a big deal; I could quickly touch that up. But the more I pulled, the more I realized this was to be the rule more than the exception. I don’t know if the dampness of the texture had affected the tape, or if we simply hadn’t taped well, but there was leakage everywhere. On our trim, our cabinets, our windows, our countertops.

I don’t know of a time in our young 3 1/2 year marriage that my wife and I have been so bitter. Our feelings of accomplishment were instantly traded for a deeply-rooted hatred for home improvement, work in general and our kitchen. It felt hopeless and absolutely frustrating. It felt like we had wasted a full week, and our kitchen actually looked worse.

That was the first weekend of February. Today (March 16), I finally finished most of the touchups. The last thing in the world I’ve wanted to do for more than a month is work on that stupid kitchen. On top of that, there are still some messy spots, but my painting skills have been maxed out. It will get no better.

So what’s this got to do with running a business?

There are lots of angles to make the truths of this DIY story applicable to your business. I could tell you how important prep work is, and how it’s often overlooked. I could tell you that a project you’re really excited about making happen can sometimes only happen when you address some issues that you don’t want to deal with (like the popcorn ceiling and the wallpaper). I could tell you that it’s the details, the touch-up, that makes what you do really special and different.

But that’s not the point I’m going to make. Here’s the real point we can all learn from:

Hire a professional when you want to get something done right that’s out of your expertise. Yeah, it’s probably fun to figure things out. Yeah, it’s probably really cool to pull it off and discover a new skill you didn’t know you could nurture. But more times than not, that doesn’t happen.

I can’t tell you how much I’d like to go back and hire a professional painter to come in and take care of our kitchen. Originally, we figured we’d be saving money, plus it would be fun learning how to make all of these improvements. Well, it did save money, but only about $300 when it was all said an done. And I did enjoy learning how to texture and patch, and all that. But the end result and most of the experience wasn’t worth it, and my kitchen is suffering for it. It took too much time, as well. Most importantly, neither my wife or I am pleased with what we produced.

Hire a professional to help you when you get outside your area of expertise. Get a web designer, don’t try to learn code. Hire a writer, don’t try to “brush up” on your grammar or AP style. Get someone who’s going to give you something you know you’ll be glad you have. It inevitably is always worth it, one way or the other.

Why Businesses Have to Leverage Web 2.0

I stumbled upon this great post at Decker Marketing.

Sam moderated a Web 2.0 panel recently and was kind enough to pass along his notes. Every one of them deserves your attention, but here are the quotes that really stick out to me:

  1. 25% of Google search results is user generated content. If googling your company is one of the first steps a prospect before making a decision about you, how important is this stat?
  2. Use any negative comments to your advantage. There is an opportunity in all negative comments. When people reject the idea of a corporate blog, they usually reject it for this reason. No one wants to unveil their dirty laundry (or facilitate a medium where even the clean laundry can get dirty). But that’s really not an accurate way to think about it. The way you deal with customer issues are much bigger opportunities than getting 5-star ratings from every visitor.
  3. Have our PR firm find the A list or almost A list bloggers in our category.  Interview them for your blog.  They’ll likely reciprocate with links like “I was interviewed here”. This makes excellent sense. It leverages celebrity endorsement opportunities, it introduces you to the big dogs in your market, and it usually leads to them scratching your back in return. All you have to do is ask.

I’ve said it before, as have many others: Web 2.0 is opening up the entire business world to small business. However big you want your small business to be, you now have almost all the tools and almost all the opportunities that the big companies do. How are you using them? What if you just incorporated one “act of social media” – how would that affect your business?

Give Them What They Want

Uncle SamFound a great new blog today with a post focusing on “Is find a need and fill it bad marketing advice?”

This post really takes the same slant as my Need vs. Want post from a few weeks ago, but I think it might clarify the point a bit more.

Here are my favorite points:

  • “Find a need and fill it … that is the key to successfully marketing a business.”Someone who needs to be slapped around a little bit.

  • People price shop for what they need, and even that makes them grumpy. People pay premium prices for what they want, and they love it.

I work at a company that markets nutritional supplements. You can imagine how many products that all of us feel people need, but they still aren’t great sellers. I’m convinced everyone on the face of the planet needs calcium supplementation, but it’s not really something most of us want, right? However, give people something that burns fat and allows that to eat whatever they want and they won’t gain weight, and they’ll go crazy for it. Cuz they want that.

Answering the question of “Will people want this?” is one of the fundamental gatekeepers of any product development strategy.

Thanks to David for pointing the way on the batch of links that included this little morsel.

Brett on Marketing

ArrowI talk about a few different topics on this blog, but most of it is about marketing.

With that, I just wanted to point out that I’ve added a button in the top nav bar titled “On Marketing.” Here, I somewhat regularly add links to posts I’ve written that I feel capture parts of my ever-evolving approach to marketing, strategy and overall business.

So, take a look, add to it, take away from it, or just completely ignore it. But, hopefully for some of you, it’s at least entertaining and somewhat thought-provoking.