What types of business are cheap and easy to start, and can make you money? In this series of articles, we’ll look at various possible ventures that aren’t complicated to set up. And since most businesses listed here require low investment, there is also a lower financial risk involved.
Do you possess a professional skill or knowledge that you can sell to companies? If you do, you could be a freelancer or even build your own professional service business relatively quickly and cheaply.
But first, what exactly is a professional service?
What Is A Professional Service?
Professional service firms sell knowledge and expertise rather than tangible products to other companies. Professional services exist in every sector, from finance, legal, marketing, IT to human resources.
If you think there isn’t a big enough market for these services, think again. The global professional service market locked in nearly $5,700.2 billion in 2018, having grown at a compound annual growth rate (CAGR) of 7.4% since 2014. It is expected to grow at a CAGR of 9.1% to nearly $8,082.4 billion by 2022.
Here’s a list of common professional services that exists in almost every economy. By no means is this list exhaustive. Look at this as a guide, and find your own path or even create your own professional services if you can.
- Web Design – Web design, web development, web maintenance, SEO
- Branding & Graphic Design – Corporate identity, print and media design, industrial design, product design
- Social Media/Digital Marketing – Digital branding, content creation, analytics, SEO, SEM, PPC, etc.
- Public Relations – Media relations services, influencer relations, media training, editorial services, content marketing, crisis management
- Video Production – Corporate videos, training videos, advertising and web content videos, product videos
- Copywriting/Copyediting – Writing services, editing, proofreading, translation
- Photographer – Visuals for advertising and promotional materials, marketing campaigns, corporate events, product shots, interviews, etc.
- Accounting – Accounting and administration, reporting, auditing, payroll services, advisory
- Consulting – Business advisory, human resources, IT consulting, risk management
- Recruiting – Employee recruitment, executive search, talent management, HR services, compensation
- Corporate Services – Company incorporation, company secretarial services, annual returns and tax compliance, VAT and GST
Why Professional Services?
Professional services exist largely due to the concept of outsourcing. Outsourcing is the practice of contracting a strategic or operational function of a company to a third-party (outside firm or person) who has the specialised expertise and tools to provide that service. Companies outsource for different reasons, including:
- No budget to hire a full-time person or more staff to handle the job;
- The amount of work required does not warrant the hiring of full-time staff;
- Higher quality than doing it themselves; and/or
- Access to a team of highly skilled experts that the company does not possess.
Many industries and business models are at risk of being disrupted due to rapid technological developments and the global recession that has hit almost every economy. To survive, many companies are reducing their workforce and choosing to outsource more of their business functions to professional services. Coupled with the growing gig economy, we may be facing a future that is very different from the conventional way of business operations. Companies might become extremely lean, hiring only people that could support their core business while leaving the rest to outside experts.
What’s Good & Bad About This Business?
- There is very low barrier to entry, and if you are proficient in something that is of value to companies, you can get started in no time.
- Most of these businesses require very low start-up capital. If you’re doing this solo or with a partner, you can even work from home, thus lowering overheads even more.
- You can take in as many or as few clients as you wish at any point in time, so that means you have absolute control of your life!
- The real challenge is not in setting up the business but finding your first few customers. Companies hire professional service providers who are reputable or at least experienced. If you don’t have a portfolio to show, landing your first few contracts could take a while.
- There are good clients, and there are bad clients. The bad clients will take up more of your time than they deserve. And if you don’t know when or how to say “no” to unreasonable requests, you may end up burning your candle at both ends.
- While having a low barrier to entry is a good thing when you’re getting into the industry, it also means that you’ll face some fierce competition along the way.
What’s The Risk Involved?
You can always dip your toes and test the water by starting as a freelancer. The risk here would mostly be the opportunity cost and your reputation (i.e., if you do a lousy job). In other words, the financial risk involved is relatively low.
As you expand your business, so would your risk. Running a professional service business is very much like running any other business – you need capital, good staff, space and more clients to keep it going. The only difference is that you won’t need to worry about inventory since you aren’t selling any physical products.
Getting Your First Customers
It’s a catch-22. To get your first customers, you need a portfolio, but to build a portfolio, you need to get customers. How do you break that cycle? Some people may advise you to take on some free jobs to gain experience, but I think a better option is to sign yourself up on marketplaces for online freelancing services, such as Fiverr, Upwork and FreeUp. These marketplaces allow you to promote yourself while building a nice little portfolio.
How Much Does It Cost To Set Up?
If you’re planning to be a freelancer, the cost involved is low. If you’re working from your home, your start-up expenses would be business registration, computers, office equipment and marketing costs like creating and maintaining a website and maybe name cards and brochures. If you’re game, you can even create your own website, which can not only save you some money but also allow you full control of your website content. To find out how to set up a website and power it with SEO, please read our articles How To Build A Small Business Website On My Own? and DIY SEO Tips For Small Business Owners.
If you prefer a proper office rather than a home office, the start-up cost can range from $30,000 to $100,000, depending on how swanky you want your office to be. This includes business registration, rental deposit, renovation, furniture, insurance, advertising, etc. Please refer to our articles HDB Retail & Office Space In Singapore and What Is Virtual Office & Should I Lease One? for some ideas and options for commercial space in Singapore.
To set up a business, you first need to decide on the type of business structure and then register your business (if you’re doing this in Singapore, the agency to register your business with is ACRA). For more information about the types of business structure and how to register a business in Singapore, please read our article here.