Why Start a Small Business?

The rise of AI and automation is likely to cause massive job cuts across many sectors. Unless you’re in an industry that’s safe from automation, your financial security will be largely dependent on your employer’s mercy.

By managing your own business, you’ll have the freedom to set your own rates. Instead of being at risk from automation, you can use the increases in efficiency that it provides to make your business more profitable.

Starting your own business also gives you additional flexibility. Once you understand how to run a business and attract new clients, you can easily transfer these skills to a new industry if your current one becomes saturated.

However, finding clients and managing the financial and legal aspects of a business can be challenging. Therefore I don’t recommend quitting your day job until you’ve secured enough clients to ensure a sustainable income.

Choosing Your Industry

Pick an industry that matches your skills and local demand. Jobs with low entry barriers are best for getting started immediately, although they will inevitably face more competition.

White-collar jobs will face the greatest risks from automation. They will mostly be replaced within the next five years. However, if you incorporate AI into your work then you’ll have a huge advantage over people who are slow to adopt.

If you choose to learn a trade, ensure you can start working as soon as possible. The market will be insanely competitive soon as laid off white collar employees flock to blue collar work. 

Low Entry Barrier Jobs:

  • Dog walking, lawn care, house cleaning, car washing, gardening

Skilled Trades:

  • Plumbing, electrical work, carpentry
  • Pick a trade with quick training and local job opportunities

White-Collar Services:

  • Virtual assistant, Social media manager, Copywriter, SEO consultant
  • Use platforms like Upwork to find work (eventually you want to start your own website and migrate your clients there to avoid the fees)
  • You must use AI to remain competitive

Tips:

  • Offer discounts until you get your first few reviews, then steadily increase your prices.
  • Don’t lower your prices just because you are more productive with AI
  • Be prepared to pivot to a different industry as automation makes finding clients more difficult. You must be ready to adapt to a rapidly changing market. 

Business Name

Choosing a business name is an important first step:

  • Keep it simple and memorable (e.g., “Frank’s Mowing” for a local business)
  • Check for trademark conflicts for your country e.g. USPTO.gov
  • Ensure the name isn’t already taken by searching your state’s business registry

You can try Namelix or use ChatGPT to help you come up with a suitable business name.

Business Logo

A logo helps make your business look more professional and improves brand recognition. Here are some options for creating a logo:

DIY Logo Makers:

  • Ucraft Logo Maker – You can make a basic logo for free but requires a one off payment to download the logo in high quality
  • Fiverr Logo Maker – You have to pay for each logo
  • Ideogram – 10 free image generations per day, but you might not be able to download without paying
  • Canva – Free and paid plans available but you may not be able to download in high quality without paying

Note: You can simply use Snipping Tool to extract the logo after creating it, then use ClipDrop to remove the background if necessary. 

Hire a Designer:

  • Fiverr – Wide range of designers and prices, stick to people with good reviews

Advertising

Having a strong digital presence is key to finding clients. Use free methods first before spending money on paid advertising. Make sure to use local business directories specific to your industry wherever possible in addition to the main directories and social media accounts.

Note: There are tools like BrightLocal to help you quickly sign up for all the relevant directories; however you will have to pay $3.20 for each one you list your business on (make sure you use the citation builder and not the monthly plan).

You can also use it to help manage your business reviews and make automated updates to multiple platforms however this requires an expensive monthly subscription and isn’t included in the initial $3.20/site fee.

Online Directories:

Social Media:

Gig Work Platforms:

Mobile Apps:

Word of Mouth:

  • Advertise to friends and their families
  • Send follow-up emails requesting reviews from satisfied customers

Paid Advertising:

Only use paid advertising if the other methods fail, or maybe just to quickly get your first few clients. There are so many free alternatives that you probably won’t need it.

Website Creation

A website isn’t strictly necessary when starting out. Focus on other methods of advertising like Facebook and business directories first.

If you decide to create a website, consider something like Carrd for an inexpensive basic landing page, Wix for a more in-depth drag-and-drop builder, or WordPress for complex sites.

If you go with WordPress then you will also need to find a host, e.g. SiteGround.

I don’t recommend WordPress for beginners, unless you can afford to pay someone to build a site for you then it’s going to take you a lot of time to learn. Wix should be fine for most basic service businesses.

Payment Processing

A payment processor is necessary to accept credit card payments. All processors have fees, typically ranging from 2.9% to 3.5% plus a fixed fee per transaction. Consider using Stripe or PayPal Business. Encourage cash payments to avoid fees when possible.

Accounting Software

You can just use Excel or Google Sheets to record your expenses and income when starting your business, but this might cause headaches later as your business grows.

Options to consider:

Legal Requirements

Make sure you follow the relevant laws in your country and obtain any necessary business licenses for your industry.