If you're thinking about starting your own business,
but you're not quite sure what kind of start,
keep watching.
In today's video. I want to help you identify which type of business
you should start.
We’ll go over the three main types of online businesses
so that by the end of this video,
you have a better idea of which business type is the best one
for you to get into.
Hi, my name is Mei Pak,
and I help makers, artists,
and designers create a full-time living selling
their handmade products online without relying on social media.
So knowing which type of business you have
makes everything a lot simpler for you
because each type should be approached very differently.
The way you get customers for each is different.
The type of work you be doing is different.
So it's important to know the difference before you jump in.
You know, it's just like going to those career fairs in school
and you're trying to learn more about what a certain occupation is like,
but no one really tells you.
This is what I'm hoping to do in this video.
The first business type is a Product-Based business.
This is a type of business where you sell actual physical products.
It involves manufacturing making products,
whether you do so in your home,
in a factory,
or through a third party.
These are products like clothing, electronics,
furniture,
and literally anything you can physically touch.
There are a lot of pros to a product-based business,
like the feeling of accomplishment and fulfillment at making your own.
products and seeing people actually use them.
If you don't handcraft your own products,
Print On Demand is another option.
It's super easy to get started
and makes the manufacturing part of the process even quicker and simpler too.
Even if you don't design your own print on demand products,
you can buy inventory from other artists and manufacturers to resell.
Nowadays, there are several ways to make tangible products,
and overall this business model is the simplest one
we're talking about today.
For a product-based business,
besides doing sales and marketing like all businesses
have to be doing anyway,
you'll be spending most of your time
making new products packing and shipping orders.
But with the pros come the cons.
One con is that
because of the very fact that you're dealing with physical goods,
the quality can vary, unlike with digital products
that are always the same, right?
So, being 100% on top of the quality
of each order is always going to be something,
you think about.
And if something goes wrong,
it could lead to a bad review.
Another con is that,
in some way,
you will have to worry about shipping.
You will either have to personally ship the product,
or your print-on-demand company will have to,
but in both scenarios shipping is involved.
It's inevitable.
And that's part of the process that is out of your hands.
So a lot of things can happen, like lost packages,
late packages,
damaged packages.
It's just an extra thing to concern yourself
with when it comes to the customer service side of things.
The second type of business is a Digital Product-Based business.
Essentially. It's like a product-based business except It's all digital.
These are products like online courses,
Kindle Books,
audiobooks,
software programs,
digital art,
and more.
A huge advantage to this is you just design the product once,
and you can sell it over and over again.
It makes the entire selling process fast and easy.
You don't have to manufacture
or ship your products, right?
Customers get delivery of their orders instantly,
and when you're ready to launch new products,
it's relatively cheap to make.
Digital product-based businesses
spend most of their time on their computer,
either with designing new products,
improving or updating existing ones,
and doing customer service.
There are also some cons.
There's a lot of competition out there
and with so many people selling online.
Nowadays standing out can be very hard,
especially when you're first starting out.
Also, making digital products is such a low barrier to entry compared to making
and selling a physical product.
And anything that's easy to do,
there's bound to be a lot more competition.
It can also be easier for people to scam you or rip you off and that can be hard to police.
Typically, it's also difficult to charge a lot for digital products,
like Canva templates,
digital planners,
knitting patterns,
or crafty courses,
which means that you need to have a lot of orders
rolling in constantly to actually make a living at it,
which isn't always realistic.
So, volume is something you need,
or diversity.
If you get into a business like this.
The exception here would be
if your product promises to solve a really dire problem
that people face in their life,
like saving a marriage,
finding a partner,
starting a business,
losing weight,
improving someone's financial situation.
These are the types of problems
people will pay a lot more money for.
And to take it a step further,
there is a huge myth that these types of products are passive income
because you might think you're just making the product once,
right?
And it keeps selling and selling over and over again without any extra work.
Well, they aren't really passive,
because selling requires constant effort,
and with any digital product,
be prepared for continuous customer service.
Because people will always have questions about how to use your product.
The third business type is a Service-Based business.
The customer or client pays for a service to be performed.
Some examples of service-based businesses
in the creative online space are
photographers,
copywriters,
virtual assistants,
and graphic designers.
The pros include being able to charge higher prices depending on the degree of the desired outcome.
So the more valuable the outcome to the client,
the more you can charge.
For example, if you are a copywriter that specializes
in writing sales copy,
your work is directly tied to your clients sales
and as such,
it's easier to charge more.
A service-based business is great for
outgoing people who love working with others
because obviously, you'll be working so much more closely with your client
compared to any of the other two business types
we talked about before.
Another pro is that
it's actually really easy to get started from zero.
You don't have to create a product before being able to sell in order to build credibility.
People just starting out in a service-based business often times offer their services
for a reduced rate at the very beginning.
This helps them build up good customer reviews
and grows their portfolio,
allowing them to increase their prices later.
So many creatives start out by offering a service,
then move on to selling products
when they become more established
and have useful feedback on what customers want from them
Service-based business owners spend most of their time building relationships,
networking,
or doing content marketing. So it's a lot of computer work as well.
All that sounds great, but keep in mind a few cons.
If you're the only one, fulfilling your orders,
it will likely become stressful and overwhelming,
and can make it challenging to scale up.
Offering services is also competitive,
especially when you're first starting out from scratch
and it can be unpredictable,
making it difficult to rely on it for a consistent stable income.
A lot of service-based business owners I know
either eventually increase their rates significantly to deal with this
and hire additional team members,
therefore turning into an agency
or they end up productizing their expertise into a course,
which is far easier to scale.
For me personally,
I decided to go with a product-based business from the very beginning with my jewelry business,
because I've just always loved creating things with my hands,
the feeling I get from creating something from scratch.
It's just so magical.
And then seeing other people actually using my work and enjoying it.
It's just such an amazing feeling,
and over the years
I've been able to grow my business through a lot of love and hard work,
and I would not trade it for anything else in the world.
So if there's a piece of advice I could give you,
it would be to choose your business type based around
what you really love to create
because I'm proof that with time,
the money will follow
when you do something you love.
It's generally, from what I found,
having run all three of these types of businesses myself,
easier to sell physical products than anything else.
Physical products are just so much more straightforward
and it's easier to control the overall experience for your customer.
I've also experimented with other types of businesses and products as well.
My husband and I share another product-based business,
but that one is print-on-demand.
I do love my handmade business so much,
but I will say that print-on-demand makes life a lot easier
since I don't have to worry about inventory.
or take the time to make the products or ship them.
So, from personal experience, I can tell you that if you don't want to deal with inventory
or you're not passionate about actually hand making your items,
print-on-demand
would be a much better option for you.
We do also sell digital prints of our art,
but it's interesting to see that most people actually prefer
buying the physical products like are framed prints
or canvas wraps,
even though they're more expensive.
Given the option,
I think people place creator value in something
they can hold in their hands,
compared to a PDF file
sitting on their computer.
I've also created a service-based business called Creative Hive,
which is this channel,
where I coach other creatives on how to make a
full-time living selling their handmade products online.
Now, when I first started, I didn't have a product yet.
So I offered one-on-one coaching with clients
and naturally this eventually grew into a digital product,
which is my course, the A Sale In A Day business system.
Total transparency-
my service based business has been the hardest one to grow.
It took a lot of content marketing, like this YouTube video,
lots of time working for free,
putting out free podcasts.
free YouTube videos, blog posts,
to show people that I knew what I was talking about
and that they could trust me,
before more people felt comfortable
investing in my expertise,
and you'll likely have to do the same.
So while sales can be slow sometimes though,
It doesn't bother me, because I started Creative Hive
for the love of sharing knowledge
and teaching people what I know to become successful in their own businesses.
That's what's most important to me.
It just feels so good to make an impact.
Like literally the other day,
I had a student saying that I'm changing lives.
I mean, this student did quadruple her business, so,
I mean, it's just so fulfilling.
So if you're up for being in it for the long haul because you know
your service can really help people,
this could be the right path for you. And there you have it,
those are the three types of businesses that you can start.
So which of the three do you want to start, and why?
I'd love to know more in the comments.
I hope this video has been useful
in helping you choose the right type of business for you.