People ask me all the time: if you lost everything tomorrow, what would you build first?
I don’t have to think about it. I’d start a service-based business, a boring business, or a database business.
These are the best businesses to start from scratch, and none of them is glamorous. A service business multiplies your hours through other people. A boring business keeps collecting when the economy turns. A database business stacks small monthly payments until you own something worth millions.
I got the first one right at 17. I’ve owned all three since. Here’s how each one works, and how you pick yours.
Service Businesses Let You Sell More Hours Than You Have
Broke folks trade time for money. Six-figure earners build systems.
At 17, I started an aerobics instruction and personal training company in Nebraska. I could have taught every class myself, but I would have topped out fast. Instead, I pursued corporate contracts, then put my gym friends to work.
Each of us taught 10-16 hours a week. Together, we delivered hundreds of hours of instruction across Lincoln and Omaha. I didn’t have to teach every hour. I had to win the contracts and fill the schedule.
Later, I went back to the bank I’d worked for in my late teens and asked them to contract with me for an employee health and fitness program. They said yes. I pitched other companies the same way, and it became my first full-time venture. At 24, a Fortune 500 energy company flew me offshore to its oil rigs to build nutrition and fitness programs with a seven-figure budget. Same model. Bigger table.
You can take a service business as wide as you want:
- Tutoring. Tutor Doctor built a national franchise by signing up students and running an entire lineup of subjects.
- Therapy. BetterHelp became a runaway train. Everybody wanted a therapist, and they built a low-cost model to serve them.
- Massage. Massage Envy did the same thing and grew into a very successful franchise.
It doesn’t have to be a franchise. You need demand, a service you can repeat, and people you can train.
Start with the question I ask every client: If I dropped you anywhere in the country, what skill could you use to create revenue within a week? The answer is your Cash Machine. Build your service business around it.
If I were buying one today, I’d buy an HVAC, plumbing, or contracting company. The trades are disappearing, and they’ll come back with a huge fury. If you own one and want to sell, I’d love to talk.
“Win the contracts. Then put your team to work.”
Boring Businesses Win Because People Never Stop Paying for Them
Ask yourself one question. When a downturn hits, what do people stop paying for?
Discretionary spending goes first: the fun stuff. The essentials stay. People will always get their houses cleaned. They’ll always pay for pest control. They’ll keep paying for lawn care and landscaping.
That’s what makes a boring business so close to recession-proof.
While I was raising my kids, we owned laundromats. We also owned a pizzeria, and I’ve owned a hair salon and a nail salon. I call those entertaining businesses. They’re more fun to talk about at dinner. They also take more to run, and they live on discretionary dollars.
In Creating a Cash Machine for Life, I list the kinds of businesses I’d buy first: car washes, laundromats, storage, convenience stores. I also list the glamour industries to avoid at the start, like entertainment, fashion, food service, and travel. They chase trends, eat your time, and depend on fickle customers.
Buying a boring business that already runs gets you cash flow on day one, customers who already pay, and easier financing. Before you sign, two words: due diligence. Buy a good, solid business doing fine. Skip the great one with no room to improve and the terrible one with too much to fix.
The problem? Everybody wants a glamorous business. Something sexy and fun, with all the bells and whistles, that looks great online.
I call the internet the bathroom wall, because anybody can write anything about anyone. Don’t build your business to look good on that wall. Build it to cash flow.
“Don’t build your business to look good online. Build it to cash flow.”
Database Businesses Turn Small Payments Into Big Valuations
The third model is the one you see selling for billions. Think WhatsApp. Think Facebook, which is now Meta. Think X. Every one of them is a database of people.
You don’t need to build a social network. A membership works. A subscription works.
Years ago, we ran Wealth Divas at $20 a month for the women who said, “A man is not a plan. I want to be a wealth diva.” Today, AskLoral.com is our membership platform.
Now look at gyms. Anytime Fitness operates on this model across the country. Huge numbers of people pay a small amount every month, and it’s not enough to make them cancel. That’s the whole game.
My biggest database win was a supplement company. When we took it over, each client spent less than $100. This was a long time ago, back when ephedra was still legal. We added it to the lineup, moved customers onto subscriptions, and grew to thousands of subscribers. The average ticket climbed above $400 per person.
We sold that company for millions.
“Small enough that nobody cancels. Big enough to sell for millions.”
Churn Decides Whether a Subscription Business Works
Here’s what I don’t hear anybody talk about enough: churn.
Every subscription business loses members. Expect to lose a real share every 90 to 120 days. If you only watch sign-ups, you’ll think you’re growing while the bucket leaks.
So from day one:
- Count how many members come in each month.
- Count how many you lose each month.
- Build your revenue model on those real numbers, not on hope.
Hope can eliminate fear, but hope isn’t a plan. Get real data, and you’ll know what the business is actually worth.
“Sign-ups feel good. Churn tells the truth.”
Start Today
In Creating a Cash Machine for Life, I teach three ways: build it, fix it, or buy it. Any of these three models works with any of those three doors. If your current business doesn’t make money, that’s not a business; that’s a hobby. Fix it or trade it.
Here’s your week:
- Pick one model. Service, boring, or database. Just one.
- List your skills, not your job. What could you sell to a company next week if I dropped you anywhere in the country?
- Make three calls. Pitch one corporate contract, or call the owner of an HVAC, cleaning, or laundromat business that might sell.
- Build your tracking sheet first. If you’re going subscription, track joins, cancellations, and net members every month, starting before your first sale.
- Map your gap. Grab my Gap Analysis or take the Financial Personality Quiz to see where you’re starting from.
If I had to start over, this is exactly where I’d begin. Pick yours and move. Never compromise. Never give up.
Go to AskLoral.com. Ask a question, make a request.
