Recently the question was posted on Quora.com, “What are the least stressful businesses to run.” Here was my reply.
Any business will be stressful until you get the business and operations fly wheel spinning and a great management team in place. Once your business is operational and cash-flowing, based on your prior choices, your level of work effort and stress will vary based on the business decisions you have made. Here are ten (10) attributes of lower stress businesses by type that an intentional entrepreneur might focus on:
Growing Monthly Recurring Revenue Businesses (create a stability of predictable cashflow, consistent profits, serving to reduce the likelihood that any one customer leaving you will significantly and negatively impact your business).
Non-Durable Goods businesses (better to sell commodities that have one-time use or early-end-of-life like razor blades that always need replacement, than to sell the razor handle that can be reused, or worse, eliminated through plastic injection molding it into the disposal razor blade.) Beware however of non-durable goods with low shelf life like produce, dairy products, etc.
Low- to no-technology businesses with stability of the production cycle, where your means of your production do not need to be regularly upgraded with new expensive technology every software cycle season. For example, consider the 10–20 year replacement cycle of steel scaffolding rental business inventory; their technology does not change much (for instance they are still using the same universal coupler designed in 1919), and you can get many turns on your inventory. Or consider, a 125-year old low-technology commodity like Bicycle Playing Cards — where the basic commodity has not changed much in a hundred years. Contrast this with one of my own recently failed technology startups where within 3 years we had to re-design, re-develop, and re-invest in our web and mobile apps to meet changing Microsoft Windows upgrades, Apple IOS upgrades, and end-user device upgrades; what an expensive headache; yikes. You had better have a lot of money and resources if you are going to be a technology play where your operating system is going to change frequently.
Deep Niches. It’s wonderful when you can find niches so deep that nobody can cut in and compete with your business. Still niches can lead one into a false sense of security when a technology paradigm shift occurs. Niches have shelf lives, however while they are protecting your business, they are a work of art. The Travel Agent industry was formerly a guild with a deep niche, then with the internet, they were gradually then suddenly replaced by expedia, travelocity, kayak, Sabre, and many others. This also means you need to think about intellectual property protection to widen and deepen your hold on niches.
Automation and Delegation. Think how to automate routine activities to enable ordinary people accomplish the extraordinary. Automation is the competitive edge of our century, whether by simple tasks or more complex artificial intelligence (AI). Imagine putting your brilliant know-how into a routine system that was write-once, read many. Delegation is the management ability to define work, scope work out, and assign work to others work to be performed with the same ability and accountability if you or your best resources had completed the task.
Content. Content businesses are like fine diamonds in the rough, where every new piece of content is like a new facet cut into the diamond to give it greater value, clarity, and brilliance. Contrast this to businesses that gain little from their continual operations and become commoditized. Think… is your business like a rubber tire that wears out with use, or are you like the diamond content business that gets more size, clarity, and value with age.
Economies to scale. The most profitable businesses make marginally more profit for each additional widget produced. If you can scale your business with economies to scale, then you have a recipe to combat margin erosion that will surely occur over time.
Virtual businesses. Amazon is taking market share by hosting its business online, allowing online show-rooming, and not requiring costly retail stores. The old-school shopping malls are legacies and monuments to the pre-internet age where you gathered at malls to shop; not any more.
Businesses that you understand. You will almost always be better off running and operating a business model you understand. This will certainly help you hiring people if you know what you are looking for talent in your industry. If you don’t understand your business, you are like a non-qualified investor making bets on industries with no means to influence the outcome. Even if you are in a brick and mortar business, there are ways of applying many of the attributes identified above into a new age model that will give you speed, margin, recurring revenue, and more ease in operations of your business.
A place where you have fun at working…. will be less stressful on you, and those around you.
In the end, no business will be on the top of the pile forever, so constant improvement, re-invention, curiosity, and exploring new ways of doing things should keep you moving forward longer than you might otherwise. Overconfidence kills. Remember, before there was OneNote and OmniFocus, there was MS Outlook, and before Outlook there was the Franklin Planner, and before the planner was the Day-Timer, and before the….. — you get the picture.