Experts point the way
According to Kevin Kerridge, head of U.S. operations for specialty insurer Hiscox, some of the "least risky" industries for startup companies include:
- Technology services/information technology consulting;
- Business and management consulting;
- Assisted living/caregiving;
- Event planning.
Fabienne Fredrickson, an entrepreneurial coach and founder of Client Attraction, says coaching and consulting businesses, particularly for second-career entrepreneurs, is a good way to become self-employed.
"You can do it from the phone, Skype with clients all over the world, it can be an Internet-based business that within a few years can grow into a six-figure income," she says. "And it can be done on evenings and weekends and using information you already have. All it takes is a phone and a computer."
Some lessons for the entry-level entrepreneur to think about:
1. Buy a business
For others, though, such as corporate executives looking to make the transition to self-employment, buying an existing and profitable business may be "faster, easier, safer and easier to finance than starting one," says John Martinka , a business consultant with "Partner" On-Call.
Martinka cautions that while buying an existing business does require cash on hand, "you are trading your capital for immediate cash flow," he writes. "That capital can be as little as 10% of the purchase price." "You walk into nice things like customers, cash flow, market share, profit and a reputable product or service," Martinka says. "You get training from the seller as part of the deal and have an employee team that has been doing their jobs for years and helping create those profits."
2. Buy a franchise
A similar route can be simply buying into a franchised business, reminds Dan Martin, a franchise consultant with IFX.
Franchises have "great support designed for somebody that doesn't necessarily have any experience in that particular expertise," he says. "The most popular franchises these days are lower risk franchises, are recognized brands and have low initial investment because of the lack of financing available."