Which "White Collar" Business For The Unqualified MD
Discussion
Thanks to a couple of my business interests I get to meet people from all different walks of life with some of them making a living to others banking money like its going out of fashion.
As my main business is technology I have never needed or bothered with qualifications and hire people based on recommendation or work they have done in the past.
One thing I have learned is that a business that employs well paid, smart people is a lot less grief to run than a business which employs minimum wage staff who are only in to make up numbers.
So the question is , if you had some cash to play with, office space and can build web technology to "solve" almost anything what market would you be attacking where you can hire the talent to do the day to day running of the business.
Where is the money to be made in the new pension rules / financial products / legal services etc? Is there a good "white collar" professional service industry that's ripe to be taken on that's quick to learn and has longevity.
As my main business is technology I have never needed or bothered with qualifications and hire people based on recommendation or work they have done in the past.
One thing I have learned is that a business that employs well paid, smart people is a lot less grief to run than a business which employs minimum wage staff who are only in to make up numbers.
So the question is , if you had some cash to play with, office space and can build web technology to "solve" almost anything what market would you be attacking where you can hire the talent to do the day to day running of the business.
Where is the money to be made in the new pension rules / financial products / legal services etc? Is there a good "white collar" professional service industry that's ripe to be taken on that's quick to learn and has longevity.
If I was looking to buy a business and wasn't an expert in anything in particular, I'd go for a software company. Ideally one that's established and has something popular but niche. If you can establish yourself as a reseller of a popular product like AutoCAD, that's also a good one and just means you need some very commission-hungry sales guys (who are relatively easy to find).
Shirt587 said:
If I was looking to buy a business and wasn't an expert in anything in particular, I'd go for a software company. Ideally one that's established and has something popular but niche. If you can establish yourself as a reseller of a popular product like AutoCAD, that's also a good one and just means you need some very commission-hungry sales guys (who are relatively easy to find).
Hmm, not sure about this.I know nothing about software sales, but I have just bought AutoCAD for my business, and AutoDesk are soon making it online subscription only (for a yearly fee)
This suited me anyway, but the 'reseller' that I bought the subscrition from sold it me for about £50 less than Autodesk direct. Surely there won't be much of a mark up for them??
I suspect that many software resellers will be vanishing - more and more software manufacturers are going to the online subscription model - why not, they make more money and control the customer...
I would look for businesses which can own / control / build data - I think they will underpin a lot of future economy growth
I would look for businesses which can own / control / build data - I think they will underpin a lot of future economy growth
Commission-hungry sales guys are easy to come by but those of a good quality aren't. Depends on the software and the level of understanding required in order to sell effectively.
Continuing on Shirt587’s post, a professional services IT consultancy that specialises in a niche section of the industry or a specific software product would be lucrative. Granted it’s not a ground-breaking business idea, but based on your post (paying smart people well) you’d have no trouble picking up talented people – which is ultimately what would drive the continued success of this type of business – plus new software products always provide new opportunity. Margins can be lucrative for business owners on day-rates charged vs. cost of employment, and running costs can be low given your workforce would spend most of their time with clients or working remotely. The hard part will be picking the niche and securing clients. Ideal mix would be a blend of senior people with industry connections to get the foot in the door, paired with a team of switched-on graduates with 3-4 years consulting experience.
Another area that is ripe for streamlining is the house buying process. So incredibly inefficient and frustrating in every respect from start to finish. I think there are a few other companies attempting to disrupt this market but none have captured as well as they could. www.opendoor.com in the US look like an exciting prospect (currently San Francisco but going across the US) that could be repeated in the UK – similar to webuyanycar but for houses. I’d love to do this myself due to first hand frustration when buying my first property, but don’t have the capital or industry experience to convince people to provide the capital to do so.
Continuing on Shirt587’s post, a professional services IT consultancy that specialises in a niche section of the industry or a specific software product would be lucrative. Granted it’s not a ground-breaking business idea, but based on your post (paying smart people well) you’d have no trouble picking up talented people – which is ultimately what would drive the continued success of this type of business – plus new software products always provide new opportunity. Margins can be lucrative for business owners on day-rates charged vs. cost of employment, and running costs can be low given your workforce would spend most of their time with clients or working remotely. The hard part will be picking the niche and securing clients. Ideal mix would be a blend of senior people with industry connections to get the foot in the door, paired with a team of switched-on graduates with 3-4 years consulting experience.
Another area that is ripe for streamlining is the house buying process. So incredibly inefficient and frustrating in every respect from start to finish. I think there are a few other companies attempting to disrupt this market but none have captured as well as they could. www.opendoor.com in the US look like an exciting prospect (currently San Francisco but going across the US) that could be repeated in the UK – similar to webuyanycar but for houses. I’d love to do this myself due to first hand frustration when buying my first property, but don’t have the capital or industry experience to convince people to provide the capital to do so.
Having worked in software for so long I agree that the days of resellers are limited with the only added value being training courses to support the platform.
I liked the idea of doing something with property and the openhouse concept is interesting but it can be a capital intensive business and to make it work you would really need to go in at the below market value model
A financial advisor I know has been trying to suggest we build a business round the new pension regulations and getting people to switch over to new investments but a lot of the finance guys I know are always complaining that rules are getting tighter every day and its harder than ever to bank hard..
I liked the idea of doing something with property and the openhouse concept is interesting but it can be a capital intensive business and to make it work you would really need to go in at the below market value model
A financial advisor I know has been trying to suggest we build a business round the new pension regulations and getting people to switch over to new investments but a lot of the finance guys I know are always complaining that rules are getting tighter every day and its harder than ever to bank hard..
Insurance Broking.
I've spent the last ten years of my life selling to owner/managers of independent insurance brokers. About 90% of them have a technical background, being trained up by the big insurance companies or working in other people's broking firms. But about 10% come from outside of the industry, mainly marketeers who just decided that insurance would be the product that they would market.
In my experience they are often more successful than the people who actually know about insurance. You can employ people with product knowledge but those people do not usually know how to sell.
I've spent the last ten years of my life selling to owner/managers of independent insurance brokers. About 90% of them have a technical background, being trained up by the big insurance companies or working in other people's broking firms. But about 10% come from outside of the industry, mainly marketeers who just decided that insurance would be the product that they would market.
In my experience they are often more successful than the people who actually know about insurance. You can employ people with product knowledge but those people do not usually know how to sell.
chonok said:
I know nothing about software sales, but I have just bought AutoCAD for my business, and AutoDesk are soon making it online subscription only (for a yearly fee)
This suited me anyway, but the 'reseller' that I bought the subscrition from sold it me for about £50 less than Autodesk direct. Surely there won't be much of a mark up for them??
Using a similar CAD software example I know of, the reseller was paying the software house approx 50% of RRP and selling it for 97% RRP on average (some customers got a 5% loyalty discount). Yes, there can be phenomenal margins - but as you say, the reseller route isn't necessarily where the growth is any more.This suited me anyway, but the 'reseller' that I bought the subscrition from sold it me for about £50 less than Autodesk direct. Surely there won't be much of a mark up for them??
By way of example, look at Simply Business. It was started by one of the people behind Match.com. Most of the insurance brokers I know sell between £2m and £50m in premiums annually and the bigger ones have all achieved that by acquisition.
SB has grown from nothing to £75m in a few years and will surpass £100m soon if it hasn't already. It has done this by not being and normal insurance broker but simply an online marketing machine that happens to have insurance as it's product. Quite frankly they don't actually seem to have anyone their who really understands how insurance works but that doesn't stop them selling it by the bucket load and screwing their suppliers in to the ground.
SB has grown from nothing to £75m in a few years and will surpass £100m soon if it hasn't already. It has done this by not being and normal insurance broker but simply an online marketing machine that happens to have insurance as it's product. Quite frankly they don't actually seem to have anyone their who really understands how insurance works but that doesn't stop them selling it by the bucket load and screwing their suppliers in to the ground.
Ossiantoad said:
By way of example, look at Simply Business. It was started by one of the people behind Match.com. Most of the insurance brokers I know sell between £2m and £50m in premiums annually and the bigger ones have all achieved that by acquisition.
SB has grown from nothing to £75m in a few years and will surpass £100m soon if it hasn't already. It has done this by not being and normal insurance broker but simply an online marketing machine that happens to have insurance as it's product. Quite frankly they don't actually seem to have anyone their who really understands how insurance works but that doesn't stop them selling it by the bucket load and screwing their suppliers in to the ground.
Someone suggested insurance to me and showed me the model they use but it seemed pretty risky. They were selling life insurance products via an umbrella group ( He says that how everyone starts) and get paid weeks after completion. The risk seemed to be the way the insurance company could reclaim the fee if the client stops paying..SB has grown from nothing to £75m in a few years and will surpass £100m soon if it hasn't already. It has done this by not being and normal insurance broker but simply an online marketing machine that happens to have insurance as it's product. Quite frankly they don't actually seem to have anyone their who really understands how insurance works but that doesn't stop them selling it by the bucket load and screwing their suppliers in to the ground.
Is commercial stuff like SB much different?
I'm (still) involved in insurance broking.
It's true that at lower level commercial and personal products then technology and marketing can get scale quickly.
BUT this costs unless in a niche area and regulation is a PITA. (Though not quite at the level of Financial Advisors)
But you can become and appointed rep pretty quickly - however if you don't have any industry contacts you won't get competitive products to sell.
edited to add: there is less chance of "clawback" in general insurance as the contracts tend to only run for a year.
It's true that at lower level commercial and personal products then technology and marketing can get scale quickly.
BUT this costs unless in a niche area and regulation is a PITA. (Though not quite at the level of Financial Advisors)
But you can become and appointed rep pretty quickly - however if you don't have any industry contacts you won't get competitive products to sell.
edited to add: there is less chance of "clawback" in general insurance as the contracts tend to only run for a year.
That's right, no real risk in selling commercial and personal lines insurance as opposed to life. You sell a product, collect the premium, take a commissions and/or a fee and pass the net on to the insurer.
It would be hard to start from scratch as with any business as relationships with suppliers are vital and related to buying power.
It would be hard to start from scratch as with any business as relationships with suppliers are vital and related to buying power.
Ossiantoad said:
That's right, no real risk in selling commercial and personal lines insurance as opposed to life. You sell a product, collect the premium, take a commissions and/or a fee and pass the net on to the insurer.
It would be hard to start from scratch as with any business as relationships with suppliers are vital and related to buying power.
So how would you suggest approaching this to look at it in more depth? Any pointers appreciated It would be hard to start from scratch as with any business as relationships with suppliers are vital and related to buying power.
Have a look here
http://www.teninsurance.co.uk
It's not necessarily a recommendation, but it will give an idea as to how to start up.
http://www.teninsurance.co.uk
It's not necessarily a recommendation, but it will give an idea as to how to start up.
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