How to Hire Employees (in 7 Simple Steps)
January 24, 2023
Are you struggling with the hiring process? We have been building our team at UpFlip, and we wanted to know how to hire employees better.
We talked to Jessica Miller-Merrell, the founder of Workology to learn more about hiring and human resources. She started Workology in 2005 as an HR resource destination for small business owners.
Workology has been named Forbes Magazine’s top recruitment resource twice and helped major companies like Whole Foods, Home Depot, and AT&T optimize their talent acquisition and management processes.
You’ll learn:
- How to prepare to hire people
- How to create a job description
- How to screen applicants
- How to conduct an interview (and what not to do)
- How to provide a job offer
- How to onboard employees
- How to improve your employee retention
Step 1. How to prepare for the hiring process
The first step in the hiring process is getting your business ready to hire. Preparing to hire employees will include the following process:
- Establish what positions you need to hire.
- Get an employer identification number (if you don’t already have one).
- Create an employee handbook.
- Establish employee benefits.
- Implement a payroll system.
- Purchase workers’ compensation insurance.
- Get workplace posters.
Establish what positions you need to hire
The first step of the hiring process is establishing your needs. Jessica told us:
The best way to establish what positions you need to hire for is to break your days into 30-minute windows and keep track of what you do each day.
Check out our interview with Jessica below:
Once you have an accurate portrayal of what you spend time doing, you have a basis for the desired skills you need. During this time, you might also want to consider questions like:
- Should you hire hourly vs salary employees?
- Can you hire independent contractors or freelancers?
- Is it reasonable to expect one person to have all the specialized skills you need?
- What software are you consistently using?
- What is your company culture like? What type of person will fit well in it?
- Does the employee need to be on-premises, or can you hire remote employees?
- What is your company culture like? What type of person will fit well in it?
Jessica suggested reading Never Split the Difference by Chris Voss. She told us it changed how she interacts with her family, friends, employees, and clients.
She also warned that you should consider what industry the position is in.
Each industry has different challenges
Jessica told us:
Tech is still going strong.
She also mentioned that seasonal hiring for positions like customer service are still going strong.
Unfortunately, many other industries are finding it hard to hire employees quickly. Jessica specifically said that the following fields are having difficulty finding qualified candidates:
- Logistical
- Healthcare
- Education
If you are hiring employees in these fields, make sure to make the hiring process as quick as possible, and give job candidates the best you can give them.
Get an employer identification number (EIN)
You’ll need an EIN if you don’t already have one. It is what you’ll use for paying employees’ social security and income taxes. You have to apply for your EIN on the Internal Revenue Service website during normal business hours.
Create an employee handbook
When you hire employees, you’ll want to provide an employee handbook to help them better navigate the onboarding process, company culture, and work environment.
An employee handbook can be physical, electronic, or even video. Jessica suggests using a video before the first employee interview to help applicants learn about the company. She also told us if we are completely honest about the workplace culture and the job descriptions, some applicants will eliminate themselves and make finding the right candidates much easier.
What to include in a handbook
A good employee handbook will include:
- Mission statement, company culture, and values
- Information required by an HR professional and legal professional
- Paid time off, benefits, and non-discrimination policies
- Obligations and rights of employees
- The company’s expectations of employees
- Commitments the company makes to employees
- Link to the full company policies (I once had to review thousands of pages for an employer regarding complex legal requirements. Major corporations and franchises have a policy for almost everything. If you have contacts within major corporations, ask their HR and legal departments how they handle it.)
Workology has five blogs about items every company should have in their new employee handbook. Go check them out for a deep dive into this part of the hiring process.
Establish employee benefits
You can’t ignore your benefits package when attracting a new hire. The Society of Human Resource Management has an excellent resource about the benefits that companies offer. The best candidates are likely to expect:
- Healthcare
- Paid time off
- Remote work options
- Paid leave to care for kids and aging parents
Do you offer all these? You might struggle to attract a new hire if you don’t. Which job offer would you accept:
- Great insurance and 20 days of PTO per year
- No benefits
Unless you pay employees obscenely, they probably will go for the first one.
Implement a payroll system
Hiring your first employee means you need a payroll service. Jessica suggested looking into the following providers:
- ADP
- Gusto
Many of the systems offer more than just payroll. Choosing one that works seamlessly will help you during the interview process, reviewing new hire paperwork, paying employees, and documenting reviews. You can learn more about payroll providers in our blog about the 15 best HR companies.
Purchase workers’ compensation insurance
You’ll definitely need workers’ compensation before you hire new employees. This protects you if they get hurt on the job. Check with your business insurance provider; they should offer workers’ compensation.
Get workplace posters
Every employer is required to display workplace posters at every location. Use the FirstStep Poster Advisor to find which posters you need before you hire workers.
Step 2. How to create a job description
Another key step in hiring someone is writing job descriptions. You’ll want to include the following aspects in a job description:
- Company Information: Tell people about your company. It helps you find the right candidates.
- Job Title: Include the official title the new employee will have.
- Salary: Many job boards will autofill this information if you don’t include it.
- Job Description: Be clear about the activities the new employee will perform.
- Essential Abilities: What skills and software should qualified candidates know before starting?
- Preferred Qualifications: Give examples of experiences that an ideal candidate would have but aren’t essential candidate’s skills.
- Metrics: How you will measure the performance of the new hire.
- Why Choose You: The right candidate will make your company better than it currently is. Work to convince them that what they get from the deal is worth it; otherwise, you get deadbeats who just want to do a job and leave when they clock out.
- Locations: Where is the job located? If you want job seekers from a specific location, include it in the description.
Jessica recommended several important considerations when writing the job description. She suggested:
- Be transparent. You don’t want to waste your time or anyone else’s. Build it based on search engine optimization best practices.
- Write your job descriptions using Search Engine Optimization best practices.
- When comparing employee and business desires, employees want to work from home at a rate three times higher than business owners want to allow. If you can, allow remote work. Jessica specifically said:
I’d rather work from the beach than drive to the office, and so would everyone else.
Step 3. How to find employees to hire
We can’t discuss how to hire employees without discussing where to find them. Some of the most popular ways of finding new employees include:
- New hire referral programs
- Social media
- Job sites
- Recruiters
Try referral programs
Hiring for a small business will normally start by asking employees for referrals. In fact, when an employee refers new hires, the candidates are:
- Four times more likely to be offered the job.
- Five percent more likely to accept the job offer.
- Nearly twice as likely to stay for over four years.
Best of all, the hiring costs are normally $1,000 less than other recruitment methods.
Jessica told us she normally encourages offering a $400 bonus to the employee who refers a new hire. Half is given upon completing the employee onboarding process, and the rest after they complete the probationary period. She warned about problems with referral programs.
These do not create good diversity, but they stick around longer, that’s called retention.
Alumni programs work similarly and can be helpful because any former employee that would refer someone to a company thinks highly of the company.
Post on social media
Jessica pointed out that hiring remote employees is easy on social media. She suggests:
Ask where your employees spend their time and consider posting there.
TikTok is one platform that doesn’t have a ton of competition looking for new hires. She also says your marketing team will love the opportunity to post jobs because it’s something different.
Check out Chili Piper’s TikTok videos:
TikTok employees are remote, and it doesn’t cost anything to create the videos they use for job postings.
Jessica also suggested asking 10 people to share your social media posts to help them gain traction as you hire new employees.
Don’t forget to post on all the standard job boards
Job boards like Indeed, the state employment agency, and other sites are great places to seek job applications. These platforms can also help you with other tasks while hiring a new employee.
For instance, Indeed’s skill tests are written by industry professionals. They get a team of people who have managerial experience or three years of field experience to write the questions and then have other professionals review them.
They even have people without experience in the industry take the tests to get a baseline of what a reasonable score will be when you guess. I’ve participated in all the different roles used to develop surveys because of my diverse job history and educational background. These surveys really will help you find the right person.
Work with recruiters
Recruiting staff can be challenging, but recruiters know how to hire employees for a small business. They do it every day. Jessica told us;
I like to have a roster of passive job hunters so that when I need to hire someone, I know that I have qualified candidates.
Recruiters are normally for higher paying jobs, but if they operate as a staffing agency, they may handle other roles like:
- Performing a background check
- Reporting to each state’s labor department
- Withholding taxes
- Workers’ compensation
- Paying the Social Security Administration
Don’t write off this option when you hire a new employee just because it’s more expensive.
Step 4. How to screen applicants
Screening candidate applications is a matter of matching their skill sets to the job description. In my experience, it’s a mix of art and science. An ideal candidate will be a mixture of personality, skills, and reliability.
Jessica didn’t discuss how to screen applicants before inviting them to an interview, but she suggested some ways to eliminate people from the new hire applicant pool, including:
Pay attention to when they arrive and how quickly they respond to text messages.
Have people watch a transparent video before an interview. If you can scare off undesirable applicants, it makes your job easier.
You can use software to match applicants’ resumes to keywords in your company’s mission and job responsibilities. Select Software Reviews ranks their favorite applicant tracking systems.
Be careful with these because companies recommend copying the job’s responsibilities, changing them to 1-point white font (to be invisible to the naked eye), and attaching them in the footer to be able to get high matches with these systems.
Next, we’ll discuss interview questions hiring managers should and should not ask.
Step 5. How to conduct an interview (and what not to do)
As a small business owner, you will probably perform the steps in the hiring process until you grow enough to need a hiring manager. You’ll conduct interviews, and you need to know how to hire an employee without breaking labor laws.
We’ll cover:
- Starting the interview
- Good questions to ask
- Illegal questions to ask
- Resources
Nothing I say here should be considered legal advice for employers. I am not a licensed HR professional or an attorney.
Starting the interview
Congratulations! You found some people you want to interview. Make sure someone is available to greet people. Hire a temporary worker if necessary, so someone is there to lighten the mood while they wait. Make sure you note when they arrive because it tells you whether they normally:
- Arrive early: 15–30 minutes early likely means they believe if you’re not early, you are late.
- Arrive on time: 15 minutes early to two minutes late means they believe in being on time.
- Arrive late: If you are waiting on them, they likely have a diva mindset. They might view their time as more important than yours. I’d thank them for coming out, but I don’t appreciate the “fashionably late” mentality.
I’m not saying everyone should follow this rule, but it’s easy to rule out people. If someone is always early and views timeliness as respect, do you want to hire them if you’re always late? Probably not. It will cause unnecessary conflict.
Don’t intentionally stress people out with a long wait. You might lose your best candidate because you were disrespectful.
I’ll leave if someone does not acknowledge I’m there within 15 minutes because I have seen every corporation in the world use this strategy. You aren’t that busy. You know you are interviewing people, and you are setting the tone for the entire relationship.
Ask good questions
Jessica told us:
I like to ask ‘tell me about a time…’ questions.
Personally, this type of question frustrates me. We all know that when we respect and have fun with our coworkers, businesses perform better. Skills can be taught so I’d prefer to connect and have a real conversation during interviews. Let’s talk about:
- Our weekends.
- Where the industry is going.
- Our interests.
- Where the company is going.
- How we can create a mutually beneficial scenario.
Ask open-ended questions, but make them meaningful
Jessica also told us:
Don’t ask questions like, ‘What word would you use to describe yourself?
Basically, she is suggesting open-ended questions because the goal is to:
Help them get comfortable. I had one top candidate tell me they believe it is against their constitutional rights to wear a seat belt. That immediately disqualified him from the driving position.
You have to be careful; otherwise, you’ll fall into the next category.
Congratulations! You get to deal with the Labor Board!
Have you heard the term equal opportunity employer? It means you do not discriminate “because of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information” when you hire.
New employee questions should avoid asking about:
- Race
- Age
- Marital status
- Sexual orientation
- Transportation (except for a reliable way to get to work)
- Health conditions
Personally, I would like to see these removed from all applications. It’s an easy way to reduce employment discrimination. Currently, some applications still have workarounds that can lead to discrimination, like this one below that asks for when you graduated high school. Asking for the date of high school graduation can help you establish that anyone who graduated before 1980 is most likely a protected class. If you don’t have that question, you are less likely to discriminate based on age.
Thoroughly read the Equal Employment Opportunity Commission’s prohibited practices before interviewing people so your first hire doesn’t turn into a lawsuit.
Step 6. How to hire the right employees
When you are ready to make an offer, it’s normally best to do it in writing. You’ll want to include:
- Title: You should have this match the title on the job description.
- Start Date: The first day of work is when the employee starts the job.
- Pay: Specify the amount and payment frequency. Make sure it is over minimum wage.
- Type of employment: Specify whether the offer is hourly, full-time, part-time, contract and duration, or for an independent contractor.
- Benefits: List any additional compensation like PTO, health care, etc.
- Intellectual property (IP) guidelines: Specify how intellectual property is used. Who owns it, how can previous IP can be used in the company services? These are mostly in tech-related concepts.
- Non-compete agreement (if applicable): Use these sparingly. Unless the employee has enough information to destroy your company by selling it to a competitor, you probably don’t need these. Here’s a non-compete template.
- Non-disclosure agreement (if applicable): Use a Form to prevent sharing insider information. Disclosing this information could be a violation of security laws. It also can harm the company. These are fairly standard practice.
Step 7. What to do after hiring employees
Once the employee accepts the offer, you’ll need to perform background checks, collect tax forms, and get their banking information. You’ll need these essentials:
- W-4 form: Employee fills this out to specify how to withhold taxes. A W-9 is for tax purposes for independent contractors. These are necessary to calculate payroll taxes and income tax and send employment taxes to the federal government.
- I-9 form: Submit to the federal government to prove employment eligibility.
- E-Verify system: Verify employee eligibility in the U.S. without any paper.
- State tax withholding form: If your state has an income tax, you’ll need to provide employees your state’s tax agency form.
- Direct deposit form: You’ll need to provide a direct deposit form to know how to pay an employee.
- E-Verify system: This is not a form but a way to verify employee eligibility in the U.S.
Bonus Step: How to improve your employee retention
If you’re having problems retaining employees, look at your business to see where you can improve. You may want to:
- Improve your benefits package.
- Pay more.
- Recruit staff.
- Add transparency to the steps of the hiring process.
- Perform exit surveys.
Jessica suggested:
If you are hiring lots of people, you may want to implement hiring automation software, but that is only beneficial if you need to hire five or more people consistently.
She also said she specifically looks for restaurant management experience because restaurant managers are quick on their feet and have to deal with problems on the fly.
Friendly Reminder About Hiring
Small businesses hire employees that help make their business better. You give employees a paycheck, while they give you the majority of their waking life. I promise you we cannot pay employees enough to thank them for that. Help them believe they are part of something bigger.
At this point, you know how to hire employees for small business operations. There are numerous legal considerations and tax advice considerations that only professionals in the employment field can answer. Make sure to consult the proper profession.
If you have questions about other types of employment arrangements, we’ll answer some frequently asked questions next.
Frequently Asked Questions About Hiring
How to hire 1099 employees
1099 employees are more commonly referred to as independent contractors or subcontractors. Companies will try to skirt costs by considering all employees 1099 workers, but there are hefty fines if the federal or state labor agency establishes you were skirting tax laws. You’ll want to follow the steps in this blog including:
- Prepare to hire people. (You won’t need to do tax deductions.)
- Create a job description.
- Find applicants.
- Screen job hunters.
- Interview potential candidates.
- Offer the best candidate a job.
- Onboard employee. (You’ll use a W-9 instead of a W-4.)
Check out our interview with Bernard who runs Busy B’s Barber Shop. He rents chairs to other barbers to increase revenue and doesn’t need employees because each chair is its own business.
How to hire your first employees
Before you hire your first employee, you’ll need to focus on Step 1 of this blog, which includes:
- Establish what you need to hire employees to do.
- Get an EIN if you don’t already have one.
- Create an employee handbook.
- Establish a benefits package.
- Get a payroll provider.
- Purchase workers’ compensation.
- Get workplace posters.
- Follow the rest of our guide.
How to hire employees for a startup
Hiring startup employees can be more challenging because they may need to fill a variety of roles. You’ll want to follow the same basic process with considerations on:
- Prepare to hire people. (Consult a lawyer about alternative forms of payment.)
- Create a job description. (Make sure to include information about the alternative payments.)
- Find applicants with diverse backgrounds.
- Screen job hunters.
- Interview potential candidates and make sure they understand the pay. Have a lawyer advise you regarding communications if you plan to offer pay in stock (because you can’t ask about their finances).
- Offer the best candidate a job.
- Onboard the employee.
How to hire diverse employees
It can be difficult to hire diverse employees because people tend to refer employees who are like them. Try some of these tips to hire a more diverse workforce.
- Go to college job fairs.
- Use TikTok to find employees.
- Ask minority influencers to help you find candidates.
How to hire part-time employees
If you can, I’d suggest looking at the 1099 employees and selecting freelancers for all positions that you can have work part-time and remotely. If they cannot work remotely, you’ll follow the process in this blog. Just make sure to take the following considerations into place:
- People spend time getting ready for work, going to the location, and going home. Let them choose how they want to get their hours. They might prefer six 4-hour days or three 8-hour days, and with a little creativity, you can work with that either way.
- Make sure to keep their shifts consistent. Unless you are paying them $5K per month for part time work, they need a second job.
- The quality of employees is equal to the quality of treatment. They know you are hiring part time to avoid benefits. Be nice. Seriously. Low-paying jobs tend to be customer-facing. That means they deal with rude people all day long. Treat them well. Otherwise, they’ll run away like an ostrich.
Then they quit, and you are in a worse position.
How to hire temporary employees
Seasonal or temporary employees are commonly hired in retail, tax services, and other seasonal companies. There’s nothing wrong with hiring people temporarily, but be disclosive about how it will work. Before you start temporary hiring, check the state unemployment laws. Each state has different thresholds for when unemployment insurance starts.
When you hire large groups of staff, you want to time it where you don’t pay months of unemployment insurance to all the temporary hires. While paying unemployment is less than paying their full wages, it’s better to have the temporary job stay below the minimum time or monetary conditions.
How to hire good employees
Hiring good employees is simple: Give them a good place to work. What qualifies as a good place to work?
- Industry-leading pay: Just disclosing your pay for each position improves your success. In Colorado, job postings dropped by 8.2% while the participation rate increased by 1.5%. If you really want to lead your industry in pay, the average 1-bedroom is $1,326 per month and people have to make three times that ($3,978 or $24.86 per hour). I know that sounds crazy, but at those wages, you’ll be getting much better candidates. Even $2 over the median pay will normally lead to better employees.
- Generous time off: People have lives. They have stuff come up. We all know we don’t own our employees, but sometimes we get so focused on our own problems we forget to be compassionate about others. If you fall into this category, it’s your responsibility to train yourself to be more compassionate. It’s hard. I struggle with it every day, but we have to try to be good to those around us. Don’t make them beg for time off.
- Remote work when possible: Many positions don’t require people to be in the same space. If they can work from home, let them. You just need systems that make it easy to do so. The additional costs should be made up by better efficiency.
- Don’t skimp on benefits: Let people choose the benefits that are right for them. With medical insurance, don’t offer minimum wage employees plans with $10K deductibles. They are unusable.
How to hire international employees
If you are hiring international employees, they will need a work visa. You are allowed to ask if they are legally allowed to work in the United States, but not if they have a work visa, which requires a sponsor. If they require sponsorship, you’ll have to choose the proper sponsorship amongst 11 options. The most common are the H1B1, H2A, and H2B. You can find out more on travel.state.gov.
How to hire remote employees
Hiring remote employees is easy. There are a ton of platforms including:
- Upwork
- Freelancer
- Fiverr
- Toptal
Upwork has a list of more than 20 freelancing sites. You can hire freelancers for short-term and long-term and fixed-price or hourly contracts. This gives you access to a global pool of talented job candidates that have been ranked by other professionals.
What Part of the Hiring Process Do You Find Most Challenging?
Now you know how to hire employees. Is there a specific part of the process you find challenging? What aspect of hiring would you like us to write more about?
Author
Brandon Boushy
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We polled our viewers about what prevents them from starting a business, and 49% of you cited funding as the main reason. So we decided to dig in to find out how to get a $100k business loan.
National Business Credit (NBC) is a FinTech company started by Joe Camberato in 2007, and it has helped small businesses get over $2 billion in business loans. We partnered with National Business Credit because they help business owners get the funding they need. NBC has over 97% 5 star reviews on Trustpilot. In addition, they have the following rankings:
You’ll need to make sure you have a good credit score before you apply for a $100,000 business loan. Use Credit Karma to find out what you need to fix to build your personal credit and how much a decision will improve your credit. For business credit, consider using:
The answer to this question varies dramatically based on a variety of factors. One of the biggest factors is whether you have employees or not. The Federal Reserve does a Small Business Credit Survey annually and breaks the statistics into employer and nonemployer firms (link to reports). Based on the 2022 reports, the following conclusions can be made:
You’ll need 10% to 30% depending on the loan amount and type of SBA loan, but you can get a bridge loan for a down payment for SBA loans and other business needs. You can also use business assets as the down payment for a secured loan.
You can get a term loan, which is a lump sum payment upon approval, and then make monthly payments for the duration of the loan. On average, you can expect a $100,000 loan amount to include loan payments of $8,833.33 per month for 12 months or as low as $883.35 monthly payment for a 10-year business loan at 6% interest. Exact terms will vary based on your credit score, interest rate, lender, and other factors. Learn more about NBC term loan options.
Merchant cash advances provide a loan in exchange for a percentage of your daily sales to pay off the loan. They may have higher rates, but can be helpful for increasing your gross profit margin if you are in an inventory-based business or want to scale subscription-based models quickly. They are also easier to get with bad credit because the payment is fully automated. They are also one of the lowest threshold loans.
You can get between a $10K and $5 million merchant cash advance with no personal guarantee or minimum credit score as long as you have been operating for at least six months. Hear more about it directly from Joe below:
[su_youtube url="https://youtu.be/Ixx40PRYQTs"]
You can get commercial mortgage financing from National Business Capital if you have:
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Find out how to get a 100K business loan with National below:
[su_youtube url="https://youtu.be/j4PXx--Keeg"]
In addition, they have found a way to reduce the time to approval from 180 days to 45 days. Keep reading to find out how.
In case you are applying for an SBA loan, NBC has mastered the process of getting SBA business loans. $100K is fairly easy to accomplish. In fact, they can help you get the loan early with the Hybridge® SBA Loan program. This program requires a 685 personal score and can help you get funding in less than three days. This is how the process normally looks:
Check out their video to learn more about how the Hybridge® SBA Loan works:
In addition to the bank statements that National Business Credit requires, you’ll also need the following requirements to get traditional bank loans:
You’ll need to provide most lenders a stack of documents for them to establish how to approve your business loan. $100K isn’t that much in the long term, but you’ll need to provide:
Once you have been approved for the loan, it’s time to start investing in growth. Check out our blog about growing a business for ideas.
- 1 out of 118 Alternative Financial Services
- 1 out of 30 Business Development Services
- 1 out of 246 Non-Bank Financial Services
- 2 out of 103 Financial Institutions
- 3 out of 282 Financial Consultants
- 4 out of 331 Business to Business Services
How to Get a $100K business loan
[su_note note_color="#dbeafc"]Just follow these seven steps to apply for a $100K loan:- Build your credit score.
- Consider business loan types.
- Choose a lender to service your business loan for 100K.
- Prepare your documents.
- Update your business plan.
- Apply for a business loan.
- Build for growth.
Step 1. Build your credit score
You’ll need to make sure you have a good credit score before you apply for a $100,000 business loan. Use Credit Karma to find out what you need to fix to build your personal credit and how much a decision will improve your credit. For business credit, consider using:
- NAV: Similar to Credit Karma for businesses. Paying $40 (rate subject to change) boosts your credit and helps get better loan options as your credit profile improves.
- Divvy: A free financial management platform, payment processor, and credit card provider. They even have a secured credit card for businesses that are building credit.
What credit score is needed for a $100K business loan?
You’ll need a DUNS Number from Dun & Bradstreet (D&B) to maximize your business credit approval odds. Get an EIN if you don’t already have one. According to Christopher Mondragon, the owner of a $1.4 million cleaning business: [su_quote]Small business lenders typically require a score of 80 to 100 (out of 100) to base your loan terms strictly on the business credit score.[/su_quote] Check out our interview about building business credit with him below: Until your business score reaches 80, expect lenders to require your personal score and possibly a secured loan before offering you an unsecured line of business credit. Fortunately, many of the National Business Credit small business loans don’t require business credit scores. As long as you meet the minimum personal credit score and have cash flow or asset backed loans, you’ll be able to qualify for many of the loans offered through the NBC alternative lenders marketplace.How hard is it to get a $100K business loan?
The answer to this question varies dramatically based on a variety of factors. One of the biggest factors is whether you have employees or not. The Federal Reserve does a Small Business Credit Survey annually and breaks the statistics into employer and nonemployer firms (link to reports). Based on the 2022 reports, the following conclusions can be made:
- Your odds of getting approved go up when you have more than $100K revenue. If you have employees, they are even better.
- Big banks loan the most, small banks approve the highest percentage, but non-employers tend to go to credit unions and online lenders disproportionately.
- If you want more than $100K, you better have employees. Employers are 10 times as likely to make over $1 million and four times more likely to have over $100K in debt than solopreneurs.
| Employer | Non-Employer | Employer-Non | |
| Less than $100K revenue | 22% | 78% | -56% |
| $100K to $1 million | 52% | 20% | 32% |
| $1 million to $10 million | 22% | 2% | 20% |
| $10+ million | 4% | 1% | 3% |
| Pursued pandemic funding | 77% | 71% | 6% |
| Received funding | 65% | 59% | 6% |
| Probability of success | 84% | 83% | 1% |
| Have outstanding debt | 74% | 57% | 17% |
| Some, but less than $100K outstanding debt | 34% | 47% | -13% |
| Big banks | 56% | 48% | 8% |
| Small banks | 47% | 34% | 13% |
| Business financial services companies | 27% | 11% | 16% |
| Credit unions | 13% | 20% | -7% |
| Online lenders | 10% | 11% | -1% |
| Highest approval odds (SMALL BANKS) | 66% | 58% |
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How to get a $100 k business loan
The requirements vary depending on the lender, but NBC normally requires:- $120K in annual revenue
- 6+ months in business
- 580+ personal credit score (some are as high as 700)
How much downpayment do I need for a SBA loan?
You’ll need 10% to 30% depending on the loan amount and type of SBA loan, but you can get a bridge loan for a down payment for SBA loans and other business needs. You can also use business assets as the down payment for a secured loan.
Step 2. Consider these business loan types
We’ll cover nine types of business loans for $100K that you can get at National Business Capital and other business lenders. We’ll include:- Secured vs unsecured business loans
- $100K term loans
- $100,000 business lines of credit
- Small business loan for mortgaging a building
- $100K equipment loans
- $100,000 secured loans
- Hybridge™ SBA Loans
- $100K merchant cash advances
- $100,000 business loan for franchise startups
- Other Small Business Administration loans
Secured vs Unsecured Business Loans
Until your business score reaches that 80, expect lenders to require your personal score and possibly a secured loan before offering you an unsecured line of business credit. Let’s look at the personal score next.Small Business Term Loans
You can get a term loan, which is a lump sum payment upon approval, and then make monthly payments for the duration of the loan. On average, you can expect a $100,000 loan amount to include loan payments of $8,833.33 per month for 12 months or as low as $883.35 monthly payment for a 10-year business loan at 6% interest. Exact terms will vary based on your credit score, interest rate, lender, and other factors. Learn more about NBC term loan options.
Business Line of Credit
A business line of credit is one of the most flexible loans you can get. It operates similar to a credit card where you are allowed a maximum amount and you pay interest on the amount you use. You can continue to use the remaining financing as you pay lines of credit back. This is ideal for most small businesses that have different pay periods. Go apply for credit lines or check out their video below: [su_youtube url="https://youtu.be/ucuGYaB4VlI"]Equipment Financing
These business loans are for getting equipment you need to operate your business. As long as you have decent credit, you can get equipment financing fairly easily. Get an equipment loan from National Business Credit (as long as you have a 650 FICO or six months in business and $120K annual revenue). If you don’t pay the loan, the equipment gets repossessed and sold.Asset Based Lending
SImilar to equipment financing, you can use the following assets to secure business funds:- Purchase Orders: When you have ongoing purchase orders of over $100,000, NBC helps you get the cash to fulfill the order and the invoice gets paid directly to the lender who takes their cut and sends you yours. Doesn’t require collateral, minimum credit scores, or time in business.
- Accounts Receivable: Get up to 80-90% of accounts receivables and invoice factoring as cash upfront (as long as you have more than six months in business and $40K+ monthly receivable accounts). You can even choose which accounts you want to use invoice factoring to get a $100K loan for business.
- Inventory: These require collateral in the form of existing inventory but can help you buy more inventory or pay other expenses.
- Real Estate: Use existing land and buildings to secure a business loan to expand your business.
- Bonds, Stocks, and Crypto: NBC does not specifically mention these as an available loan type, but some lenders offer such loans. Be careful because cryptocurrencies and stocks are highly volatile. If the market drops below a certain level, the online lender may require additional funds or liquidation of the assets.
Merchant Cash Advances
Merchant cash advances provide a loan in exchange for a percentage of your daily sales to pay off the loan. They may have higher rates, but can be helpful for increasing your gross profit margin if you are in an inventory-based business or want to scale subscription-based models quickly. They are also easier to get with bad credit because the payment is fully automated. They are also one of the lowest threshold loans.
You can get between a $10K and $5 million merchant cash advance with no personal guarantee or minimum credit score as long as you have been operating for at least six months. Hear more about it directly from Joe below:
[su_youtube url="https://youtu.be/Ixx40PRYQTs"]
Franchise Financing
Franchises are a common way to start a business if you want to skip the phase of figuring out business processes and start a recognized successful business model. Small business loans for these companies are easier to get in higher volumes because the lenders already have data on the success of the businesses. The lender you use may require down payments, secured loans, or other requirements for a $100K startup business loan. Learn more about NBC’s franchise loan options.Commercial Mortgage Financing
You might want to consider a commercial mortgage from National Business Capital if you are looking to buy commercial real estate.They are available in 15 to 25 year mortgages with values of $500K to $10 million, but they’ll help grow the net worth of your business. They’ll also help you qualify for a $100K asset-based business loan in the future. Many of these are backed by the SBA, which means they are small business loans with low interest and long term payments.What’s required for a National Business Capital Commercial Mortgage Loan?
You can get commercial mortgage financing from National Business Capital if you have:
- One-page application
- Three months bank statements
- Over two years in business
- $250K+ annual revenue
- 620+ FICO score (lower may qualify in some scenarios)
Small Business Administration Loans
National Business Capital helps you find SBA (7)a and 504 loans and helps you remove some of the pain points of meeting the requirements. To qualify for these loans you need the items in the table below: [su_table responsive="yes" alternate="no" fixed="yes"]| Important Items | SBA 7(a) | SBA 504 Loan |
| Government Backed | Yes | Yes |
| Real Estate | Yes, but not normally | Yes, occupy 51% |
| Typical Lending | Under $350,000, but up to $5 million. | Up to $5 million |
| Down Payment | 10% down for startups | 10% down |
| Primary Use | Working capital, buyouts, startups | Real estate |
| Where Does the Credit Show? | Business Credit | Business Credit |
| Minimum Credit Score | 680 FICO or 80 D&B score | 680 FICO or 80 D&B score |
| Tax Returns | 2-3 years of business tax returns and 3 year personal | 2-3 years of business tax returns and 3 years personal |
| Business Plan | Solid Business Plan | Detailed Business Plan |
| Secure or Unsecured Loan? | Unsecured Business Loan will normally require business credit history with 80+ score; Secured can be achieved easier | Unsecured Business Loan will normally require business credit history with 80+ score; Secured can be achieved easier |
Hybridge® SBA Loan
In case you are applying for an SBA loan, NBC has mastered the process of getting SBA business loans. $100K is fairly easy to accomplish. In fact, they can help you get the loan early with the Hybridge® SBA Loan program. This program requires a 685 personal score and can help you get funding in less than three days. This is how the process normally looks:
Check out their video to learn more about how the Hybridge® SBA Loan works:
Step 3. Choose a lender to service your business loan for 100K
There are at least 15 different types of business loans to choose from with over 687 different lenders. That is a lot of options when you start to compare lenders that offer a business loan of 100K. That’s why we recommend starting your search with National Business Capital. They have relationships with over 75 companies offering secured and unsecured loans. That means you fill out one application and get the most competitive interest rates and loan terms from 11% of the business loan providers. If you want to look at other traditional banks, online lenders, and other financial service providers, remember to take your time and thoroughly research the options. Yes, it’s a lot of work.Traditional Banks vs Online Lenders
In addition to the bank statements that National Business Credit requires, you’ll also need the following requirements to get traditional bank loans:
- Business financial statements
- Business legal documents
- Business’s credit history
- Business plan
- Two to three years of annual sales
- Personal guarantee for the bank’s financial protection
- Personal bank account
- Legal documents
- Up to 180 days to get approved
Step 4. Prepare documents
You’ll need to provide most lenders a stack of documents for them to establish how to approve your business loan. $100K isn’t that much in the long term, but you’ll need to provide:
- Documentation of personal and business taxes
- Cash flow statements
- Profit and Loss (PNL) statements
- Documentation for all businesses and personal loans
- Any legal proceedings that haven’t been updated yet.
- Business plan
- Vendor and client contracts
Step 5. Update Your Business Plan
Another key step in the consideration for how to get 100K business loan approval is updating your business plan. If you haven’t created a plan yet, check out our planning blog or watch the video below: [su_youtube url="https://youtu.be/Seac5PbUZXk"] You’ll want to update:- Your business timeline (sometimes referred to as a roadmap)
- The organizational structure
- Five year forecast
- Anything that had material changes
Step 6. Apply for the Business Loan
Now you just need to fill out the application. Provide all documentation and respond to any loan requests the loan originator makes. NBC’s application is super easy and takes a couple of minutes to be considered for all their potential loans. Depending on the loan you choose, you’ll have to provide other documents based on the loan term. With traditional lenders, this process may take six months or longer, but you can get most of the following business loans in a week or less through NBC:- $10K Business Loan
- $25K Business Loan
- $50K Business Loan
- $100K Business Loan
- $200K Business Loan
- $250K Business Loan
- $300K Business Loan
- $350K Business Loan
- Startup Business Loan
- Hybridge® SBA Business Loan
Step 7. Invest in Growth
Once you have been approved for the loan, it’s time to start investing in growth. Check out our blog about growing a business for ideas.
Try our $100K business loan calculator
If you want to calculate interest on loan amounts, check out our loan payment calculator. It will work for any amount. You can change the:- Type of loan
- Loan amount
- Loan term
- Interest rate
- Compounding schedule
- Down payment
Keep Growing Your Business!
We hope you’ve found this guide on getting a $100K business loan helpful. You might also want to consider how to get a 200K business loan. The steps are the same, and most lenders will approve up to $200K fairly easily. As long as you can afford the payment, the extra cushion will be helpful. What would you do with your $100K business loan?
If you’re considering becoming a convenience store (“c-store") owner, you’re in good company. According to the National Association of Convenience Stores (NACS), the United States boasts over 154,000 convenience stores that generate $233 billion a year in sales. What's more, sales at 75% of c-stores grew for the 17th consecutive year in 2019. That’s a lot of years of sales growth! We'll show you how to open a convenience store and get in on that action.
What’s driving this growth?
Convenience stores have come a long way in recent years, benefiting from important changes in consumers’ need for convenience and speed and their willingness to pay for it. The need for small-scale convenience stores that provide basic consumer items has remained strong in recent years.
If those growth prospects are not enough to pique your interest in opening a convenience store, know this:
Amazon recently decided to enter the convenience store business – as a supplier. It is also piloting cashier-less convenience stores known as “Amazon Go” stores in Seattle.
We all know that where Amazon goes money follows!
You don’t have to be a big company like Amazon to run a successful c-store, however. 60% of the convenience stores in the USA are owned by individuals.
If the idea of starting your own store sounds intimidating, then you can consider buying an existing one.
Before taking steps to learn more about how to open a convenience store, you’ll want to carefully weigh the pros and cons of c-store ownership. We’ve summarized the main ones below.
Ah, this is the million-dollar question!
Can you in fact make a million dollars owning and running a convenience store? Well, that depends on a lot of things.
Historically, average convenience store profit margins have been quite low, hovering around 2% for independently owned stores.
Convenience store owners must constantly manage high fixed costs including rent, inventory, and operating costs like utilities while optimizing product and pricing mix and attracting foot and car traffic.
C-stores of course mark up their products significantly over grocery stores or other retail outlets to account for the convenience factor and to take advantage of impulse buying.
Typically, markups are as much as 10%-20% more than what a regular grocery store would charge, and sometimes higher for a really in-demand product.
A key to maximizing your profit margin is knowing your product margins and getting the product mix and display correct in your store. Below is a chart that shows the average gross margins for different types of products.
Most people assume that cigarettes and alcohol have the biggest margins. In fact, health and beauty and good old fashioned candy are among better choices for maximizing profit margins.
How much do convenience store owners make?
There is so much that factors into what you could earn as a convenience store owner, it’s hard to gauge what a typical take home store owners' salary would be. According to Indeed.com, the average convenience store owner takes home $66,000 a year.
Estimates provided by c-store owners on Quora and Reddit indicate that after a few years you can take home anywhere from $75,000 - $100,000.
The advantages of buying an existing c-store are many. Depending on the existing business situation, they can include:
37% of c-stores are part of a chain such as 7 Eleven or Circle K. There’s a good reason for this. A franchised convenience store has many benefits, not the least of which is an established brand name.
The parent company provides you with guidelines and procedures, inventory lists, and pays for national marketing and advertising.
When purchasing or opening your own store, you would of course pay for all of these services out of your (already thin) profits.
What other benefits do you get with a franchise c-store?
Franchises provide many benefits over starting a store from scratch such as:
Typical licenses and permits that you will need to run a convenience store include:
No matter how great your product mix, what your pricing is, or how much you advertise, if you choose a location that does not bring you a lot of customers looking for “convenience” then you won’t be successful. This is true whether you are opening a brand-new store or purchasing an existing convenience store.
How do you find foot traffic numbers? There are several ways that you can gauge traffic for a location:
It’s especially important to build customer loyalty if you don’t have a national brand backing your convenience store.
Keep customers coming back for impulse buys or favorite products and create a community out of your store by rewarding frequent purchases and providing interesting discounts.
The knock-on effect will be more frequent visits, impulse purchasing and higher inventory turnover.
It’s easy to just say that everybody’s your customer, given the common nature of convenience stores across the country. This is a big mistake.
Due to the huge variety of potential products you could sell, the more you understand your potential customer base, the easier and less expensive it will be to stock the shelves with products that sell at attractive margins and high volumes.
Some aspects to understand about your customers are:
A big part of running a convenience store is the management of inventory purchases. Inventory management drives your margins.
If you purchase a convenience store, you’ll inherit a set of vendor relationships and associated products, which may or may not be a good thing.
As part of your business planning, you’ll want to take a look at some of the biggest vendor contracts to determine if they are fair and if there is any room to negotiate to improve margins, working capital or product mix.
You’ll purchase most of your inventory through wholesalers and distributors. These may be wholesalers who carry nearly all the inventory you want, or vendors who specialize in different types of products.
You can expect to carry at least 2,000 inventory items at your convenience store.
Generally, your vendor choices should be driven by product choices that your customer demographic wants. It’s also a good idea to “spread the wealth” among a few vendors so as not to be reliant on one.
You may also save costs in doing so and find more inventory choices to suit your specific customer needs.
If you are opening up a convenience store from scratch, you’ll have to identify wholesalers and SKUs you want to sell yourself.
Vendors will also conduct a credit check. If you have poor credit, you’ll find yourself in a not so great negotiating position. At any rate, most vendors will require you to pay upfront for your first order.
A good place to start looking for financing is by contacting your bank to see if they can arrange a Small Business Administration (SBA) loan.
The Small Business Administration's (SBA) 504 and 7(a) loan programs are both popular alternatives.
The SBA backs typically 75% of the full loan amount so that banks and lenders assume less balance sheet risk on the loan. Loan terms are structured based on the assets being financed.
Keep in mind that when you seek financing from a bank, you must have good credit and be willing to put up about 15%-20% of the startup costs.
For buyers of an existing convenience store, it may be possible to negotiate financing with the seller. If you don’t have great credit and/or have some money to put down, this is a great option for opening your own convenience store.
With this kind of financing, instead of receiving the full purchase amount, the seller finances all or part of the purchase price.
You negotiate with the seller the interest rate and terms of the financing. One benefit of seller carry financing is that the seller will be supportive of the transition and should offer training to ensure that the buyer is successful in taking the business operations over.
The Pros and Cons of Owning a Convenience Store
Before taking steps to learn more about how to open a convenience store, you’ll want to carefully weigh the pros and cons of c-store ownership. We’ve summarized the main ones below.
Pros
- Freedom to be your own boss - Join the ranks of 32 million small business owners.
- Steady customers – Generally, convenience store customers are based on a neighborhood or location and become regular visitors. This reduces the need to constantly acquire new customers and provides consistent business and market data.
- Financial stability – Although they sometimes have low margins, convenience stores typically don’t generally experience financial highs and lows associated with economic booms and busts.
- Relative ease to startup – Compared to many businesses such as restaurants, convenience stores are fairly straightforward to set up once you’ve identified what you need.
Cons
- High staff turnover – Staff issues can eat into profit margin in the form of training time and costs, mistakes, inventory theft, and illegal actions such as not carding for alcohol/tobacco sales, etc.
- Security and safety issues – Historically convenience stores have been targets for theft and crime.
- Inventory losses – Convenience stores are particularly prone to inventory losses both through theft and product spoilage. These challenges require constant management and result in lower margins.
- Long hours – If you are an independent owner you may find yourself having to work long hours to keep margins intact, especially during your first 2-3 years in business. Many customers expect to be able to go into a store late at night or early in the morning 7 days a week.
- Startup costs – It can cost typically between $50,000 and $100,000 to startup a convenience store. But this number can go as low as $10,000 (unlikely) and up to $ 1 million (if you have deep pockets). Much of this startup expense is invested in initial inventory, rent and deposits, and equipment.
Is Owning a Convenience Store Profitable?
Ah, this is the million-dollar question!
Can you in fact make a million dollars owning and running a convenience store? Well, that depends on a lot of things.
Historically, average convenience store profit margins have been quite low, hovering around 2% for independently owned stores.
Convenience store owners must constantly manage high fixed costs including rent, inventory, and operating costs like utilities while optimizing product and pricing mix and attracting foot and car traffic.
C-stores of course mark up their products significantly over grocery stores or other retail outlets to account for the convenience factor and to take advantage of impulse buying.
Typically, markups are as much as 10%-20% more than what a regular grocery store would charge, and sometimes higher for a really in-demand product.
A key to maximizing your profit margin is knowing your product margins and getting the product mix and display correct in your store. Below is a chart that shows the average gross margins for different types of products.
Most people assume that cigarettes and alcohol have the biggest margins. In fact, health and beauty and good old fashioned candy are among better choices for maximizing profit margins.
How much do convenience store owners make?
There is so much that factors into what you could earn as a convenience store owner, it’s hard to gauge what a typical take home store owners' salary would be. According to Indeed.com, the average convenience store owner takes home $66,000 a year.
Estimates provided by c-store owners on Quora and Reddit indicate that after a few years you can take home anywhere from $75,000 - $100,000.
Options for Opening a Convenience Store
There are three options for owning a convenience store:- Buy an existing store
- Open a franchise
- Start a convenience store
Option #1: Buy a convenience store
The advantages of buying an existing c-store are many. Depending on the existing business situation, they can include:
- An existing customer base
- Historical financial and other key information (i.e. foot traffic, rent history, product data)
- Ability to learn from the existing owner how to run the business
- Potential to purchase the business at a discount (i.e. if the owner wants to retire) and/or improve margins with better management
- No need to negotiate a new lease, supplier contracts, and other contracts
- Licenses and permits are in place
- Existing employees who know what to do
- Has all equipment been inspected recently and maintained? How old is it?
- Is the point of sales (POS) system modern? Does it track inventory and produce a balance sheet? Is it secure?
- What is the customer demographic? Do they have disposable income?
- How many vendors are there to manage and what are the contract terms?
- Is the store profitable and how can you be sure? Are the financials audited? Can you live off of these financials?
- If there are gasoline pumps on the property have they passed inspection recently?
- What are the best-selling products? If they are cigarettes and alcohol are you comfortable with those kinds of products being the bulk of your sales?
Option #2: Buy a franchise
37% of c-stores are part of a chain such as 7 Eleven or Circle K. There’s a good reason for this. A franchised convenience store has many benefits, not the least of which is an established brand name.
The parent company provides you with guidelines and procedures, inventory lists, and pays for national marketing and advertising.
When purchasing or opening your own store, you would of course pay for all of these services out of your (already thin) profits.
What other benefits do you get with a franchise c-store?
Franchises provide many benefits over starting a store from scratch such as:
- Generally lower startup costs
- Faster time to profitability (generally)
- Guidance and support from the franchisor for both startup and ongoing operations
- National marketing and increased visibility
- Tradeoffs to consider with a franchise model are:
- Ongoing fees that must be paid to the franchisor out of profits
- Lack of total control over business policies and decisions
- Lack of control over brand
- Reliance on the financial strength of the parent company
Option #3: Start a convenience store
The advantages and disadvantages of opening your own convenience store from scratch are the opposite of purchasing a franchise or an existing store. You’ll have total control over:- Vendor and product selection
- Choice of location
- Lease negotiation
- Store layout and equipment
- Profit margins
Convenience Store Startup Costs
The cost of opening a c-store varies tremendously and depends on a number of factors. These include:- Square footage
- Location
- Foot and car traffic
- Equipment
- Initial product mix and inventory level
- Equipment such as point of sale systems, refrigeration, and shelving
- Licenses and permits
- Remodeling and repairs
- Security systems
- Signage
Licenses You Need to Open a Convenience Store
Typical licenses and permits that you will need to run a convenience store include:
- Sales tax permit
- Employer identification number (EIN)
- City or county business license
- Occupancy permit
- Alcohol and tobacco license
- Health and safety permits
- Lottery license
- Gas permits (i.e. EPA inspection)
How to Successfully Open and Run a Convenience Store
When you’re operating a small business on fairly thin margins, it is critical to use every trick you can to manage your operations for profit. Following are 10 tips for increasing your chances of successfully running your convenience store.Step 1: Create a store business plan
Because running a convenience store successfully means that you must be very attentive to your margins, it’s a good idea to create a business plan before starting up. In fact, if you require bank financing to open or buy your store, you will need to put together a business plan. This is true even if you are buying a franchise. Don’t fret at the idea of doing this! This pre-requisite to opening a convenience store will help you to be more successful. When you put together your plan, you’ll have to gain an understanding of your market including competitors and customers. You’ll have to investigate and understand business drivers such as foot traffic, pricing and product mix and how these interact to drive revenue. Part of creating your plan will involve costing out your startup needs and operating costs. You’ll have to put it alltogether in the form of financial forecasts that can demonstrate to a bank (and to yourself) that you understand how to manage your margins and what the drivers of your business success will be. Scared of business plans? Don’t be! Check out Liveplan business plan creation software, an easy to use software that walks you through the steps of creating your plan and provides a lot of resources. Even better, Liveplan provides an example of a convenience store business plan created using Liveplan. (Note: do not copy and paste!)Step 2: Select a good location
No matter how great your product mix, what your pricing is, or how much you advertise, if you choose a location that does not bring you a lot of customers looking for “convenience” then you won’t be successful. This is true whether you are opening a brand-new store or purchasing an existing convenience store.
How do you find foot traffic numbers? There are several ways that you can gauge traffic for a location:
- Sit outside and count customers for several hours (or pay someone to do this)
- Get this information from the existing store owner
- Ask the landlord (although you will probably want to verify numbers)
- Ask other businesses adjacent/nearby
- Use a service like locationgenius that tracks foot traffic via mobile phone data
Step #3: Focus on financial management
Be proactive with your financials rather than waiting for problems to crop up. Study individual product sales and margins and tweak your purchasing and pricing accordingly. Notice discrepancies and sales and inventory which may indicate theft. Experiment with pricing and new items and track results. Watch your cash flow like a hawk. Constantly look for ways to lower costs, for example by negotiating new vendor contracts or cutting items that spoil quickly. In a business based on high volumes and low margins you want to always be trying to optimize between sales volumes and price. For a convenience store, sometimes a discount of just $.10 on a soda can result in a 300% increase in sales volumes.Step #4: Reward your customers
It’s especially important to build customer loyalty if you don’t have a national brand backing your convenience store.
Keep customers coming back for impulse buys or favorite products and create a community out of your store by rewarding frequent purchases and providing interesting discounts.
The knock-on effect will be more frequent visits, impulse purchasing and higher inventory turnover.
Step #5: Maintain a clean store
One of the drawbacks of a convenience store is that it sees high volumes of people daily. This makes it hard to keep bathrooms, floors, food areas, trash cans, etc. clean. For your store’s reputation, customer loyalty , and sales, you must maintain clean food spaces and bathrooms. Think about it, would you eat a hot dog from a place where employees use a dirty bathroom or leave spilled nacho cheese on the floor?Step #6: Monitor your competition
If the store a block down sells coffee for $.99 and you are selling it for $1.19, you should consider that either you need to have much better coffee than your competitor and/or understand that some people and their impulses will go to your competitor. In the convenience store business, customers do pay attention to prices because they know they are paying a premium every time they go into a store.Step #7: Invest in good technology and systems
It is critical for security and financial management to have an up to date point of sale (POS) system. A point of sales system helps you manage and keep track of sales, vendors, calculate store profit, and more. In addition, you’ll want to invest in state of the art anti-theft and security equipment like CCTV cameras, alarms, and cash register monitors to prevent losses, which you can use the point of sale system to keep track of.Step #8: Understand your customers
It’s easy to just say that everybody’s your customer, given the common nature of convenience stores across the country. This is a big mistake.
Due to the huge variety of potential products you could sell, the more you understand your potential customer base, the easier and less expensive it will be to stock the shelves with products that sell at attractive margins and high volumes.
Some aspects to understand about your customers are:
- Are the customers regulars who rely on the store for everyday goods? An example would be a businessperson stopping in for a coffee and donut every day.
- Do the customers come in for the community? If so, you want your interior to be inviting and perhaps offer a standup eat-in counter and train employees to be extra friendly.
- Are customers in a rush to get in and out? If so, you want the most popular last-minute products like milk and bread to be easily visible and accessible. You’ll want to staff up appropriately and have a quick payment system.
Step #9: Understand product and consumer trends
Remember a couple of years ago when fidget spinners were flying off the checkout counter of every convenience store? New always sells. Keep on top of what is selling and what isn’t and follow new trends such as CBD products, ready to eat meals and good coffee. Not sure where to start following c-store trends? Some good industry resources for tracking trends in the c-store industry include: Convenience Store Decisions Magazine Convenience Store News Online Convenience Store News for Small Operators In addition, it’s a good idea to be a member of convenience store trade associations:- National Association of Convenience Stores
- American Petroleum and Convenience Store Association
- State Associations for Convenience Stores
- National Association of Truck Stop Operators
Step #10: Manage purchases well
A big part of running a convenience store is the management of inventory purchases. Inventory management drives your margins.
If you purchase a convenience store, you’ll inherit a set of vendor relationships and associated products, which may or may not be a good thing.
As part of your business planning, you’ll want to take a look at some of the biggest vendor contracts to determine if they are fair and if there is any room to negotiate to improve margins, working capital or product mix.
You’ll purchase most of your inventory through wholesalers and distributors. These may be wholesalers who carry nearly all the inventory you want, or vendors who specialize in different types of products.
You can expect to carry at least 2,000 inventory items at your convenience store.
Generally, your vendor choices should be driven by product choices that your customer demographic wants. It’s also a good idea to “spread the wealth” among a few vendors so as not to be reliant on one.
You may also save costs in doing so and find more inventory choices to suit your specific customer needs.
If you are opening up a convenience store from scratch, you’ll have to identify wholesalers and SKUs you want to sell yourself.
Vendors will also conduct a credit check. If you have poor credit, you’ll find yourself in a not so great negotiating position. At any rate, most vendors will require you to pay upfront for your first order.
Financing a Convenience Store
As we mentioned before, it is likely you’ll need to put together a business plan with financial forecasts to obtain either startup financing and/or working capital financing. There are several common options for financing the startup and operating costs of a convenience store. The types and availability of financing for your convenience store will depend in part upon the specific loan request you make. Financing options have traditionally been fairly broad. There are various loan purposes to consider as a borrower depending on whether you are looking to purchase an existing convenience store business, obtain start-up financing for a new store, seek capital improvements, pursue construction, or request financing for machinery, equipment, and inventory. There are several loan types that have been used to finance convenience stores, which can be structured as fixed, variable, or fixed to floating.SBA loans
A good place to start looking for financing is by contacting your bank to see if they can arrange a Small Business Administration (SBA) loan.
The Small Business Administration's (SBA) 504 and 7(a) loan programs are both popular alternatives.
The SBA backs typically 75% of the full loan amount so that banks and lenders assume less balance sheet risk on the loan. Loan terms are structured based on the assets being financed.
Conventional loans
Conventional loans are typically made by traditional banks and some non-bank lenders. These loans are not guaranteed by any third party and the bank or lenders assume the full risk of the loan. Therefore, credit standards are usually higher for conventional loans. Pricing and terms can be more flexible for conventional loans as lenders can price lower for stronger loan requests.
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Asset-backed loans
Convenience stores often use asset-based lines of credit for a variety of business needs. Asset-based financing can be either a revolving or term loan that is secured by assets such as accounts receivable, real estate, equipment, or inventory.Seller Carry Financing
For buyers of an existing convenience store, it may be possible to negotiate financing with the seller. If you don’t have great credit and/or have some money to put down, this is a great option for opening your own convenience store.
With this kind of financing, instead of receiving the full purchase amount, the seller finances all or part of the purchase price.
You negotiate with the seller the interest rate and terms of the financing. One benefit of seller carry financing is that the seller will be supportive of the transition and should offer training to ensure that the buyer is successful in taking the business operations over.
Merchant Cash Advance
Merchant cash advance financing is based on credit card receivables where the merchant cash provider will advance funds based on historical performance or credit card sales. This financing works well for businesses like convenience stores where there is a large volume of credit card sales. Merchant cash is considered short-term financing and can be funded quickly.The Bottom Line
Starting a convenience store takes money, planning, time, and dedication. With careful planning and research, the right location, the right products on the shelves at the right price, and a lot of hard work, you can eventually earn a good living after opening your convenience store. So, which is it? Will you stick with your 9 to 5 - 5 days a week? Or go for the 7 to 11 - 7 days a week?
Are you looking for jobs that let you be your own boss? We cover 27 of the best self-employed jobs you can find.
We have you covered, from entry-level jobs to self-employment business opportunities that leverage years of school and professional experience. You won’t believe that number 12 went from being a surgeon’s assistant to making millions a year, but it’s true (listen to the interview to find out how)!
That’s the perk of asking “How can I work for myself?” These self-employment ideas will give you unlimited earning potential.
[su_note note_color="#dbeafc"]
Click on any section below to find the best self-employment job for you.
- What are the Best Self-Employed Jobs?
- Self-Employed Job Ideas in the Skilled Trades
- Self-Employed Business Ideas You Can Start with a High School Diploma
- Self-Employed Jobs from Home
- Ways to Work for Yourself: More Ideas for Self-Employment[/su_note]
Get ready to find your answer to the question “How to work for myself?”
DISCLAIMER
Throughout this article, we refer to several data sources. The way they interact can make the math look a little funny, so let us break it down a bit.
The Bureau of Labor Statistics is normally the best source for data on salaries, and we refer to those numbers in some of the sections below.
All revenue data was pulled from IBIS World. Typically, revenue will be three to five times payroll. In some scenarios, we use freelance data available from Upwork.com that shows the earnings of the best freelancers in each industry.
Self-employed people will normally make somewhere between freelancer wages and average annual revenue. The tech sector is a bit like the wild, wild West, and a freelance developer may have three or four full-time jobs.
What are the Best Self-Employed Jobs?
The answer to that question depends on your skills and interests. What most people are really asking, though, is “What are the highest-paying self-employed jobs?” With that in mind, here are some jobs where you can be your own boss that are consistently profitable business ideas.
Job #1. Digital Marketing
• Average Annual Revenue: $817K
• Average Profit Margins: 6.9%
• Startup Costs: $100-$10K
• Time To Revenue: 1-6 months
• Annual Market Growth Rate: 1.3%
• Best for: Marketing and advertising pros, entrepreneurs with social media and data analysis skills, content creators
Having an effective social media presence is essential for many businesses today, but not all entrepreneurs understand social media marketing. As a result, the digital marketing sector has grown by 28.2% per year on average over the past five years.
This wealth of opportunities is what puts digital marketing among the best-paying self-employed jobs for those who want to set their own hours. Digital marketing isn’t just social media marketing, either. Other digital marketing niches include SEO-focused web design, Google Ads expertise, or helping clients start successful blogs.
While having a bachelor’s degree can help build trust in your services, you don’t necessarily need one to become a digital marketer. A large personal social media presence, for instance, can demonstrate your skills as well as any credential.
Check out our interview with Eric, the owner of Single Grain. Who bought SMMA agency for just $2:
https://www.youtube.com/watch?v=fO1F21040pQ#2. Cleaning Business
• Average Annual Revenue: $74K+
• Average Profit Margins: 6.7%
• Startup Costs: $500-$30K
• Time To Revenue: 1-6 months
• Annual Market Growth Rate: 1.2%
• Best for: Self-motivated, independent, and detail-oriented entrepreneurs
If you have about $1,000 saved up to invest, look no further than a cleaning business. When it comes to success rate and ease of getting started with no experience, it blows most self-employment ideas out of the water.
The best part is that you can start with no employees but have the option to scale as soon as you have money coming in. Imagine getting rid of your day-to-day responsibilities and operating a business like the leader you are. This is not just another 9-to-5.
A former guest of ours, Chris Mondragon, did $18,220 in his second month of starting a cleaning business. He’s now well over $1.5M a year in revenue. If you’re curious how he did it, check this out.
Watch our interview with Chris below:
https://www.youtube.com/watch?v=YcYIYdqegGAJob #3. Financial Advisor
• Average Annual Revenue: $1.8M+
• Average Profit Margins: 36.1%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 8.2%
• Best for: Accountants, investors, and finance professionals, detail-oriented entrepreneurs with strong math, communication, and research skills
You can make good money as a financial advisor working for a firm or bank—the average salary for financial advisors in 2021 was around $94,000, and you can easily make a six-figure salary in this career path.
Becoming your own boss gives you complete control over your financial advising career, allowing you to make more money while setting your own hours. Financial advising is among the best self-employed jobs because there’s high demand for these services from people who are willing and able to pay for them. After all, the people who seek out financial advice are normally those who have savings that they want to invest.
The main role of a financial advisor is to help clients grow their wealth and meet their financial goals. Retirement planning is one of the most in-demand niches in this sector. Captrust Financial Advisors in New York saw more than 30% growth year-over-year in new retirement planning clients in 2021, and while this is just one example, it’s indicative of a trend.
This is one self-employed job where a bachelor’s degree is a hard-and-fast requirement. You will also need to obtain several licenses to legally operate your own business as a financial advisor. Certifications like CPA or CFP are optional but can help you build trust with prospective clients and grow your business faster.
Job #4. Software Developer
• Average Annual Revenue: $400K-$1M+
• Average Profit Margins: 14.5%
• Startup Costs: $100-$50K, depending on size and scope
• Time To Revenue: 3 months to 2 years
• Annual Market Growth Rate: 3.1%
• Best for: Coders and developers adept in programming languages, independent and self-motivated entrepreneurs with strong communication and project management skills
The average salary of a software developer was over $120,000 in 2021, and with demand for these services continuing to rise, there are ample job opportunities for developers seeking traditional employment. That said, you can achieve both financial freedom and the freedom to set your own schedule by pursuing self-employment.
Some developers work with clients as independent contractors or on a freelance basis. Often, they’re brought on by businesses to help them develop and maintain software systems in their organizations, or to create new apps and software for use by their customers.
You can also truly be your own boss as a developer by designing your own programs and selling them straight to users. Going this route opens up more potential for passive income, too.
The career path to become a developer usually starts with getting a bachelor’s degree. There are also boot camps and professional certifications that can grow and verify your proficiency in programming languages and coding best practices.
Workello started as an agency to connect business leaders with freelance writing talent, but they truly unlocked their potential when they pivoted to become an SaaS company. Find out how they built their software business in this podcast episode:
#5. Vending Machine Business
• Average Annual Revenue: $182K+
• Average Profit Margins: 4.3%
• Startup Cost: $2K-$10K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 0.5%
• Best for: Those who like to tinker with machines and understand mechanics and those who enjoy driving
TIME is our single biggest enemy as entrepreneurs. Most self-employment ideas require a time commitment most of us don’t have...but vending is a different breed. It’s one of those rare self-employment ideas that’s perfect to start on the side.
If done right, once you place your vending machines, you’ll only need a couple of hours a week to maintain them. In fact, as we speak, one of our friends, Adam Hill, is operating his six-figure vending machine business working just two days a week.
He’s done so well for himself that we bugged him until he agreed to create a FREE masterclass for our UpFlip readers. It reveals exactly how he did it.
Watch our interview with Adam below:
https://www.youtube.com/watch?v=-s_Y-O1noswJob #6. Makeup Artist
• Average Annual Revenue: $47K+
• Average Profit Margins: 7.1%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 0.9%
• Best for: Creative and artistic entrepreneurs knowledgeable about fashion, style, and trends, people who are detail-oriented with strong communication and collaboration skills
Are you the person your friends turn to when they need makeup for a big event or help with their Halloween costumes? Then you may want to consider working for yourself as a freelance makeup artist.
The average salary for makeup artists is $66,000 per year, though this varies widely. Those just starting out may earn as little as $30,000 per year, while experienced MUAs can earn $120,000 or more.
You don’t need a bachelor’s degree to hold a self-employed job as a makeup artist. Depending on the type of makeup you do, though, you may need a cosmetology or esthetician license, or to be a Certified Makeup Artist, in order to start your own business (learn about the state-by-state requirements here).
Job #7. Business Consultant
• Average Annual Revenue: $364K
• Average Profit Margins: 6.4%
• Startup Costs: $1K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 2.2%
• Best for: Executives and business leaders, entrepreneurs with management or business expertise, people with strong analytic, problem-solving, and communication skills
Business Insider lists business consultant as the fourth highest-paying side hustle in 2022. With the potential to earn up to $98 per hour, it’s among the top high-paying self-employed jobs.
A consultant’s role is to help people who own their own businesses run them better. To do this, you need a firm understanding of effective business management. Most people who thrive as consultants pivot into freelance jobs after gaining experience in the corporate world or as successful business owners.
This experience is more important than your education, and if you have business expertise, you don’t need a bachelor’s degree (or even a high school diploma) to succeed as a self-employed individual in consulting.
Self-Employed Job Ideas in the Skilled Trades
Job #8. Painter
• Average Annual Revenue: $76K+
• Average Profit Margins: 7.2%
• Startup Costs: $1K-$100K
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: -2%
• Best for: Home improvement pros, construction workers and contractors, people who enjoy physical work and have a sharp eye for detail
The hassle and mess of painting a home leads many homeowners, property managers, and business owners to hire someone to do it for them. A self-employed individual in this field can earn as much as $50 per hour for exterior home painting, significantly more than the average salary of painters employed by other companies.
Starting a house painting business is an excellent self-employment idea for those seeking a scalable niche. Joshua Douglas started his company, A Painter’s Touch, with $6,000, and has since grown to five crews bringing in upward of $25,000 a month.
His goal when starting the business was to achieve better balance between his work and personal life, but he ended up making more money than he had in his previous job, too. Hear his story in this podcast interview:
Job #9. Handyman
• Average Annual Revenue: $204K+
• Average Profit Margins: 5.4%
• Startup Costs: $500-$5K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 0.7%
• Best for: People with construction and home repair experience, mechanically minded and detail-oriented entrepreneurs with strong customer service skills who like working with their hands
If you’re a whiz at troubleshooting and fixing problems around the house, working as a handyman could be the best self-employed job for you. Handyman services are in high demand, and you can charge as much as $100 per hour for performing basic home maintenance tasks like cleaning gutters, mounting TVs, or repairing cabinetry and drywall.
One advantage of self-employment as a handyman is that there’s a very low barrier to entry. You don’t need any special licenses or permits, or even a high-school diploma, to start booking jobs. The startup costs are minimal, too, especially if you already own basic repair tools.
Caleb Ingraham worked as a contractor before becoming a self-employed handyman. Five years in, he averages $25,000 a month in revenue and is booked up six weeks out. See how he built his business in this interview:
[su_youtube url="https://www.youtube.com/watch?v=leUta_q_MPQ"]Job #10. Electrician
• Average Annual Revenue: $1M+
• Average Profit Margins: 6.2%
• Startup Costs: $1K-$100K
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 0.9%
• Best for: Certified contractors and electricians, people with high dexterity who enjoy working with their hands, strong problem solvers with excellent customer service skills
According to the Bureau of Labor Statistics, the average salary for an electrician is just over $60,000 per year and the industry is expected to grow at a rate of around 7% per year through 2031. That means wages and demand for employees are expected to grow faster than revenue.
Like other jobs in the skilled trades, the consistent demand for electricians is what makes it one of the best self-employed jobs. You’ll have a lot of options to find work, whether you work with customers directly or as an independent contractor for other construction firms.
You don’t need a bachelor’s degree to work as an electrician, but you will need to get licensed to demonstrate you can perform electrical work safely. The specific requirements vary state by state but normally require 4,000-8,000 hours of experience as well as passing an exam.
Once you have these skills, the sky’s the limit when it comes to earnings. Joe Walsman looked for self-employment options after the 2008 recession and decided to start his own business, Jefferson Electric. Today, it makes $500,000 a month in revenue on average. Hear how he built his business in this podcast interview:
Job #11. Construction
• Average Annual Revenue: $696K+
• Average Profit Margins: 3.4%
• Startup Costs: $1K-$100K
• Time To Revenue: 1-6 months
• Annual Market Growth Rate: -1.3%
• Best for: Contractors, builders, and makers, people with strong math skills who like physical work
If you excel at bringing designs to life and love building things by hand, construction could be the best self-employed job to go to work for yourself. While surging interest rates have put a damper on new construction, the long-term forecast calls for growth, with a CAGR of 5.2% through 2027.
This is another industry with a low barrier to entry. You don’t even need a high school diploma to do construction work, though contractors do need to be licensed by their state.
That doesn’t mean you need tons of experience to get started, though. Avanni Petras started his own business in construction at just 19 and in his first year made more than $125,000 in revenue. See how he built his business from scratch here:
[su_youtube url="https://www.youtube.com/watch?v=_PpDwut_2Lw"]Self-Employed Business Ideas You Can Start with a High School Diploma
Job #12. Delivery Driver
• Average Annual Revenue: $131K
• Average Profit Margins: 3.6%
• Startup Costs: $100-$9.5K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 6.7%
• Best for: Skilled drivers and navigators, organized and reliable entrepreneurs who are strong communicators
The rise in on-demand delivery is one trend from the pandemic that seems likely to continue long-term. Food delivery alone has more than tripled its market value since 2017, and that’s just one of the work-for-yourself jobs available in this sector.
The easiest way to become a self-employed food delivery driver is to sign up through a service like DoorDash or Uber Eats. You can do the same with a grocery delivery service like Instacart. These services allow drivers to set their own hours, so you don’t need to build a company from scratch to balance your self-employed job with your personal life.
You can also start your own business in the delivery sector. Doing so will require more time and money invested up front but can bring you much higher revenue down the line than delivering groceries or food through an existing app. If you’re considering this option, check out this interview with the founder of Trellus Same-Day Local Delivery to hear how they got started:
Job #13. Lawn Care and Landscaping
• Average Annual Revenue: $272K+
• Average Profit Margins: 8.7%
• Startup Costs: $2K-$10K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 8.1%
• Best for: People who love green spaces and working outside, gardeners and plant experts, detail-oriented entrepreneurs who excel at customer service
Landscaping and lawn care services are great business ideas for lovers of the outdoors. The number of landscaping businesses in the United States has increased by an average of 3.2% per year over the last five years, and demand for them is continuing to grow right along with it.
Some self-employed landscapers have bachelor’s degrees in landscape architecture or a similar area of study, but that’s certainly not a requirement to get started. You also don’t need a ton of money or specialized equipment, giving lawn care an overall low barrier to entry.
Not only is landscaping among the best self-employed jobs, but it can also easily be scaled into a very profitable business. Mike Andes grew Augusta Lawn Care to more than $1 million in revenue by age 24, then scaled it even further by turning it into a franchise. You can hear how he got started in this YouTube interview:
[su_youtube url="https://www.youtube.com/watch?v=RLeOYgF54tE"]Job #14. Nanny or Childcare Services
• Average Annual Revenue: $143K+
• Average Profit Margins: 0.9%
• Startup Costs: $0-$1K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 51.7%
• Best for: Teachers, tutors, babysitters, parents, caregivers, compassionate and patient entrepreneurs with strong organization and multitasking skills
Childcare services are in high demand, especially in rural areas, where nearly 60% of families don’t have access to the childcare they need. Parents in urban areas need reliable childcare, too, and thanks to this rising demand, the overall childcare market is projected to grow at a CAGR of 12.8% through 2027.
This opens up a lot of self-employment opportunities for entrepreneurs who have experience teaching, watching, or caring for kids. It’s also driving up the average salary for childcare professionals across the country. The average hourly rate for a nanny was $17-$18 in 2023, but that can go much higher depending on where you live and if you bring other skills like tutoring or medical knowledge to the table.
This is another self-employed job that has lots of growth potential. While you can certainly make a good living as a one-person operation, you can also build on those skills to start a small business like a daycare or nanny agency.
Twinkle Toes Nanny Agency has grown to more than 20 locations with a cumulative annual revenue of $11.2 million since it was started in 2011. Find out how its founder went from being a surgeon’s assistant to making millions per year:
Job #15. Event Planner
• Average Annual Revenue: $94K+ as wedding planner
• Average Profit Margins: 12.2%
• Startup Costs: $500-$5K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 1%
• Best for: Organized and social entrepreneurs who are strong networkers and planners, creative problem-solvers
Like other sectors that rely on large gatherings of people, the pandemic put a damper on the event-planning industry. The good news is, it bounced back in a big way in 2023. The event-planning market is expected to surpass $1.5 trillion in value by 2028, which represents a growth rate of 11.2%.
There are many niches you can go into as an event planner. Wedding planning and corporate events are among the most consistently profitable, but the truth is you can earn a sizable revenue by planning any kind of event, from social gatherings like parties and reunions to business events like product launches and conferences.
Having connections to other local businesses like event venues, caterers, and entertainment is key to success when you’re working for yourself as an event planner. This makes it one of the best self-employed jobs for people with experience in hospitality, food service, and similar industries as they can draw on that knowledge to grow their new business quickly.
Job #16. Virtual Assistant
• Average Annual Revenue: $35K-$50K
• Average Profit Margins: 10.5%
• Startup Costs: $100-$200
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.9%
• Best for: People with strong organization and communication skills, those who want to work from home and set their own hours
Virtual assistants work with busy professionals on a freelance or contract basis, handling administrative tasks so they can focus on their other responsibilities. The things you’ll do as a virtual assistant can include replying to emails, scheduling meetings and travel, managing and posting to social media accounts, and similar types of tasks.
You can start a virtual assistant business online by creating an account on a freelance platform like Upwork or 24/7 Virtual Assistant. While you’ll need basic computer skills and a reliable internet connection, the most important traits for virtual assistants are soft skills like reliability, communication, and multitasking, and you certainly don’t need a bachelor’s degree or other formal education.
Job #17. eCommerce Reseller Business
• Average Annual Revenue: $60K-$120K
• Average Profit Margins: 5-15%
• Startup Costs: $100-$1K
• Time To Revenue: 30-90 days
• Annual Market Growth Rate: -9.3% (Based on eBay annual reports)
• Best for: People with sales and marketing skills, collectors who can spot valuable items, those seeking flexibility and the potential for passive income
Opening an online store costs less than starting a brick-and-mortar retail store. It also gives you more schedule flexibility than many working-for-yourself jobs since it doesn’t involve working with clients.
The inventory you sell will be the main cost of starting an e-commerce business as a reseller. If you have an eye for spotting hidden gems at flea markets, thrift stores, and garage sales, you can make a consistently high profit with this kind of business.
Mike Wilson started Golden State Picker with $1,000 worth of inventory and has grown that into a $30,000-a-month business. Hear how he started in this podcast interview:
Self-Employed Jobs from Home
Job #18. Graphic Designer
• Average Annual Revenue: $123K+
• Average Profit Margins: 13.5%
• Startup Costs: $500-$5K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 2%
• Best for: Visual artists, designers, creative and artistic entrepreneurs
In a recent report from Upwork, graphic design topped the list of most in-demand creative skills. Graphic designers help businesses create their brands, a crucial ingredient in attracting customers and growing sales, so it’s no surprise this service is so needed in today’s market.
The average salary for a graphic designer is $24 an hour, but an experienced freelance graphic designer can charge $100 or more an hour for their services. You’ll be able to charge more from the start if you have a bachelor’s degree in graphic design or a similar area of study. You can also learn the skills you need from online courses and how-to videos, though, so a degree isn’t a requirement to get started.
Job #19. Web Designer
• Average Annual Revenue: $239K+
• Average Profit Margins: 5.3%
• Startup Costs: $100-$1K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.4%
• Best for: Programmers with knowledge of HTML, CSS, and JavaScript, visual artists and designers, detail-oriented entrepreneurs with strong time and project management skills
Similar to graphic design, web design is an in-demand skill, and self-employment is common in this industry. Many businesses hire freelance web designers to build and maintain their websites, and there’s a particularly high demand for designers with e-commerce or SEO expertise.
The average salary for a freelance web designer was $65,000 a year in 2023, which equates to roughly $31 an hour. You can charge more if you have those niche skills mentioned above.
Having a portfolio of past work to show potential clients is the best way to grow a web design business. If you’re just starting out, building your own website or doing some free work for friends and family can help you create this portfolio.
Job #20. Translator
• Average Annual Revenue: $75K-$200K
• Average Profit Margins: 12.4%
• Startup Costs: $100-$200
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.2%
• Best for: Bilingual or multilingual entrepreneurs, excellent communicators
Translation is among the best self-employed jobs for people who speak multiple languages fluently. There’s a wide variety of work available in this niche, too, from translating books to writing multilingual captions for videos or doing live translation at events and functions.
The pay for translators varies widely, with an average salary of $61,000 per year. You can make more money if you can translate between English and in-demand languages like German, Mandarin, and Arabic.
Job #21. Freelance Writer
• Average Annual Revenue: $46K
• Average Profit Margins: 14.6%
• Startup Costs: $100-$200
• Time To Revenue: 1 month to 3 Years
• Annual Market Growth Rate: -1.5%
• Best for: Writers, editors, and language experts, people with SEO, marketing, and advertising knowledge, creative entrepreneurs
Despite the recent emergence of AI content generators, freelance writing remains among the best self-employed jobs you can start from home with almost no upfront investment.
Freelance writers can take on a wide range of work. Some focus on fiction and other creative writing, either under their own names or as ghostwriters. Technical writing is one particularly high-paying freelance writing niche, with an average salary of $75,700 in 2023. There is also high demand for online content like blog posts and advertising copy.
The bottom line is, if you are a strong writer and wondering how to work for yourself, you can create your own job writing about the things that interest you.
Job #22. Proofreader Business
• Average Annual Revenue: $25K+
• Average Profit Margins: 9%
• Startup Costs: $100-$1K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.9%
• Best for: Grammar and writing experts, people with a sharp eye for detail
Another great self-employed job in the content creation sector is proofreading. Proofreaders give written texts professional polish, catching and correcting errors in books, blog posts, marketing brochures, and other types of copy.
While proofreading pays less on average than writing, an experienced proofreader can make up to $25 an hour. You can make extra money by adding services like fact-checking or content editing to your business, too.
Job #23. Photographer Business
• Average Annual Revenue: $50K
• Average Profit Margins: 7.3%
• Startup Costs: $1K-$10K
• Time To Revenue: 1-6 months
• Annual Market Growth Rate: 0.3%
• Best for: Visual artists, photographers and videographers, creative entrepreneurs with strong customer service skills
There are lots of ways to make money from photography. You can photograph events, take family or school portraits, or work with businesses to take pictures of their products for store listings or advertisements.
Mile High Productions offers drone photography and videography services for clients ranging from real estate agents to TV productions. They’ve grown to $35,000 a month in revenue thanks to their high-profile clients. You can see how they started here:
[su_youtube url="https://www.youtube.com/watch?v=EUcv1HAAbns"]Photography equipment is the most significant startup expense for a self-employed photographer. If you already have a professional camera, the main cost to start will be marketing to attract your first clients.
Job #24. Tutor
• Average Annual Revenue: $389.5K+ (normally has multiple employees)
• Average Profit Margins: 13.10%
• Startup Costs: $100-$1K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 8.5%
• Best for: Educators, people who are compassionate, empathetic, and can explain complex concepts in simple terms
If you’re knowledgeable about school subjects like math, English, and history, tutoring should be on your list of best self-employed jobs. The rise of online tutoring platforms like Skooli and TutorMe makes it easier than ever before to find students and teach them right from your home. Other than knowledge, all you need to get started is a reliable internet connection.
How much you can make as a tutor depends on your experience and areas of expertise. The average rate is around $24 per hour, and you can charge more if you can offer college-level tutoring or services like standardized test prep.
Ways to Work for Yourself: More Ideas for Self-Employment
Job #25. Real Estate Agent
• Average Annual Revenue: $298K+
• Average Profit Margins: 44.6%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: -0.3%
• Best for: Skilled negotiators, friendly people with strong sales and communication skills
Most real estate agents are self-employed, even if they work under the supervision of a broker. Typically, this means they get to set their own schedules and choose the clients they work with, putting real estate agent among the best jobs for people who want full control over their workdays.
Real estate agents can represent either the buyer or the seller in property transactions. Some agents switch between these roles, while others have a specialty. Whatever your focus, you will need to be licensed to become a real estate agent. Licensing requirements vary state by state, but the licensing process is typically fairly quick and easy, and you only need a high school diploma or GED to qualify.
Job #26. Property Manager
• Average Annual Revenue: $372K+
• Average Profit Margins: 10.1%
• Startup Costs: $100K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 1.3%
• Best for: Home maintenance and repair experts, organized and system-focused entrepreneurs who are great communicators
Another self-employment option in the real estate sector is to become an independent property manager. Property managers are often hired as independent contractors by people who own rental properties or commercial real estate. They take care of day-to-day tasks for a property, like collecting rent, arranging or making repairs, and fielding tenant concerns and issues.
Property managers made an average salary of $53,600 in 2023, but there’s the potential to earn six figures or more. Generally speaking, the larger the property, the higher the pay. One highly profitable niche is managing Airbnb properties for their owners. Airbnb business Nicasa manages others’ properties in addition to its own real estate investments and earns $3 million a year in revenue. Learn more about its winning strategies in this video:
[su_youtube url="https://www.youtube.com/watch?v=6m-MosXlpOE"]Job #27. Life Coach
• Average Annual Revenue: $63K+
• Average Profit Margins: 10.5%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.5%
• Best for: Excellent motivators, empathetic active listeners, people with strong time management, organization, and problem-solving skills
As a life coach, your job is to encourage clients to become the best versions of themselves. This can mean helping them solve problems in various areas of their lives, from their personal relationships to their physical and mental health or broader life goals.
There are no licensing or formal education requirements to become a life coach. As with other self-employment jobs, though, having some training can help you build client trust when you’re first starting.
This Forbes review of the best life coaching programs is a great place to learn about the top life coaching certifications. A bachelor’s degree in psychology, social work, or another social science can also help you gain the skills you need to improve clients’ lives.
Job #28. Career Coach
• Average Annual Revenue: $64K+
• Average Profit Margins: 2.8%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 0.8%
• Best for: Recruiting and human resources professionals, strong networkers with industry and job market expertise, effective writers, communicators, and motivators
Career coaches help other people land the jobs of their dreams. This can include tasks like helping write or improve resumes and cover letters, interview preparation and practice, and helping people develop the skills they need to advance their careers.
A career coach usually charges around $100-$150 per session. With a full client load, that adds up to an average salary of $63,300 per year in 2023. You can earn more if you offer specialized services, like executive coaching or helping people navigate career changes.
Job #29. Hair Stylist
• Average Annual Revenue: $51K+
• Average Profit Margins: 5%
• Startup Costs: $1K-$100K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 0.9%
• Best for: Beauticians and barbers, people with knowledge of fashion and style trends, creative people who are great active listeners and problem solvers
In many salons, the hairdressers aren’t employees. Instead, they’re self-employed stylists who rent a chair or work on commission. For many, this arrangement is the best of both worlds. The salon owner pays for the equipment and does their own marketing, and the stylist gets scheduling freedom and control over their own client list.
You don’t necessarily need to go to beauty school to become a hair stylist, but you will need a cosmetology license (see the requirements for each state here). Apprenticing with an established hair stylist is a great way to build your client list while gaining the skills and experience you need to become a self-employed stylist.
Did You Find The Self-Emploment Job For You?
The best self-employed jobs come in all fields. If you want even more inspiration, check out our blog of 561 self-employment ideas.
Which of the ideas did you like best?
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