Ways to increase revenue for your small business in United Kingdom

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have you thought about starting a business or even if you're in business you'll know it's really tough most businesses fail and they're just about getting by there are a few percent that have been around for more than 10 years and are actually very profitable and I think they're profitable because they've got the right model the model sets you up for Success well in this video I'm going to go through six profitable businesses that have got great models that are going to set you up for the long term so you can be in business for a long time and actually make some profit let's break down those six profitable models now on the flip chart here I've got six different profitable business models that I'm going to break down for you and here's the thing I actually trade in some of these businesses so they come in from a place of experience if you're new to my channel I employ over a thousand people I trade lots of different businesses and I've been doing it for like 20 years now and I've been in some businesses that are just tough it's like pushing water up a hill and I just don't want that for you so I want you to think about this model mindset for success in entrepreneurship let's have a look at the first one that I've discovered now this is okay I've got 10 day nurseries and a few more in the pipeline I started this business nearly 20 years ago now what do I like about this business well you get a customer and they stay with you four to five years so you've got good average lifetime value now that's one of the most important things when you're looking for businesses to start or even if you're in business should you be growing the one you're in to the next level or should you invest in another type of business lifetime value average lifetime value is absolutely crucial what I also love about this business is people are paying you up front for the service so you haven't got to worry about cash flowing lending money to customers there's another great thing about this I love this business because it's regulated as well the government sets out a set of parameters that you've got to follow so all the competition are working to the same set of parameters and it's also really good because of OPM other people's money want to invest into that sector and that's one of the little cheats of seeing if a business model is good if Pension funds private Equity venture capital or even Bank want to invest or lend money into a sector you know that you're on to a winner winner chicken dinner because if you build a profitable day Nursery say it generates a million pounds worth of sales it makes two hundred thousand pounds worth of profit there's going to be a venture capital it's a private Equity person chomping at the bit to buy it from you or other business owners entrepreneurs that are in a roll-up phase of putting other nurseries together I've bought day nurseries from other people and rolled into our business that roll up thing is a real good sort of clue as whether it's a good business or not Banks love lending to profitable day nurseries but they don't for example like lending to profitable restaurants I mean yes a profitable restaurant will be able to get a loan but it's much much easier to get money from profitable child care because of average lifetime value you haven't got to worry about a Fickle Marketplace like the restaurant example you know a new restaurant opens in the town everyone's going to go and try that you've got someone in your day Nursery a new one opens in the town well they're used to your staff because they love you they want you they need you and that is is why this is a great business model as long as it's big enough and it's not too small you want to make sure that you've got enough children you've got enough scale in there if it's too small and it looks like a profitable job you won't get other people's money wanting to invest in you like a B and B you know a six bedroom Bed and Breakfast Hotel Adventure capitalist doesn't want to buy into that and roll that up but you own a 70-bedroom hotel yes they're very interested very similar for child care you don't want to be too small you want to be of a nice size to get some scalability into it so I suppose scalability is another clue to what makes a profitable business model let's look at the second one a second great model that I love is Food Services business now imagine if you've got a big office block full of workers or a big Factory or even a big Secondary School the person that's got to feed or responsible for feeding all those people would need to engage a Food Services business now there's a massive massive businesses out there like Cisco their own breaks in the UK and they're a massive firm in the US as well and they're buying up and rolling up all these businesses all the time there's other people's money private Equity pens funds all going into this sector because of a number of reasons well you've got lots of repeat and regular customers you signed a secondary school up you know what they're going to be ordering you'd sign a factory up or a big office block you know what they're going to be ordering so it's quite good because a predictable cash flow do you sign a customer up and they continually regularly order from you you know if we go back to our restaurant sort of scenario that we spoke about earlier you know a restaurant might only have the customer go there once or twice a year you sign a Food Services business up that supplies the restaurant the restaurant I've got to find these new customers all the time but you don't need to find one restaurant a hundred restaurants to keep on buying from you to build a great business That's What I Love About Food Services business it's that predictable cash flow you can build it up and someone wants to buy if you build it to a scale when you exit it's just a great business so I do like Food Services business so much so that I started one myself and a little story about this I bought an ice cream company that was supplying restaurants and theme parks and also my attractions and then I bolted on Food Services business supplying all of my venues and that's turned into a really profitable business and very predictable let's look at number three this one is contract catering not to be confused with Food Services it's very different so if you've got a restaurant another restaurant analogy here you've got to wait for all these new customers to come to you well we contract catering you are the school you are the office block you are the factory that's buying all the food in from the Food Services business then feeding all the people now why is this better than a restaurant because if you know how many people come to the school and they come every day if you know how many workers come to the factory and you're providing the canteen services at the factory you've got very predictable Revenue this is one of the big things that we like about profitable business models it is predictable cash flow and that's what makes them very valuable models if we can know what's going to happen we can predict stuff which is just unusual in lots and lots of businesses most businesses start from zero each month they've got to find new customers all the time whereas contract catering you've actually the clue is here contract you've got a contract to provide the same service day in day out all the time so I do like contract catering I've bid for lots of contracts to take on contract catering in factories and in office blocks because I realize I've got a Food Services business so if I can have end-to-end supply chain or things could get really attractive and contract catering you build a big contract catering business someone's gonna want to buy it when you exit it because it's just so predictable it's not key person driven which is another clue about great business models if you can find a business where the owner the entrepreneur the founder Isn't So key to making it all happen and we can rely on beautiful contracts you're going to build something that's way more profitable and this again is predictable I just love it so contract caterings number three number four is commercial property rentals now when I started out in my entrepreneurial career I had a trading business I would funnel some of the cash out and put it into slow pounds which for me was buy to let property investment I would buy houses and flats and rent them out and enjoy some nice cash flow now if you're here in the UK watching this video you know the government have changed the rules on this and the tax efficiencies aren't there higher stamp Duty can't claim all the interest back yada yada yada so I pivoted into something that's so much better you need a bit more cash you need a bit more experience but that's because it's so much more profitable it's higher barrier to entry which is another clue in building profitable business models the higher barrier to enter you go the better the business is because you've got a moat around your business that protects you against competition and headwinds and that for me is commercial property rentals own industrial estate and lots of commercial properties on Fri leases this is fully repairing and insuring leases which means the tenant has to look after the building you can sign people up to 10 15 year leases you put in loads of capital allowances which is a good tax write-off against any improvements you make to the property you get lower stamp Duty you can put it into a pension and a self-invested pension fund there's loads of great things that you can do with commercial property rentals and you get really good yields you can put a million pounds out whether it's your money the bank's money or a mixture of both whoever's deploying the capital you can get at least a 10 return if you know what you're doing so you put a million pound out you can get 100 000 pounds worth of rent back there's all the tax efficiency which you just don't get with residential property and so you can build a really nice business out of commercial property rentals and I've always advised entrepreneurs and business owners look try and buy the property that your business operates out of first and then put some of your cash into this this slow pound building assets eventually this will turn into a lovely business on the side of your existing business so commercial property rentals buying a property renting it out to other people especially if it's um in small warehouses and storage units I just love that sort of business especially storage I mean storage oh my God what a great model that is as well so commercial property rentals not to be confused with residential property rentals which you think you're a much harder game right now let's look at the next one number five is Niche wholesale what do I mean by Niche wholesale there's a phrase that I use on my podcast and indeed here on the YouTube channel and that is Rich's niches if you can build a niche business you'll find that those particular businesses are protected against margin erosion what that means is big businesses are competing with you so you're driving down your margin to compete with them you end up competing on price what we want to do is not do that because we want to keep as much gross profit and margin in the business as much as possible and it's all about fishing you know it's a big enough industry that you could bring in some products that you import from around the world you can white label them or even manufacture them yourself it's a big enough industry that you could build eventually a 10 20 30 40 50 million pound business but it's probably not big enough for Amazon or Asda or supermarkets like Walmart to get in on the fishing game they might do some of the big most popular lines but you can do all the lines and compete and create your own brand in a niche and then wholesale it to other shops Etc now I do this in my business I created a niche toy business we do a make a bear business where we make teddy bears it's big but it's not Amazon big it's not Supermarket but I also make Children's Arts and Crafts again it's big but you know the biggest player in the world might be a 200 million pound business but Mattel one Hasbro the big toy companies don't want to get involved in it because it's not big enough for them so you want to find these niches that are big enough like a Goldilocks investor not too big not too cold not too hot but just about right so I like Niche wholesale businesses if you look at the ones that I've got my wholesale ice cream business you know it's niche it's not every type of food but nice good quality ice cream products if you look at my arts and crafts business and my teddy bear business their Niche they're big enough but they're not too big the Goldilocks Niche wholesale businesses find them and you're on to a winner number six is commercial hygiene and Waste Services now the clue is this magic word commercial here we're not talking about direct to Consumer what is this type of business well you need skips or you need waste taken away those commercial businesses if you build them up to a size you'll see Roll-Ups happening that's other waste companies buying them or other people's money I.E investors private equity and Pension funds buying them all up and creating bigger companies especially in the hygiene world so this would be all the nappy bins and sanitary bins that are in office blocks Schools public toilets etc etc there's usually lots and lots of little independent companies that start up through that and then they'll buy up each other and build much bigger businesses now I like these businesses for a number of reasons predictable Revenue other people's money want to buy it should you be profitable wish you went to exit very recession-proof people still need this stuff disposed of even in an economic downturn and because it's commercial businesses you're dealing with much bigger companies and it's very easy to value a business like this should you want to exit so I like hygiene and Waste Services now I've got a little bonus one but I also identified so this would be number seven but it's really another formula to think about and this is Prof National Services you know if you're an accountant you're a dentist you're a solicitor those types or Finance anything that's professional and regulated always has a value to it it's always easy to predict what its value is going to be should you wish to exit other people's money want to buy into it and invest in it and grow in it and it's actually trying to make your business look like it's professionally regulated business they are usually the ones that are more profitable higher barrier to entry predictable Revenue easy to Value other people's money want to get involved in it so there we go okay there's seven great ideas for profitable business models and if you're new to my channel don't forget come and check out one of my seminars running a big one in London called business master class this is a two-day event where I literally show business owners how they can sort success tickets are only a few hundred quid and you can buy them online website James sinclair.net there's also a link in the video description can't wait to see one of our seminars see you real soon bye