Best Businesses To Start with Facebook Ads

0:00Today, I'm going to rank the best business opportunities that you can use Facebook ads and Instagram ads to promote, starting with drop shipping. Oh boy, where do I start with drop shipping? Now, drop shipping is incredibly attractive to new entrepreneurs, and the reasons are pretty obvious. You can just sell products. You don't have to worry about product design or development or fulfillment or shipping or any of those things that can make business a lot more difficult. But, that plus side, the benefits associated with drop shipping and the how easy it is, is actually one of my biggest problems with drop shipping. And that's because if it's

0:32really easy for you to start a drop shipping business, it's also really easy for millions of other people to also start drop shipping businesses, and millions of people have started. Most of them don't succeed and don't carry on, but they have started drop shipping businesses. And no matter what any expert tells you, you are not going to find a unique product to sell, which means you'll end up selling something that hundreds, thousands, maybe even tens of thousands of other drop shippers are trying to sell, and you'll probably end up trying to sell them to the same

1:00people as those other drop shippers. I've seen this on my Facebook feed, Instagram feed, where you see ads for the exact same product from different businesses one after the other. They're obviously drop ship businesses. And to make matters worse, drop ship products often take weeks to arrive, which in an era of next day or same day Amazon deliveries is just is just not a good customer experience. That leads to a lot of refunds, which leads to issues later down the line. Now, whenever you hear of drop shipper success stories, you'll often hear someone say things like I

1:28made $400,000 with this [music] product. But then when you actually dig into it, they're talking about revenue, not profit. So, it might look something like this. $400,000 is sales, $150,000 [music] is the cost of goods, what you're paying the manufacturer. $300,000 are the ads required to generate those sales, which means you actually made a $50,000 loss, and that's before those refunds start coming in and affecting your margin. With drop shipping, you cannot differentiate yourself from your competition. Because of that, I think it's a terrible business opportunity and I'm going to rank it as a D. And now, there are exceptions, of course, and some drop shippers do behave ethically,

2:03but I could not think of a group of people that have done more to harm the reputation of Facebook ads and Instagram ads than drop shippers. Drop shipping is actually the least favorite business opportunity of mine that I'm going to be covering in this list. Good to get it out of the way early. I'll be talking about my favorite business opportunity at the end of the video, so make sure you stick around for that. Before we get there, we've got a whole bunch of interesting other options to go through. Business opportunity number two is a digital marketing agency. Now, depending [music] on who you listen to, a digital marketing

2:32agency is either the best business opportunity that's ever existed and everyone should be doing it, or it's the absolute [music] worst. Now, of course, the truth is very much in between the two in the middle. And I actually think that a digital marketing agency is [music] a good business opportunity. Yes, there is a lot of competition and the barrier to entry is small, so thousands of people start digital marketing agencies every month, but the addressable market is absolutely

2:55enormous and it's very, very valuable. People are willing to pay high prices for high-quality digital marketing services and the demand for that is only going to grow over time. If you look at my digital advertising agency, for example, our average customer value is £15,000. Now, you don't need many clients at that level to generate a million dollars [music] a year. And any market where there is large potential upside, there's going to be a lot of

3:18competition. That's just inevitable. Plus, digital marketing agency is the opportunity that I chose when I started 7 years ago. It's made me a multi-millionaire, so I have very concrete evidence that it works. I'm going to give digital marketing agency an A, and if you don't have much startup money, I think this is a great option. New entrepreneurs can make $500,000 a year, a million dollars a year with this opportunity. The only reason why I'm not giving digital marketing agency as a business opportunity an A plus is because it's difficult to take, say, a million-dollar a year digital marketing agency and turn it into a $100 million

3:51dollar digital marketing agency. There are better business opportunities for that goal, but it really depends what you're looking to achieve. For most people, million dollars a year is plenty. Business opportunity number three is a brick-and-mortar business. Now, these are sorts of businesses that we see and interact with all the time, like restaurants and gyms and dry cleaners and hair salons. These businesses are actually quite easy to advertise on Facebook and Instagram, and acquiring customers is not that difficult to do. You're only ever competing against the businesses that are advertising the same thing in that specific local area. So, the competition is always quite small, but they are very

4:23difficult operationally. They require startup money, often quite a bit of it, and you often need to hire quite a lot of staff, usually in relatively unskilled, low-paid positions, and those churn quite a lot. You're going to see a lot of staff churn. I'm here to tell you that I'm quitting. [music] Which makes managing all that quite difficult. Brick-and-mortar businesses nearly always find a way to generate revenue, but most generate really small profits and very, very few generate any substantial profit. Then you also need to factor in how hard it is to scale. If every time you want to grow your business, you need to open a whole new

4:58location and hire lots of staff, and that's a slow and difficult process. So, factoring all that in, I'm going to give brick-and-mortar business a C. A lot of new entrepreneurs, they start with brick-and-mortar businesses because it's a sort of business that they see and interact with all the time, and I think that's a mistake. The next business opportunity that I want to talk about is an online coach/consultant. Now, there are tons of things that you could be an online coach or an online consultant for. You could do personal training and nutrition coaching. You could be a strategic business coach. You could

5:27teach people how to play the guitar. Whatever it is that you have expertise in and that you can teach other people how to do, you could be a coach for. Just like with digital marketing agencies, there is a ton of competition, and it's easy to understand why. Loads of people like the idea of being able to live where they want, work when they want, earn money over Zoom calls talking about whatever it is that they find interesting most. However, I don't think the market is as lucrative. Yes, there's tons of demand for coaches and consultants and we started offering recently one-to-one consulting sessions for Facebook ad services and there's

5:57been tons of demand for it. They've sold really well. There's a link in the video description, by the way, in case you're interested. But usually, depending on the niche, people aren't willing to pay really high prices for a coach or consultant, perhaps in the way that they would be for, say, a digital marketing agency. It's also quite difficult to scale. You only have so much time in your day and yes, you can hire people to coach or consult underneath you, but that can be a little bit difficult. I mean, I've done it. It's certainly possible, but to do at scale is a tricky process. I do know exactly how to

6:25promote online coaches and consultants. You absolutely want to use the omnipresent content strategy. And look, if you just want a great lifestyle where you can travel the world, you can work when you want, you can make 100 grand a year, you can have a quite stress-free work life, then perhaps this is the perfect option for you. Factoring all that in, I'm going to rank this opportunity as a B. Business opportunity number five is a SaaS business, software

6:47as a service, or a software business. Now, this is often seen as the sexiest option when it comes to starting a new business. And that's because the potential rewards are absolutely enormous. When people build software businesses, they tend to have one of two outcomes. Either it's worth absolutely nothing or it's worth a ton of money and they sell it for a boatload of cash. Now, if you look at that statistically though, you are far, far, far more likely to build a software

7:11business that is worth [music] nothing. It's a really difficult industry to operate in and it's really difficult to win. The standard advice is to work with a technical co-founder and if you don't have the technical expertise yourself. I haven't run a software business, so I can't speak to that specifically, but I do know that when I'm assessing software businesses, I very much look at them as risky. [music] They require a ton of upfront skill, a ton of upfront capital, years of building them with no reward, and either a massive payout or most likely, absolutely nothing. If we compare that to other business types, let's go back

7:41to the digital marketing [music] agency example. If you say had the goal of making a million dollars a year and you failed at that goal, things didn't go to plan, you could still be in a position where you make $250,000 a year, which is still fantastic and you're successful and you're making a nice income. That isn't the case with software. It's either you have one of the best software offerings in your niche and it dominates or it's basically worthless because every niche can have one software that wins the market, maybe a couple of options if it's a really big niche. In terms of user acquisition using Facebook

8:12and Instagram ads, it's very much tried and tested as a way of doing so for software businesses and we always have a number of clients on our books that are software businesses. That's not too difficult to get right, but it's the other elements of software business that you need to get right for this to to really work. The potential rewards are enormous though and we can't discount that. The most valuable businesses in the world, many of them, are software businesses. So, factoring in those massive potential upsides, they're really hard to reach with those quite realistic negatives, I'm going to give

8:39the software business a ranking of a B. Business opportunity number six is e-commerce. So, so many e-commerce businesses have used Facebook ads and Instagram ads to acquire a ton of customers. And we have more e-commerce clients at any one time than we do any other business type. As you can probably tell here, I am differentiating between

8:56regular e-commerce and drop shipping. I'm assuming that with regular e-commerce you're going to hold stock, you're able to deliver that to your clients and customers quickly, which is great, and that you also have input over product design and functionality, which can really help you stand out from your competition. E-commerce does have some of the positives that you see with a software business in that it is very scalable if you get it to work well, but the negatives, the downside, aren't as severe. So, there are many small businesses, solopreneurs even, that make a good living off an e-commerce business. It's not a case of you're going to sell it for a boatload of cash

9:26or make absolutely nothing. The demand for products bought online is only likely to continue to grow as well. We all like purchasing things conveniently and that's certainly now the standard way of doing that. So, so far, so good, but there are some challenges with e-commerce as well. If you can ship your products to everyone in your country, or maybe even internationally, it means that anyone selling a similar product can also do the same thing, which creates a market dynamic where you can't sort of take a small local area and dominate that market. You're usually going to end up with one, or maybe a few, really dominant players in every

10:00market that win big. [music] If you can become one of those dominant players, then the sky's the limit, but that's really hard to do. So, adding in those positives and those negatives, I'm going to give e-commerce a B ranking. Number seven is kind of a subset of e-commerce, and that's Amazon FBA. So, FBA stands for Fulfillment by Amazon, and with Amazon FBA, you sell your products on Amazon, and you also give your stock to Amazon, and you let them handle shipping

10:23and distribution. Now, of course, Amazon is world-class at logistics, so they're going to get your stuff to your customers much faster than you could, which is great. But, Amazon FBA presents a few issues as well. Firstly, it is very easy for your products to become quite commoditized on Amazon. Amazon wants to give their customers the best option, which is

10:43often going to be the cheapest option. So, their recommendation system is going to orientate around the cheaper products within each niche. That encourages sellers to drop price, that creates a race to the bottom, and really eats into your margin. Our prices have never been lower. Son, you have to TALK LOUDER. OUR PRICES HAVE NEVER BEEN LOWER. AMAZON also charges you a fee for every product that you sell, and they charge an additional fee on top of that to do the fulfillment, to do the distribution, which also really, really eats into your margin. Whenever you sell via a platform like Amazon, you are also subject to any

11:13changes that they just decide to make. They could decide to increase the fees that they're going to make from every one of your sales, or change how much they charge to handle this fulfillment. So, it leaves you vulnerable as a business owner. So, as opposed to regular e-commerce, I don't like Amazon FBA that much, and I'm going to rank that down as a C. Now, I do want to quickly clarify that if you've built an e-commerce business that can stand on its own two feet and you want to sell on Amazon as well as your website, that's absolutely fine, but I would not base my entire business around selling on

11:42Amazon. As a business owner, that would give me sleepless nights. Business opportunity number eight is an influencer {slash} content creator. Now, I don't know if you've seen these, but there are some very, very shocking studies that show exactly what percentage of younger generation wants to become an influencer creator, whether that's a YouTuber, TikToker, Instagram

12:04influencer, whatever it happens to be. It's far more than half. Depending on what you look at, you're looking at 60, 70% of people want to do that. Now, whenever we're assessing new business opportunities, we have to look at what the competition levels are like. That is an important factor. And with the influencer content creator game, the level of competition is monstrous. It makes something like digital marketing agency or e-commerce look tiny in comparison. And based on that data that the teenage and students of today are going to want to move into that industry going forward, I think it's only going to get worse. It's only going to

12:35continue to become more competitive in the influencer creator space. You also have to factor in the potential upside. Now, let's take the world's biggest YouTubers for example. They make tens of millions a year, which is absolutely fantastic and you know, well done to them, but it's actually really small. That's peanuts, as crazy as it sounds, in comparison to what the very best business owners in e-commerce or

12:57software make. They become billionaires. So, I think even though the market is incredibly crowded and going to become more and more that way, I don't actually think the potential rewards are as large if you become one of the best in the world as they are in other business opportunities. If you really did want to pursue this option, then I think it's really important to pair your content creation with another type of business, which is exactly what I've done with my digital marketing agency. So, I built a personal brand into the Facebook ads, Instagram ads space, and I use that influence in order to generate interest and clients for my digital marketing

13:30agency. And I think that's really important because without that, unless you become absolutely enormous, you're likely to basically waste a lot of time without really making any money. One of the other big downsides that I've found to this influencer content creator business model as well is that it kind of traps you as the business owner in it. So, in nearly every other role in business, I'm able to hire other people to take that workload off my hands if I was doing it originally. So, within my digital marketing agency, for example, I've hired, you know, account managers to do client work and graphic designers and video editors and operations manager

14:01to run everything and an administration manager and all that sort of stuff, but I can't hire someone to present videos on my Ben Heath YouTube channel or other social accounts. And that would just be weird, which means that if I continue to want that to be significant and and a place where we generate revenue from, it's going to have to be me. With that in mind, plus the insane amount of competition, I'm actually going to give influencer/content creator a C. Business opportunity number nine is affiliate marketing. Now, like most people that started internet marketing about 12 years ago, which is what I did, I tried my hand at affiliate marketing and it's

14:34very attractive for new entrepreneurs. The advantages of affiliate marketing are massive. For those who don't know, it's simply selling other people's products and services for a commission, and if you can do that, it means you just get to sell. It's similar to drop shipping in that sense, and but you don't have to worry about any of the deliverables at all. You don't have to worry about refunds or anything like that. It's all going to be handled by the other company. So, the upsides are obvious and you can find just about any product or service to be an affiliate marketer for, and sometimes the

15:01commissions can be really substantial. You can earn anywhere between, you know, a couple of percentage points on the low end all the way up to 75, even 80% of the sale price as an affiliate marketer, but affiliate marketing does come with some issues as well. Not having any control over the product or service that you are selling can be a real issue because it doesn't allow you to be innovative, doesn't allow you to change things we can which can really help you stand out from the crowd. Also, because you earn a percentage of the total sale price as opposed to all of the sale price, it means that you need to find a

15:30way to acquire customers cheaper, and that can be really hard to do. And it's even harder when you factor in that platforms like Facebook advertising often don't like you selling affiliate products directly. Instead, it's usually best practice to use an intermediary step where you send people to say a page where they opt in for a lead magnet first, and then you find a way to get them to the affiliate offer through email marketing and other things like that. And that almost always increases your overall cost per conversion. And whenever you're assessing new business opportunities, I think it's a really good idea to look at the people that

15:59have made a lot of money and had a lot of success in that business opportunity by doing that. Nearly all the people I know that have made serious money with affiliate marketing have done so because they already have a large audience in that affiliate marketing is not their main gig. They've done something else, they've built this audience, and they've used it very successfully as a way to generate some extra income. I know of almost no one that's used affiliate marketing as their main gig and scaled

16:23that up and made that really successful. So, unless you have an audience already, I'd probably give affiliate marketing a miss. I'm going to rank it as a C. Now it's time for my favorite business opportunity in this list, the only one that I would give an A+ to, [music] and it's a local service business. [laughter]

16:38You serious? Now, I imagine a lot of you watching this are going to be quite surprised, maybe feeling like it's a bit of an anticlimax, but I have a very different way that I would run a local service business and how I would generate uh demand using Facebook and Instagram ads, something that you probably haven't seen anywhere else. I explain exactly how I would do it in this video here. If I had to start all over again, I couldn't use my personal brand, I couldn't use any money, any of the connections that I

16:59have, this is exactly what I would do.