Are you wondering how to make money as an entrepreneur? The truth is, there are many different ways you can be an entrepreneur, which means there are many different ways to make money as one.
What is an Entrepreneur?
An entrepreneur is an individual who operates one or more businesses. They also usually take on financial risks to run or own their businesses. That is it.
Looking at that definition, you might have realized that it covers a broader variety of things one can do. Here on some types of businesses, this definition can apply to:
All of these types of businesses would make you an entrepreneur. I know side hustles seem like it may like a stretch, but it is not. You are still trying to make money outside of the traditional way of being paid by an employer.
You are not an employee. You are an independent contractor, which means you are an entrepreneur.
With this being said, since there are many different ways you may be an entrepreneur, there are many different ways to make money as an entrepreneur.
Different ways entrepreneurs make money
So keep on reading to learn many different ways to make money down whatever entrepreneur path you choose to take!
Small Businesses, Startups, and Large Companies
Although the size and scope of these companies can be very different, the ways that people make money when they own these types of businesses are pretty similar. So here are some other ways to consider or strive to.
There are really only two ways a business makes money:
- Selling a Product
- Selling a Service
It really does not matter how big or small the business is. Still, once you break down how every offline business makes money, it is either by selling a physical product or a service.
Think about every store you have ever shopped at or every company you have ever called. You were either looking to buy something or hire someone to do something for you.
Suppose you want to be an entrepreneur with a physical location. In that case, you will need to develop which business model you will have, or both. Let’s look closer at this type of model and see this more in detail.
Selling a Product – Wedding Boutique
Let’s say you decided to open a wedding boutique. This would be an on-site store where people could buy clothing, and perhaps more, for your wedding.
Most wedding boutiques sell wedding gowns and bridesmaid’s gowns. They may also sell other bridal items like bridal lingerie, undergarments, headpieces, shoes, and jewelry.
The basic premise of making money with your boutique is to sell products. But, of course, when you have a physical store, there is a lot more to making money than just selling a product.
The money you have coming in has to be more than the money going out. This is a very delicate formula that you need to create, not only to be in the black but to keep up with industry standards and beat out your competitors.
You will have to pay for basic things like employees, the building, utilities, supplies, and products. The products you sell will have a specific markup which will be the profit on each product.
However, this markup is not really the profit, as the profit is what you make above what you spend. You are spending money on payroll, supplies, and other incidentals, so the profit is how much money you have after paying all your bills.
If you had a wedding bouquet, you likely have a supplier that provides all the products you sell. Here is where some additional profit can be made:
- You can compare suppliers for the best price.
- You can buy in bulk to buy each item at a cheaper cost.
- You can use more than one supplier, like buying from a few handmade micro-suppliers who charge more for their handmade items, and you will also get a more significant cut.
- You also want to have some cheaper add-on products that most customers will buy with a high-profit margin. These could be items like wedding day kits, makeup bags, journals, or wedding planners in a wedding boutique.
Finally, suppose you are a designer of any kind and can make anything to do with your business (dresses, makeup kits, wedding centerpieces).
In that case, you could also sell these products. Because you are making them, the cost will only be the supplies and your time – but the profit margin could be very high.
- Clothing Store
- Jewelry Store
- Electronics Store
- Liquor Store
- Craft Store
Selling a Service – Lawyer
Many entrepreneurs are not selling a product at all. They are selling a service. A lawyer is an excellent example of this. If you are hiring a lawyer, you need a service – which is their knowledge and expertise to either accomplish something (create a contract or a last will and testament) or to represent you in some legal processing (divorce, investor contract, or filing a copyright infringement claim against someone)
Obviously, this is not just something you can just do – there are many laws in place to practice law in each state. But if you are a lawyer, you would be providing a service to whoever your clients are. You might give general counsel or something more specific such as having a practice in family law, corporate law, or criminal defense.
The bottom line is that people do not go to a lawyer to buy something. They are there for service. Some services, such as providing legal advice, can be very lucrative.
- Landscape Designer
Combo of the Two – Kitchen and Bathroom Store
Many businesses have the possibility of a combo – they offer both products and services. Some people only get one or the other, while others utilize the same company for both. A kitchen and bathroom store is an excellent example of this.
A customer may go to this type of store for appliances. They may just buy the appliances, or they may want to pay extra for delivery, installation, and removal of old appliances. But, of course, in a store like this, a customer might be getting even more and need additional service.
For instance, if someone wants to redo significant parts of their bathroom or kitchen, they could go to this type of store to look at things like countertops, cabinets, backsplashes, flooring, faucets, lighting, or a new bathtub or shower.
Besides just buying the available materials, they may special order items and even contract with the store to have their bathroom or kitchen remodeled.
This is an example of how an entrepreneur could make money off the profit of products they are selling and their services. They will likely make a higher profit on the services offered than the products.
- New Age Shop Sells Products and Offers Tarot Readings
- Makeup Store Sells Products and Offers Makeover
- Beautician Sells Service of Hair Cut and Color and Sells Hair Products
Online businesses can be similar to selling a product or offering a service are still great ways to make money. However, there are some other ways you can also make money as an internet entrepreneur,
Selling products is still one of the main ways you can make money online. This could be products you buy from suppliers, buy yourself or make yourself.
For instance, you might have a drop shipper who provides your products, or you may go to local stores to buy things not widely available outside your area and sell those online as there is a market for them.
This is especially true for unique merchandise or when people who left your area still love things from your area they can not get anymore.
Examples and Ideas:
- Selling With a Dropshipper
- Selling Products, You Bought in Bulk
- Selling Products, You Bought Locally
- Reselling Products Found at Auction
- Selling Products, You Make
You will see online that you do not have in a traditional store or location is getting money by sending customers to another place to buy their products. On the internet, this is usually either lead generation or affiliate marketing.
For either one of these things, a person has some kind of online presence such as:
- a website
- an email list
- an influencer on social media
They will use this online presence to present a product or opportunity to their base (email list, website visitors, social media followers).
Suppose the opportunity is a lead generation for the entrepreneur. In that case, they will get a fee per person that does an action. The action could be buying something, but often as this is only a lead, it may be simpler to sign up for a newsletter or download a free ebook.
This is usually a quick, one-time action. If someone is going to sign up for something, they typically do it right away.
Affiliate marketing is anytime one person sends another person or people to someone’s product. That person buys that product, the referrer will get some kind of percentage of the sale.
Now, there are many variables to this model. For example, most people do not see a product once and immediately go buy it. Because of this, some companies will give affiliates extra time for the sale.
Let’s pretend I have a website all about women’s fashion. On this site, I have links to various stores that sell clothing, shoes, and jewelry. If someone clicks on a link, a cookie is attached to tell that store how the customer got to them.
If a customer purchases something and the last cookie shows the store that I was the referrer and the cookie was within the time they are granting me to generate a sale, I could get a percentage.
Cookies can be anywhere from 1 day to a lifetime. Here are some examples of standard cookie lengths to make me eligible for the sale:
- 24 hours
- 30 days
- 90 days
- 180 days
- 365 days
Of course, you may also run into different lengths, but those are most common. If I fall into that cookie length, I will get a percentage of the sale. Here are some standard rates in different markets.
- 2-5% Jewelry
- 4-8% electronics
- 10-15% clothing
- 25-50% digital content
As you can see, what you can make will depend on how many customers you can send and how much you could make per sale. For example, you may make 10% on a clothing site, but your average commission will be less than $20.00 based on how much a person is buying.
However, you might only make 5% on a piece of fine jewelry. But if someone is buying a diamond ring or necklace that costs $2000.00 – 5% of that is $100.00.
These are all the things you would want to consider and think about before deciding what to do.
Selling a Service
Selling a service online is similar to offline. However, except for the service you are selling on the internet, you may not have to be local to provide. This could include something like teaching someone a skill or designing a graphic for them.
Examples and Ideas of Services:
- Virtual Assistant
- Freelance Writing and Editing
- Personal Stylist
- Meal Planner
- Data Protection
- Financial Advisor
- Photo Editing
- Online Tutor
- Vacation Planner
Advertising is an excellent way to make money online if you either have a website or have a large following online. If you have a website, you could put contextable and photo advertising on your website. You could either get paid per click or a certain amount for 1000 views.
Besides traditional advertising, you could also sell advertising locations across your website or have sponsored posts – an article or blog post you post on your website that someone pays you to publish.
If you have a large following, you can get brands to pay you to endorse their products. This could be anything from a social media post, a video, or an entire post on the product. The more followers you have, the more money you can make.
Membership Only Content
People can also make membership-only content. This is usually someone who already has a substantial following. For example, someone could make exclusive videos, websites, articles for only members. Members will pay a fee, usually monthly or yearly, for access.
Besides membership sites and content – you can also have people just make donations. People who really love your content will be willing to make one-time donations or even a monthly fee to help support you; this will ensure you continue creating the content they enjoy.
Side hustles are a popular way for individuals to make money. This is usually a service you provide—yard work, tutoring, or mystery shopping.
Examples and Ideas:
- Deliver Groceries
- Deliver Food
- Ride Share
- Social Media Virtual Assistant
- Teach Online
- Clean Houses
- House Sit
- Pet Situations
You may like the following articles:
- How to Start a Home Decor Business
- How To Start a Home Inspection Business?
- How to start a carpet cleaning business (7 Easy Steps)
- 14 Steps to Starting a Successful Photography Business Without Experience
- How to Start a Woodworking Business – Helpful guide
- How to start a lawn care business – Complete Guide
Now you should have a better idea of how to make money as an entrepreneur. Entrepreneurs have many different ways to make money these days. All through the majority is based on selling a product or selling a service.
However, there are many other ways to generate income streams. If you are thinking of becoming an entrepreneur, you should decide what you want to do and create these income streams.
Bijay is an entrepreneur and start-up founder having more than 14 years of IT industry experience. He is the co-founder of TSInfo Technologies, a SharePoint development company.
A dedicated professional and very passionate about public speaking and also wrote thousands of technical blogs in various technologies. He also wrote a lots of blogs on entrepreneurship, investment, startup, business, manage money tips, etc.