In the new digital economy, websites like elance.com, ifreelance.com and mechanicalturk.com make it ridiculously easy to find large quantities of skilled labour quickly and to hire people to complete specific tasks very cost effectively.
This means that it has never been easier or cheaper for an entrepreneur with the right business model to build a good business fast.
You must start with a business model
Anyone who has taken one of my courses or read my articles knows that I’m not a huge fan of business plans for startups. I think they tend to cement ignorance. You never know how your business is going to be profitable until it’s making a profit.
I do believe that every startup needs a well thought-out business model. The 20 Questions analysis and worksheets embodied in the Build Your Business Now ebook we distribute in some of our classes is designed to help people construct a carefully considered model of the enterprise they plan to build. It helps people document their beliefs about:
- the customers they plan to serve
- the needs and desires they plan to address
- the products and services they will deliver
- the properties of those products and services that will make them sell themselves
- the price(s) those customers will pay
- the target markets they can reach most easily and cost effectively
- the methods they will use to reach those markets
- the tools they will use to deliver what those customers have paid for
- the competitors they share those markets with
- the potential strategic partners that also share those markets
- the people and skills they need in order to produce, sell, distribute those products and services
Entrepreneurs need to start with a very clear understanding of exactly how they think their business will work, so when reality deviates from what they expect they can change their business model quickly to accommodate what they’ve learned.
Once you have a business model, liquid labour can let you start work
From an economic standpoint, labour is “liquid” when it can move freely from employer to employer. Liquid labour is key to a responsive and flexible economy. When labour is liquid, as economic conditions change, human productivity shifts to meet needs as they arise. Prices adjust as demand for specific skills change. Changes in prices move labour to address whatever tasks the market values most at any given time.
The world has never known a more liquid skilled labour market than the one we have now, and modern entrepreneurs can leverage that liquidity to launch new businesses almost over night. By way of a practical example, let’s say you are a teacher with a specific expertise in supporting autistic children and their families. Through a site like elance.com or ifreelance.com you can:
- Hire a ghost writer to convert recorded lectures into a workbook that families and other care professionals can use to acquire the skills they need.
- Hire a design professional to layout the book as an attractive PDF file with supporting images and tables.
- Publish the book through CreateSpace.com, Lulu.com or LightningSource.com.
- Launch a WordPress enabled website through Godaddy.com to sell the product.
- Promoting your product to the market you have good contact with should lead to enough sales to cover your initial costs. If your product has been designed to sell itself, additional sales should follow.
- Promote your product through sites like PrLog.com and OpenPR.com as your sales increase will promote the new book to more of your target market.
- You may then elect to create additional content, in the form of DVDs, podcasts, and video on demand media, to reach even more families.
This entire process can be accomplished in a matter of weeks without hiring any full time employees and for under a few thousand pounds. The success of your business depends on your understanding of customers, your ability to drive the development of an exceptional product, and your ability to deliver that product to the market using the world of resources you have access to.
Using the same pool of liquid labour and online resources:
- Marketing and sales professionals can build affiliate websites to sell the products and services of others
- Animators, filmmakers and musicians can create, develop and sell media
- Designers can create, promote, sell and deliver everything from posters and furniture to clothing.
In short, with an exceptional business model, almost any entrepreneur can start a variety of profitable businesses in a matter of hours.
Is it really that easy?
Yes. There are specific issues that need to be addressed and specific skills you must acquire in order to launch businesses using liquid labour, but these requirements are fairly easy to meet when you know what they are.
You really do need to have, or develop, a good business model to start. The key to this strategy is knowing exactly what your target market wants and then designing a product that precisely meets their needs. You can use the liquid labour pool to assist in this process, but things go far more quickly if you are working to support a market you already know well. It is even better if they know you well.
You must master the skills required to break large tasks into small, manageable projects you can assign to multiple individuals. You will provide the coordination and continuity that results in a finished product that sells well.
You must become comfortable hiring people, directing their work, and terminating your relationship with them when your company’s needs are not being met. This is a skill every business owner has to master, but building your business using liquid labour requires you to use those skills frequently. Even though you may eventually develop a pool of talent you return to more often than not, not everyone will be available for every project.
Like any other skill, learning how to start businesses quickly and cost effectively using liquid labour takes practice. It is always wise to start small…
Doug Richard is a former BBC Dragons’ Den panellist and runs the entrepreneurial academy School for Startups.