When
you’ve decided to go into ownership, you need to know what type of business
that you want to pursue. You should start
by identifying the products and services that you intend to deliver. You can
easily narrow down your choices by looking at the following factors:
Researching Costs
Examine the costs of businesses in different industries and regions.
Look into Imported Goods
Identify
which goods and services that local companies and other organizations buy from
outside your area.
Explore Selling Already-Manufactured Goods
Look into
the possibility of selling goods made by others.
Know the Bills and Laws that Benefit Certain
Industries
Check
changes in legislation that might offer business opportunities that you could
use to your advantage.
Measuring the Demand of What You
Want to Sell
Once
you’ve determined the products and services that you want to sell, you want to
investigate that market to determine if there is a demand. Find out what growth
opportunities exist that can benefit the business.
Here are some simple yet important questions to ask:
- What are the product and/or
service that you want to sell?
- Is the product or service
unique or are there many like it?
- Who is going to buy your
product and/or service?
- Why should someone buy your
product and not someone else’s?
- How many people will buy your
product and/or service?
- Is the market stable, growing
or shrinking?
How many competitors do you
have?
- How price-sensitive is the
product and/or service that you want to sell?
Selecting the Right Type of
Ownership
There are
a few avenues that you can take when deciding the type of ownership that you
want. It all depends on if you want to be the one completely ruling the roost or
have some help through a partnership or a network of associates. Perhaps you want
to start a franchise? There are plenty of options for you to choose. It all
comes down to which one will be the best fit for you.
Sole Proprietorship
You may
want to take on ownership alone and all the responsibility that goes with the
business, including all taxes, debts and day-to-day running of the business.
Partnership
This type
combines the skills and experience of two or more people that can share the
workload and manage operations with some flexibility. Just remember to use
caution if you propose a partnership to your friends as that could open up a
can of worms. Ask yourself if they would really make good business partners, do
you respect their judgment and what they would bring to the table.
Franchising
This is an
incredibly easy and popular way of creating your own business by investing in a
new branch of an established company. You get considerable support from the
company and enjoy the advantages of a proven product or service. However, the
rewards are limited by the franchise agreement, and you are committing yourself
to operating according to someone else’s policies and methods in exchange for
less start-up risk. Remember to research thoroughly before committing yourself.
Networking
This
option is an informal agreement that you can make with business associates. You
still retain control of the company, but you build relationships with others in
the same kind of business to share some costs such as marketing and advertising.
Keep in
mind that this arrangement has no legal foundation unless you enter into
specific contracts with associates, but that depends on the trust that you have
with them. Networking can lead to a larger customer base and speed the growth
of your business; however, you must be prepared to give as well as take.