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HOW TO START A BUSINESS : Selecting Your Type of BusinessIndeed starting a business and what type of business is one of the most challenging tasks anyone can undertake. One must balance competing priorities, innovate, plan, forecast and differentiate their offerings, get the product to market, manage finances, hire the right people and forge partnerships. However, the most important thing is choosing the type of business that is right for you and doing the things that make a difference. One of the things to consider when starting a business is to decide what kind of business you are trying to create. If you do not know what type of business you want to start, then errors and doubts will constantly feature in your venture. Usually, there are four categories of business where one can choose from; lifestyle, micro, growth and revolutionary. Micro business is a small business that has no employees other than the founder. Often times it serves to provide the business owner with supplementary income or is a means of survival for a person who cannot find a job. Lifestyle business is a business that is viable enough to enable the owner to live a fairly comfortable life while working for oneself. Growth business is the type of business where the entrepreneur continues to push for growth. The entrepreneur in this business is competitive and sees the business as more than just earning a living. The owners also wishes to create substantial wealth are driven to outperform those around them while at the same time aiming at making a difference through the business. Finally a revolutionary business is one that transforms the industry or creates a new industry. Revolutionary entrepreneurs have a grand vision for what their business can do and enlist the help of many stakeholders to make their vision a reality. They raise finances from external investors and hire talented employees and will do anything to succeed. Choosing the right business is a life-altering decision, one that will affect you for a long time to come. Serious decisions need to be made and therefore, there are important things that one needs to consider. Entrepreneurs are attracted to different types of businesses. Some are home based business, for instance writing, daycare or clothing design, while others envision a traditional business that attracts pedestrian traffic, such as in shopping arcades or another high traffic area. Each type of start-up has advantages and disadvantages, but the same when it comes to starting a business. The advantage is that you get to be your own boss and have total control over the company’s operations; you decide what hours to work and what products or services to offer and you can work as little as you want! The disadvantage is that you put yourself on a financial risk, the start up costs are high and until the business starts making money you have to cover all the expenses including your own salary. You also have to create your own brand identity and attract enough customers to sustain the business and it takes longer to build a business from the ground than to open a franchise. The second option is to buy an existing business. This can be attractive for new entrepreneurs because it doesn’t involve the research and foundation work required to establish a start-up. The main advantage here is-you can step right in and start running a business that is already in operation. No guesswork or long-range planning is involved before you can start. Financing may be easier to get based on the company’s existing track record and you already have an established customer base and a pre-existing structure for your daily routine. Finally you can customise the business to suit your own needs, as long as you are still serving the needs of the customers you have "purchased." The disadvantages are; the purchase price can be steep, since the existing business owner has already made the start-up investment and built up the business identity and customer base, the purchase price can be substantially more than starting your own business. The business might also have existing debts. If you purchase a business that’s already in operation, you are buying not only the business assets, but you are also responsible for the business liabilities as well. It is vital that you do your homework well to learn everything you can about the company’s reputation and the possible outstanding debt before you make the purchase. Your search should also include monies owed to the business and how old the debts are. Even though your accounts receivables are business assets, if you cannot collect, then they are a liability. The third option is to purchase a franchise which can be lucrative in financial terms especially if you’ve got a good location and it’s a well-known name in your market. You can either purchase a product/trademark franchise; in this case you’re buying the right to sell their goods, such as herbal supplements, car spare parts and cleaning products. You can also purchase a business format franchise, like puncture seal or Nandos. Advantages of a franchise are; instant name recognition, People who are already familiar with a well-known company are already prequalified as customers. In most cases, especially the business format franchise, the franchisor provides the business expertise, such as marketing, training, financing assistance, management guidance, site location, and operational procedures. Financing is easier to get based on the franchisor’s expertise and existing business model (depending, on whether the lending institution finds your credentials and management ability credible). The disadvantages are that there is limited creative control because you have to follow the franchisor’s guidelines with respect to design and appearance and what products you can sell. Purchase price, set-up fees, and maintenance fees can be more costly than the other two business options. Finally because of Contractual obligations, you may have to conduct your business according to the franchisor’s method of operations instead of using your own business judgment. Other things to consider when choosing a business are: yes you have a great idea, but it is a niche market, and someone has already beat you to it, can you manage to compete with him/her and curve your own niche. Highly competitive markets are no fun if you constantly have to go head-to-head with competitors, it will get old very quickly and you will feel like you have been in the business for ages. No matter what type of business you choose, your success will depend on your entrepreneurial drive, your passion and your commitment to its daily operations. By: Beatrice Wanja May 21, 2009 - http://www.monitor.co.ug/artman/publish/smartmoney/Selecting_your_kind_of_business_85161.shtml How to Start a Small BusinessHow DO you start a small business? Let's take into consideration you have thought out an angle to start a business that is going to revolutionize the industry. Now it's decision time. Are you willing to take a financial risk on the strength of your business idea?...Why Start a Business?Though to start your own business does mean that you'll be stepping away from the relative security of a regular paycheck, having the desire to own and start a new business...Starting a Home-Based BusinessStarting a home-based business can be a little complicated. The checklist below covers the most important sujects that you will need to consider starting your own business...Partnership for Business a Good Idea?Business partnerships have been an important part of entrepreneurship and startup success. The reasons are simple: complementary skill sets, shared equipment ...What it Takes to Start a BusinessWhat attributes suggest someone's a good candidate to start their own business? ...To Start a New Business, Appearance is EverythingThe success of starting a new business depends largely on the owner's ability to convince potential employees or customers that the business is operational,...Before You Start a BusinessIt's a terrific idea for aspiring entrepreneurs to work in the industry they want to start a business, whether they are college business majors...Choosing Your Business NameKeep in mind the availability of a domain name when choosing your business name. Also ask a friend or relative with a knack for words to help you brainstorm....Business Start-up ChecklistUse this small business start-up checklist make sure you don't miss any important steps. Taking a college business course would help you considerabley also....Other related Articles: Business Furniture SolutionsThere is a whole list of business furniture that must be kept in mind before buying what you need. Choose solutions that are best for your working environment and select every item carefully keeping in mind its purpose and usage....Best Businesses to Start in a Recession August 11, 2010Choosing to start a business in a recession can be risky if you don't know what you are doing. Do your research, information and do some planning. Some small businesses thrive during a difficult economy. These businesses are called counter-cyclical businesses...Getting Money to Start a Business July 1, 2010Getting money to start a business will be tough in a down economy, but not impossible. Depending on the type of business and the amount needed, you may need to acquire...What Home Business Should I Start - Service, Retail, or Product Based Feb 3, 2010Any good home business begins with a good idea. As you brainstorm, plan and prepare to start your new home-based business, you must first understand what kind of business...How to Run a Business from Home Jan 13, 2010Below are 9 helpful suggestions from other business savy entrepreneurs on how to run a business from home ...Start-Up a New Business Jan 7, 2010Over the past 15 years, small business has generated 64% of America's net new jobs, and more than half of American nonfarm GDP is created by small business. Why not start up a new business?...How to Fund a Start-Up Business Oct 13, 2009Here are some sources for funding a small-business for start-up business owners ...The Basics of Starting a Business Sept 3, 2009You’ve made the huge decision to start a business. Most efforts to start a business end in failure, but with the right business idea you can become successful. ...How to Start a Profitable Home Based Business August 17, 2009More and more people are investigating the possibilities of starting their own extra-income profitable home based business. Most of these part-time endeavors...5 Steps to Building a Successful Niche Business August 10, 2009Building a successful niche business with products and services can have the potential to generate big bucks if they capture the hearts, minds and wallets of a...10 Worst Business Partners For Your Start-Up July 3, 2009Business Partnerships can turn out to be a blessing or a curse. For every thriving partnership featured in Entrepreneur, ...How to Build a Family Business May 25, 2009More than 80% of businesses in America are considered family businesses, according to the Cox Family Enterprise Center. But as Professor ...Selecting Your Type of Business May 20, 2009Indeed starting a business and what type of business is one of the most challenging tasks anyone can undertake. One must balance ...Right time to start a business? March 29, 2009I am in my 20s and recently laid off. I have always been interested in starting a business, but with the state of the economy, I am a little unsure ...Start a Business in a Recession March 24, 2009Believe it or not but some entrepreneurs are actually looking to start a business in these economic times. ...How to Start a Start-upAndy McLoughlin spoke a little while ago about how he started a business, Huddle.net, from a simple business idea in a pub to a fully working new business... |
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