Choosing the Right Business to Start
There are many types of businesses. It can be confusing especially to those that are just new to the field of entrepreneurship. However, knowing the many kinds of business models can help simplify that task.
You’ll be surprised at how simple they really are once you know about these business models.
Starting a business can sound so grandiose to most people. When most people hear that a friend is starting a business, they would probably think that he’s on his way to becoming rich or improving his life greatly. While that for the most part is true, starting a business is never easy. You have to go through some pitfalls and rocky roads before you get to the light at the end of your tunnel.
Starting a business involves many steps. What makes it so difficult is that there are so many businesses available. Aspiring businessmen, without proper research and guidance, would probably fall for the classic mistake: making an investment in the wrong type of business. The right to do, actually, is to choose a business model that’s appropriate to your interests and even your personality.
The Different Kinds of Business Models
Like mentioned earlier, you have a lot of choices to select from when you set your sights on starting a business. Each business model has its own distinct structure and way of being conducted. They also cater to different personalities and preferences, as well having their own advantages and disadvantages. Here are some of the most commonly chosen models and a brief overview of each:
The brick-and-mortar is the classic business setup that we are all used to. This is also the most expensive to start up. You would need a separate space to conduct your business like say, a shop, boutique or a plant depending on what you are going to sell for a living.
These are businesses that are run from a small office space in your own home. Home-based businesses include arts and crafts, cake baking services, and even private investigation businesses are run from home. Most entrepreneurs prefer this business model because it gives them the flexibility they need to shuttle back and forth between business and personal life.
Although they are home-based businesses at heart, these types of ventures are so diverse that they deserve to be put in a class of their own. Like the home-based business, e-commerce ventures offer flexibility. Through the far-reaching abilities of the Internet, you can tap into a wider base of customers compared to the home-based and the classic brick-and-mortar business model.
- Franchising and Licensing
Franchising and licensing is yet another home-based model, which can also fall under the e-commerce definition. Franchising involves acquiring a license from a large and well-known business and selling their products on their behalf. You, as a seller, earn percentages or commissions from every sale you make. This is good for those who are good at marketing since they have better chances of earning huge amounts of commissions.
- Multi-level marketing
Although similar to franchising, MLM involves selling and building up a network. Although this has good potential for earning, it is only possible if you are high up in the network triangle. The more people you have under your own network, the more money you earn as time goes by.