“The best advice I can give is to investigate all your options. Your choices range in levels of risk, cost, knowledge required, time demands, and more.”
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Effective Strategies is devoted to sharing ideas that can improve your business performance. This issue, we look at on considerations for choosing a business start-up. If you missed the last issue, click here to read it.
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Which Business is Right for You?
This is the second installation of a two-part article on considerations for starting a small business. In the last issue, we discussed all the things you should consider when starting a business. In this issue, we options available for people who want to work for themselves.
The best advice I can give is to investigate all your options. Your choices range in levels of risk, cost, knowledge required, time demands, and more. Here are a few options available.
Network-marketing companies such as Mary Kay, Premiere Jewelry, or Melaleuca. These companies provide a low cost of doing business and getting started. They have all the marketing materials and product development work done for you. Few companies provide advertising support. All you have to do is sell the products to customers and promote the business opportunity to other people just like you. If you love the pure entrepreneurial experience and creativity of designing your product line, you will hate the restrictions and rules of these companies. I know many people who are making a good income from network-marketing types of companies. They succeeded because they chose the right company for them and their area. In addition, they invested an enormous amount of time over a period of years in their success and the success of the team they recruit underneath them. Be extremely cautious of home-based business opportunities — many are not well supported by the company and provide too small a profit.
Sales. Some sales opportunities yield better flexibility with less risk than running your own start-up business. With many of them, you operate as an independent contractor working for straight commission — you are essentially self-employed. A good company has an established product line, is investing in advertising and marketing tools, and possesses a good reputation with satisfied customers. Real estate and mortgage sales are two fields that provide great flexibility and ability to choose the number of hours you want to work. Of course, the number of hours your wisely invest in your expertise and marketing are directly connected to your level of success.
Franchises. The system a franchise provides yields an 80 percent success rate on average — a dramatic advantage over the typical 80 percent failure rate of small business concept start-ups. There are many associated costs and requirements. Most franchise companies want to know about your business expertise and how much available cash resources you have. Most franchises require a large cash injection for facility, equipment, inventory, and labor. In turn, they can provide a great opportunity to ride the coattails of a successful, well-marketed business format.
Service businesses. You probably have a skill that others need and would pay for. Perhaps you are available to run errands or clean houses. Neither business requires a great deal of start-up capital beyond a vehicle and a few supplies. You may want to provide graphic design or bookkeeping services. That requires a computer and some software in addition to the skills. It is even more expensive to run a larger service business such as a heating and air conditioning service company. Factors such as your expertise and desire for size of company will help you decide whether a business is right for you. For example, running a wrecker service may not be right for you because you don’t want to be on call 24-hours a day.
Rental property. If you love working on houses and have enough cash to invest, this is the business for you. Rental property can allow you to purchase property, hang on to it while it appreciates in value, and rent it for a profit. Smart purchases, sweat equity, a good rental market, and a watchful eye will help you grow net worth and yield a monthly income. If you want to be less involved in the renting process, consider hiring a management company. Depending on your financial ability, time, and remodeling skills, you could also consider flipping houses — buying houses with great potential, fixing them up, and selling them for a profit.
Retail businesses. If you love to assemble collections of products to sell, consider running a retail business. Most people think of retail as operating a store but your business can take other forms. You might sell your products in catalogs, on the internet, at expos or trade shows, or as a school fund-raiser. Procuring and storing merchandise for sales can require great financial reserves and risk that require the right projections coupled with the timely marketing. Many retail businesses require a storefront to look reputable to potential customers. That can create expensive overhead expenses and require additional labor hours during normal hours of operation.
That’s the brief lowdown on several different types of businesses that allow you to be your own boss. As I said in the last article, it’s critical that you look at all the factors — especially discussing the opportunities with those close to you. They can serve as a sounding board for you and encouragement when times are tough. There are no risk-free cash cows out there. If it seems to good to be true it probably is.
|Carrie Perrien Smith is a professional speaker, published writer, and owner of Soar with Eagles, a Rogers, Arkansas-based company. She is a publishing, communication, and training industry veteran whose corporate career spans 15 years, split between Texas Instruments and Wal-Mart Stores, Inc. Her company offers training, book publishing, conference management, and consulting services as well as a professional speaker’s bureau.|
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