When you first launch a new business, there are many questions that you’ll need to ask yourself. For instance, what kind of products are you going to sell? Who will your ideal customer be? What are you going to do to fund your business initially, and what kind of business loan will you need?
One of the most complicated questions of all, is what kind of business do you want to run? There are many different structures out there to choose from, and the one you choose can affect the kind of success that you get. Here are some of the questions you can consider when you’re deciding what sort of business you want to start.
- Retail or Wholesale?
Where do you think you would work best on the supply chain? Retail or Wholesale? Wholesalers buy goods in large amounts and sell them to other distributors and resellers. These people typically need a much bigger business loan, so if you don’t think you’ll be able to get a lot of capital to start with, then you might not be destined for a wholesale company. On the other hand, retail businesses sell their products to customers directly and can invest as little or as much as they like in the company, to begin with.
Of course, it’s important to remember that if you don’t invest enough into your business a retailer, you might have to cancel or reject orders from your customers, which could damage your long-term reputation.
- Independent or Franchised?
There are plenty of big-name brands in the world today that offer people a chance to become a part of a franchise. Think of how McDonald’s has locations all over the world for instance. When you buy a franchise, you buy an opportunity to sell someone else’s product. This means that you may need a loan to pay your franchise fee, and you’ll also have to pay for royalties when selling the product. However, you will benefit from a pre-established presence in your chosen industry.
As an independent business owner, you’d be launching and building your company entirely on your own back. There’d be no existing products to sell or branding to use. This means that you’d have complete control and freedom over the organisation that you develop. Although this does allow you to be more creative, it also means that you might struggle to make an income at first when you’re building a reputation in your niche.
- Product, Service or Both?
Next, you’ll need to think about the kind of offering your business is going to deliver. For instance, if you’re a trained professional, like an accountant, you could offer accounting solutions to people, so that they don’t have to do their own financial work. This means that you’re not selling a product, and don’t have any shipping and handling fees to think about. However, you may have other fees to consider, like liability insurance.
If you’re not trained in anything, or you’d prefer to simply sell products, then you’ll need to decide what kind of products you want to sell, and how you’re going to deliver them. One cheap option is to use the dropshipping method. This is when you sell products from another manufacturer and act as a kind of middle man between that company and your customer. The dropshipping manufacturer will ship products to your clients for you.
It’s also possible to sell a combination of products and services. For instance, a photographer might sell wedding photography service packages, as well as personalised brochures and paintings from their website.
- Brick and Mortar or Online?
Finally, how are you going to run your business? Will you do everything online, or would you prefer people to come and visit your company in person? If you decide to have a physical storefront, then your loan is going to be bigger when you first launch your company, because you’ll need to have a physical retail space that you can sell from. Depending on where you’re located, real estate can be very expensive.
On the other hand, selling products entirely online as an eCommerce business demands fewer start-up costs, though you will still need to invest in the materials and items to make your products. You’ll also need to find a service that can reliably ship your products to your customers, as they won’t be picking the items up from your brick-and-mortar store in person. This can be where dropshipping tactics come in handy.