The first question that you have to ask yourself is “What kind of business do I want to have?”. Well, the answer to that question comes down to what you have to offer and even the simple things like where you live. If you have read the first two parts of this series, you will have an idea of how you will start your business. Here you will come to understand what type of business you should start and where you fit into that category.
A service type is the simple type of a business, it’s you, providing your skills, and as a result, you get paid for that service. It the most common type in the world as it’s the easiest to do if you have the right skill set. For any time that you are trading your time in return for money at a fixed rate (e.g. plumbers, builders and accounting) you are providing within the category of a service type of business.
Merchandising is a little bit harder to get into, as it requires a lot of start-up (e.g.money, location, contacts) and even a little background knowledge. An example of a merchandising business are places like K-mart, Woolworths pretty much are supermarket or shop. Why this type business is popular is due to fact that they provide a massive range of products to an even wider range of people, making these types of business successful and able to pocket a massive amount revenue yearly.
Now I think we all know what manufacturing means. Everything has to start from somewhere. Manufacturing is very much the same, many people start small, manufacturing/building in their garage or a spare room in their house. Merchandising as seen above talks about supermarkets selling products. Well, a manufacturing business is the business that provides the products to those merchandising businesses. A manufacturing business is often called the start place – it’s where all the raw materials are pulled together and made into something else.
Hybrid businesses are unique as they are seen as a middle man. They fill the gap between manufacturing and merchandising. This type of business didn’t always exist as manufacturing filled this role. After the First and Second World War, companies began to change their decision making around how they were going to sell their products, after seeing the booming economy of Japan, which spearheaded this change. From then on, massive warehouses, storage houses, self-storage and logistics companies rules this space. This is because of the number of items being traded over the world just keeps growing and growing and companies started to understand that you couldn’t do it on their own.
As you can see there are many different types of businesses that you can pick from. Some are harder than others but pay off much better. It all depends of your skill set and how hard you want to work.