Small Business: 6 Tips For Choosing The Right Business Model
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Today, Small business entrepreneurs are not encouraged to start up businesses just to make money because this is the singular reason for nine out of ten businesses failing when the entrepreneur abandons the business as he experiences difficult times in the business but entrepreneurs are now encouraged to think about their business not only as a profit-making venture but a service to their fellow men, community, city, economy and country. Though, Profit is the principal motivation that propels entrepreneurs to invest in any business. You can read this insightful article for more knowledge on how to manage your small business.
So, how do you know a small business model that suits you before investing in it? This article contains the vital guide to determine the right business model that will suit you in order to help you succeed faster and quicker in your dream business. This article tends to answer those initial small business start up questions most inexperienced entrepreneurs ask in order to clear their doubts and know if they have the ability to succeed in this business they desire to invest in.
Here is The Guide to Choose the Right Business Model for New Entrepreneurs:
1. Do You Know The Business?
It is so sad that most entrepreneurs invest in a business based on a tip given to them by a friend, relative or colleague in the office. The number one factor that guarantees your success in a small business is your personal knowledge of the business. You need to know the business, it’s risks and success factors not just opinions given to you by others. You can know the business by asking questions from those who are already involved in that type of business, you can attend serminars and business conferences organized by people who own and operate the type of business you want to invest in.
2. Do You Have The Skills?
Every business has it’s own unique operating environment, rules and regulations, challenges and structure that requires a particular set of skills to operate. Now, the second question to ask yourself is: Do I Have the necessary Skills to operate this business? If your answer is No. Then you need to start looking for ways to acquire and learn those skills related to that particular business.
3. Who Are Your Competitors?
Before starting a business in a particular niche market, you need to find out if there are other people who operate businesses in that particular market, if there are other businesses in your target niche market. Get to know about them, find out how big their businesses are, and their dominating power in the niche market and the size of their customer base. Also, find out if you can go into partnership with them or build a business centered on enhancing their businesses (that is if you cannot compete directly with them in your niche market) or start your own business and compete with them in your target niche market.
4. How Can I Dominate My Niche Market
After studying about your competitors, and finding out about their market share, the next thing to do is to ask yourself: how you can dominate a percentage of your niche market? You can do that in three (3) ways:
· You can sell your product or service at a cheaper price.
· You can sell your product or service in bulk in your target market.
· You can build a wider marketing/product distribution network to sell your product/service.
. You can launch an online version of your service if there is no website doing such.
Though, there are other ways to dominate your niche market but these strategies seem to work better based on experience and market research.
5. What Resources Do I Have?
You need to think of the resources you have currently to start up your small business. Your resources can be specified under these categories;
· Finance how much money do you have at present? And is it enough to start the business? If it’s not, how much extra money do you need and where can you source for the money? You need to be very sure of your financial resources at all times and how far it can take in the business before you need to borrow.
· Information: what informational resources do you have at present. Information is another form of capital you need to start up your small business. What current information do you have and where can you get the information you need and at what price?
· Raw materials: are you going into a production based business, do you have the required raw materials, if you don’t, do you know where you can get them at cheap rate for now and could you go into long term relationship with the suppliers?
6. How Will I Raise Extra Capital For My Business?
Before you consider starting a small business, you need know the cash needs of the business at short term, middle term and long term duration and how you can raise money to build your business from ground zero to the top. You need to think of ways to raise extra cash for build your business in order for it to be financially balanced and be well positioned to create wealth and meet the demand of a wider market niche in the future.
Rushing out to start a small business is not good at all, you need to first ask yourself the above questions to really know if you ready to start the business. If you like this article, please make a comment and share it in social networking sites with your friends and associates.