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KristineS
10-04-2008, 10:05 AM
If you were advising someone who was just thinking of starting a new business what sort of business would you advise them to start? A service business? A business that manufactures a product? Why would you give the advice you would give?

I'm interested in finding out what businesses people think would work in the economy we have right now.

Dan Furman
10-04-2008, 02:16 PM
I'm of the opinion that, to a point, almost anything can work. It's the execution and work quality that sets people/businesses apart.

To me, it's more important that you start a business in something you like to do, or something you are good at (many times the same thing). If you like to build sheds, then start a shed building business. If you like to fix cars, start an auto repair business. If you like to work with computers... etc etc.

That said, the other side of that coin is market. Service type businesses tend to have an easier market to access. And it usually pays better, too. Sales / manufacturing type businesses are tough to make anything at. For example, I know someone who makes nice beaded jewelry. That's great for making a few bucks at the craft show, but I'm not really sure how viable of a business model this is for most people (almost anything "crafty" is somewhat suspect in my mind - that kind of stuff is usually best left as a hobby.)

If someone was unsure of what they wanted to do (i.e.: "I want to work for myself... I just don't know what type of business to start") my advice to them would be to stay away from owning a business.

orion_joel
10-04-2008, 08:58 PM
I would ahve to agree on most points Dan, i also believe that any business can work with the correct execution.

I would probably lean toward suggesting a service or consulting business, in the area you have most knowledge for the majority of people. As i think services especially if they are an essential service will keep going even if at a lower rate for the time being. The key at the moment is that if you can get set up and maintain the business through this slow time, then you will be in a hugely better place when the economy starts to pick up again. At this point with more good execution you could potentially do very well.

On the front of crafty type businesses i only half agree, while something like as you suggest beaded jewelery, may not be a business that has the same potential for income as a service based business. I do think that there are some other crafty type businesses with potential, i know of a number of people making what would be classed as crafty businesses, more so because of what they do then how they do it.

I think the differentiation between a hobby and a business comes down to how time is factored into the profit model. On the same examples as before. A beaded jewelery business is more likely to fall into the hobby model as the time required to make many of the pieces may leave you making less the minimum wage on much of it, however it may be something you enjoy doing and can make that little bit of money on the side. However on the other front embroidery for many would be classed as a hobby/crafty business, but with a commercial machine you could easily create half a dozen items an hour that you could allow you to make much more then minimum wage.

So i think the separation needs to go much further then crafty being a hobby, but this may be getting a bit to finicky.

Business Attorney
10-06-2008, 12:18 AM
I think either a service business or a manufacturing business can be good. I also think that there is still room for good distribution businesses and retail businesses, but both of those require substantial capital investments in inventory and can be very risky for a start up.

orion_joel
10-06-2008, 12:46 AM
That is the big problem i think, there is huge opening's in so many different area's but the required capital can really impact the ability to take the opportunity. Even more so with the lower availability of funding from the bank and such.

BillR
10-09-2008, 12:58 PM
Inc. magazine does a list every year on what the growth sectors in the economy will be.

#1 recently was business technology services. Anyone who gets into this and tries reasonably hard should do well. You don't even really have to know it that well - it's more an issue of being able to manage customers.

Business Service Automation will grow crazy fast now that the economy is in a downturn too - I plan on looking into how I can help my current customers save money by doing more automation.

Cornish Steve
10-09-2008, 07:09 PM
If you were advising someone who was just thinking of starting a new business what sort of business would you advise them to start? A service business? A business that manufactures a product? Why would you give the advice you would give?

I'm interested in finding out what businesses people think would work in the economy we have right now.
First, make sure there's a need in the market. It may be a problem you've encountered or that friends keep commenting on.

Second, it helps if this problem relates to a field about which you know a reasonable amount and have some experience.

Third, ensure this is a field in which you can establish partnerships and solid contacts. You might need good suppliers or distributors or marketing channels.

Fourth, avoid anything that could be a temporary fad, is unduly seasonal in nature, is based on a very specific technology, or is too dependent on other products and services. The point is, what will happen if the fad ends or the technology becomes outdated?

Fifth, visualize how your business will grow. Beyond the initial product and service, what will you offer your target market? What other markets could you move into?

Then comes the real stuff. You need to understand your market and the need, your target market and how you'll reach them, your strategy and how you'll differentiate from the competition, your likely break-even and cash-flow numbers. The financials alone may rule out an opportunity because it's beyond your capacity to invest.

orion_joel
10-09-2008, 10:21 PM
Bill - The biggest problem that i have with business technology services is that the market is growing but there is always this constant supply of people willing to offer the services cheaper and cheaper. So while some companies realize the value of paying for what they get. There are the others that tend to spend all the time trying to save where they can till it get to a point where it is almost cheaper for them to just start all over.

Cornish Steve - some great points there.

BillR
10-10-2008, 02:31 PM
Bill - The biggest problem that i have with business technology services is that the market is growing but there is always this constant supply of people willing to offer the services cheaper and cheaper. So while some companies realize the value of paying for what they get. There are the others that tend to spend all the time trying to save where they can till it get to a point where it is almost cheaper for them to just start all over.



This is true. This is also why I do NOT work with small companies as customers at this point in time. From my perspective any time you are competing on price for a customer we have already lost because we have not distinguished ourselves enough from the "Cheap" guys.

orion_joel
10-10-2008, 08:58 PM
I totally agree Bill, to compete on price is always a lose for us. However the problem that i find is that there are more and more people coming along that are willing to do more and more for less.

The reason it becomes such a problem is that i think the way that people go about it is all wrong. People come along getting started after someone has mentioned there is money in IT, they decide to sell there time cheap to get started, and of course gets them plenty of business, because they are cheap, but then when they try to raise prices they start losing customers so they go back and stick to their lower prices and the industry takes another hit.

Dan Furman
10-11-2008, 02:11 PM
I totally agree Bill, to compete on price is always a lose for us. However the problem that i find is that there are more and more people coming along that are willing to do more and more for less.

The reason it becomes such a problem is that i think the way that people go about it is all wrong. People come along getting started after someone has mentioned there is money in IT, they decide to sell there time cheap to get started, and of course gets them plenty of business, because they are cheap, but then when they try to raise prices they start losing customers so they go back and stick to their lower prices and the industry takes another hit.

The problem is also within how you present your service, though. If (for example, using Orion's industry here) a company is presenting itself no differently than the other IT firms out there, well, why NOT go for the lowest price?

I always try to take a different approach - I essentially try and make it so nobody can compete with me. I really don't sell copywriting - I sell MY writing. It's all over my website, and it's definitely in my demeanor. I'm slowly positioning myself as more of a brand than a copywriter. If you want MY writing, you have to hire ME. Nobody else will do.

Now, of course, some people won't see it that way - some will always say "thanks, but XXXX will do it for less". I'll never fully get rid of that, but I'm working on weeding that person out - I just keep tweaking the way I present myself, trying to make myself more of a brand than a commodity.

I admit this is easier for some businesses than it is others. Although I did know a local IT firm that started off with a (paid... generally $100) assessment of your needs - they would not do business with anyone without doing this service first. It turned off some people, but others really viewed it as a professional, reasoned approach, akin to "look, we're going to truly give you the service that fits YOU best" - they were pretty successful (I speak in the past tense because the owner eventually got made an offer he couldn't refuse from a large company). I thought that was a pretty neat idea.

greenoak
10-11-2008, 10:59 PM
i think there is a deep desire for american made product..in the gift industry anyway.....
its an interesting question but really i would think a person with any chance of making a business would need to have some idea of their own ...

orion_joel
10-12-2008, 03:08 AM
Ann, i agree almost whatever country that you are in there is a desire for buying locally made products. For Australia it is no different people like locally made products, however there is still controversy, between a locally made and owned product, to a locally made but overseas ownership.

Dan, i do totally see where you are coming from here, and agree if you just put out the same we fix computer's stuff as everyone else, then of course why not charge a low price. The problem stems from this being a very common approach and very many people seeing these types of things and then struggling to differentiate between them. Of course i understand it is then our job to show the difference, it is doing it in a way that is clear to everyone else that can cause a struggle.

llcollins82
10-15-2008, 02:59 PM
I would say a service business, because i am becoming increasingly aware of people paying money to get other people to do stuff for them.

Or is that just me that some people are lazy?

KristineS
10-15-2008, 04:48 PM
I would say a service business, because i am becoming increasingly aware of people paying money to get other people to do stuff for them.



I think you're right, there is a rise in people paying others to do tasks for them. A lot of people are experiencing a lot more demands on their time. If they can eliminate tasks by paying someone else to do them, that makes sense. It comes down to the value of your time. If you're making enough money, it makes better sense to pay someone to clean the house or walk the dog than it does to do it yourself.

I know of at least one person who started an errand running business and did quite well. People were willing to pay for the convenience of having a responsible, reputable person run their errands.

orion_joel
10-16-2008, 01:45 AM
I think that there is always a good market for services as you mention Kristine, as long as you pick the right area for your market. Also that it is sustainable in the area that you are in. Pretty much it really comes back to doing your research and knowing your market.

This doesn't mean that any business cannot be made to work wherever, however it does mean that knowing somethings before you start can make it a lot easier for you.