What Type Of Business Should You Start?

What Is A Business Model?

If you want to start your own business, one of the most important decisions is what type of business to start. You cannot move forward without this decision.

So what is a type of business or a business model?

Your business model is how your business will make money and the product or offering that people are paying you for.

A product is something offered for sale. It can be a good or service.
Goods are tangible items that can be used, stored, taken home or consumed.
A service is any benefit that one party can offer to another that does not result in the ownership of anything. It is often intangible as the service is the energy or work to create an outcome.

01 | Physical Goods

Physical goods are tangible, physical goods that you can hold or touch. Goods include things like clothing, household goods, food, furniture, stationery, art, jewellery, toys or handcrafts.

There are a number of things to consider with goods:

Production – You either make goods or purchase them from someone else and distribute them. If you make them yourself, there is time and materials cost. If you get someone else to make them, you save your time but must pay for materials and their labour.

Mass-production or one-off – Goods can be created as a one-off, such as a piece of fine art. Or, they can be designed once and then made repeatedly in mass production. Again, there is a cost of materials and the time to make each product. However, with mass production, there is an opportunity to use machinery and systems to speed up the process.

Sales – Goods can be sold online or offline with a physical shop presence. An online presence obviously has the potential to reach a much broader group of customers, but you need to store the product. A retail store relies on people knowing about the shop, coming to it, or passing by. However, people can see and try the product before buying it in a shop.

If you are going to choose a goods-based business, you need to consider how you source, make or obtain your goods, how and where you will store and sell them, and the potential costs and profit per item. Does it make sense to spend 10 hours on a painting you can only sell once for $200? Or, is there a way to reproduce it, even in a limited print of, say 10 or 20 copies at $50 or $100 each?

02 | Digital Goods

Digital goods can be sold wholly online, so you are not handling or distributing anything. They may include e-books, education programs, downloadable music or videos, ongoing digital subscriptions, software, mobile apps, or digital photos.

They are created once and then resold over and over.

03 | Services

Services are where a body of work or service is done for the client by another person and they are paid for it. They rely on a certain level of expertise and exchange of time and effort for money. They are often intangible as the service is the energy and the work required to create an outcome, not just the outcome itself.

There are three types of services:

Business services such as banking, human resources, web design, technology, public relations, marketing, legal representation, manufacturing and insurance.
Personal services such as dog washing, hairdresser, dentist, doctor, house cleaning, babysitting or food delivery.
Social services such as fire service, police, social work, education, foster care or animal welfare.

Services were traditionally provided face-to-face with your clients, such as a doctor, plumber or electrician. In these cases, the services require physical interaction with a person or object. Your plumber needs to come to your house to fix the pipes!!!

Now we now have more and more services that can be provided remotely or online, using email, zoom or other software for communication. As a services provider, we now have a global customer base to connect with.

If you are going to choose a service-based business, you need to consider the level of expertise and resources you have in that area. Is it something you can jump into straight away? Or do you need to gain more knowledge, qualifications or experience first?

It is totally fine if you do. Just be aware of this process before you jump into your own business.

04 | Information Services

In personal services, the client does not need to know anything about law, accounting, medicine or plumbing to get the job done. They are paying someone else for their skills and knowledge.

Information services are where we pay for information. We pay someone to share their expertise and knowledge so that we can learn and either apply the information or become an expert ourselves.

Information services include teaching, individual or group coaching, workshops, speaking, retreats, seminars or masterminds.

Information services can be provided face-to-face or online but require imparting knowledge, information and expertise and sometimes assisting the person in understanding or applying the knowledge and information practically.

More and more, people are seeking to learn new things that can now be found through information services and personal connections rather than just books.

Reseller Of Goods Or Services

In addition to these major types of business, there are a couple of other types of business that can sell physical or digital goods or personal or information services but in a different way.

A reseller is a business that sells prgoodsor services on behalf of someone else.

Network marketing – Depends on person-to-person sales by independent representatives. That is, you sell a physical or digital product on behalf of a company and get paid a commission based only on what you sell.
Affiliate marketing – A business rewards you for each customer you bring to its website.
Subscription or membership – A good or service is sold and renewed on a regular basis. Examples include software or streaming subscriptions or club memberships where you receive certain monthly products.

Multiple Business Types

You can create a business that combines multiple business types.

For example, an information services business such as home gardening might package its content into digital goods such as courses and ebooks.

Or, an artist might sell physical goods as paintings and then evolve to include information services such as art classes or digital goods such as online courses or downloadable prints.

However, you want to start with one primary business type and focus on that while still knowing that you might expand later.

So… What Type Of Business Should You Start?

These are all proven business models that we know work. You can choose to go create something different but you are going to spend a lot of time and effort testing and refining. So why not go with a proven model?

So how do you choose?

Start with choosing a goods or service-based business. What do you want to sell?

If you choose goods, do you want to sell physical or digital goods?
If you choose services, do you want to sell personal services and do the work, or information services and teach or help other people to do the work?

But what criteria do you use to choose? Well, you can make the mistake I made multiple times and choose something you think is going to make you money. Or, you can choose something you are really going to love and enjoy.

Learn more… “How to Choose The Right Business For You”

One thing I tried was network marketing and never got off the ground because I hated the sales process, and I realise now, I did not believe in the product. Nor do I enjoy the social aspect of networking. This business model was never going to work for me!!!

I built a reasonably successful ebay business reselling, which I still dip in and out of every now and again as a hobby. But I realised I did not want to spend my day photographing and listing products. Not all day, every day.

What I do now is provide information services. I love curating information and teaching about integrating personal development, spirituality and business. And I also create digital goods that align with this. It covers so many of my passions, skills, interests, values and my purpose.

In choosing a business, the best piece of advice is not to choose based on something you think will make you money.

Instead, we need to find something that we are going to love AND that will make us money.

The choice is yours…

…Liz Watt