Choosing the Right Business Model for Your Startup
There are many ways to set up a business model, and more are developed every day
with the growth of the world wide web. The classic brick-and-mortar storefronts,
pure service ventures, and manufacturing and warehouse models still exist, but have
been expanded from their classic versions to remain competitive in today's environment.
In addition, purely web-based businesses and incorporating internet opportunities
into the classic models have been added to the mix. These various distribution channels
serve to both multiply the startup opportunities and increase competition for consumer
spending.
With so many options available for how you set up your business, it is critical to
consider which alternative best fits both your personality and your business idea.
If you are looking forward to working with the public and doing something different
every day, a purely online business is probably not for you. If you are eager to
work independently with few distractions, and you prefer to be in an office in front
of the computer most of the time, a brick-and-mortar store is probably not for you.
Be realistic about the environment that motivates you to do your best work. Brainstorm
the different ways that your business idea can be developed to be successful in that
environment.
Different business models require different resources to successfully launch. A brick-and-mortar
store or manufacturing operation requires significant startup capital to cover the
lease costs, furniture, fixtures and equipment (FF&E) expenses, staff to cover the
open hours, and inventory. A purely online retail business requires more time than
capital -- it can take months to show up on the top search engines, especially if
your business's key words include significant direct or indirect competition. The
actual expenses can be kept fairly minimal, as you can use dropship distributors
so that you carry no or very little inventory or you can use a just-in-time inventory
system to keep your costs down. You can run the business from home so that your overhead
expenses are kept low as well. If you have a good idea of the resources you will
have to launch your startup, develop a business model for your startup that is within
those means.
Whatever your basic business idea, there are likely a number of business models that
could be effective for launching and growing your venture. Ultimately, it is best
to diversify both in product and distribution channel, and those future expansions
should be in mind when determining where to start. For example, if your goal is to
own a chain of pet supply and training stores but you don't have the funding to open
even one storefront, consider starting out with a limited online retail store. Add
self-published how-to books for training and animal care and perhaps a local in-home
training service. Build a reputation as an expert by submitting good articles to
websites and print magazines that draw your target customers. Consider adding seminars
on related topics for other trainers or pet owners. Over time, you will increase
your revenues to the point that leasing space is within the budget, and you will
have multiple income streams up and running before your overhead becomes a major
factor.
The business model you choose is not the primary factor in whether your business
succeeds. Many business ideas can be modified to fit different methods of distribution,
as long as the benefit to the customer is convincing. Selecting a business model
that doesn't fit your personality is set up for failure because you will lose your
motivation and desire to keep pushing through. Every venture requires dedication
and perseverance to succeed, so you have to enjoy at least the method enough to keep
you focused on building the business.
About the Author
LaunchX.com is dedicated to training entrepreneurs to turn their good ideas into
great companies. The LaunchX System provides step-by-step education in the mindset
and skill set entrepreneurs need to succeed. Our program includes intensive seminar
training, key business software, and specialized workbooks that teach you the fundamental
skills you need to achieve your financial and worklife goals through entrepreneurship.
Register today for our introductory course and see what LaunchX can do for you!
Contents copyright © 2009-2011 by LaunchX LLC. Permission granted to reprint this
article in its entirety provided that the “About the Author” section and all hyperlinks
are included.
