You have made the choice that you want to be your own boss. You will now begin on starting your own business. How will you get there? Where do I begin? More than 50% of all businesses fail because they don’t know how or where to start. So to help you out, if you’re brand new to the business world, or you just need a little kick, Here we will discuss some questions that will get you on a move to creating your business.
Question #1 – What Type of Business Do I Want?
Whether it’s a service or product, or even information, this is a world where business’ exist, and people are always selling something. According to the Western Family Dictionary, a Business is stated as a “Purchase and sale of goods in an attempt to make a profit.” There are two major types of Business’ that I will be talking about. The first one is Retail and the second one is Service.
Retail Business’ are simply put as buy and sell. You buy products from suppliers at a Cost price and you sell the product at a Retail price. After you have sold the product, the difference from the retail price and the cost price is your profit. The money that you earned from selling the product that you bought. Sounds pretty simple right? Here’s some simple math that will help you understand.
(Price I sold the product) – (Price I bought the product) = Profit!!
Obviously you want the price you sell the product to be higher than the price you bought it for or else you will lose money.
An excellent example of traditional retail is the trend of the 70s, the Pet Rock. The Cost of the rock was very very low. Actually cents worth being able to just go down to the beach or anywhere and pick up a rock. After all the expenses with shipping and distributing. The Retail price of the rock easily made a profit.
Service is very similar to retail however there are a few minor differences. When you sell a service, it is a skill that you have developed and you trade your knowledge and skill for profit. Think of the service that you are offering as the product.
“Sell a man a fish he will eat a day. Teach a man to fish and he will eat a lifetime”-Chinese Proverb
You are the person that has learned to fish and and is selling it for a price. And that price is profit.