What Business Model Is Right for You?
So, you want to start your own business. Which model will you choose?
Think low overhead, without the need for a brick-and-mortar location. You also gain, at least potentially, a worldwide customer base. But shoppers who want to actually experience your product are probably out of luck; there are card fraud issues and security problems, and you miss out on people who either don’t “get” computers or simply hate shopping on them.
For newbies, a franchise has the advantage of providing plenty of support services. You’re in business for yourself, but not by yourself. Your brand is probably well-known, and your purchasing power (pooled with other locations) is far better than if you were on your own. But there are plenty of rules and restrictions on how you operate, and it can be expensive to get started.
This is a smart choice if you want to ease into starting a business, because you can work at night or on weekends. It’s a low-risk way to find out if you like sales, especially one-on-one (80 percent of direct sales happen that way). Network marketing may look like a way to get rich quick, but it’s not really a shortcut. People who do well are very committed to their products, don’t give up easily and are talented at recruiting others into their sales organizations.
Independent contractors, or consultants, can do very well—usually making 20 to 40 percent more per hour than employees for the same job, The Wall Street Journal reports. Successful consultants are usually experts in their field and well-known to potential employers. The disadvantages include job insecurity, no health or other benefits, and slow (or no) payment from the companies that hired you.
You can work around demanding kids’ schedules and keep all the money you earn (it helps if you have accounting skills) except Uncle Sam’s cut. Eliminating the commute saves money and adds work time. But if you’re not self-disciplined, this is not the best choice. Some people get lonely working from a basement office, it’s harder to know when to call it quits for the day, and you lose the home-as-sanctuary advantage.
Now, find out what 5 ingredients are vital to every startup's success.
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