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What Type Of Business Do You Want To Open?

Man drawing a light bulbSo, you’ve decided you want to open a business? Have you given any thought to the type of business you want to open? Deciding what type of business you’re going to open is a key first step in the process of going into business. Everything you do will flow from the type of business you decide on opening.

There are a variety of business types available to the entrepreneur that present somewhat unique opportunities. It only makes sense to decide on opening a “business type” that presents opportunities for growth, profitability, and success. For example, why open a business type in an environment that is overly saturated the market already?

The following business types are recommended for consideration because of the associated unique opportunities they possess.

Green Business

Business Dictionary defines a “Green Business” as the following:

A Green business is a business functioning in a capacity where no negative impact is made on the local or global environment, the community, or the economy. A green business will also engage in forward-thinking policies for environmental concerns and policies affecting human rights.

Implementing sustainable (green) business practices may have an effect on profits and a firm's financial “bottom line.” At first blush, this challenge might make many corporate executives cringe. However, during a time where environmental awareness is popular, green strategies are likely to be embraced by employees, consumers, and other stakeholders. In fact, according to many studies, a positive correlation exists between environmental performance and economic performance.

People With Disabilities

As noted by Shoretel.com, there are more opportunities than ever for individuals with disabilities to start their own businesses. Those who are deaf, blind, paralyzed or dealing with intellectual disabilities can reach out to government programs, support nonprofits and organizations, scholarship and grant foundations and more. These programs boost the likelihood of success, and give people with a disability and a plan the start they need.

Women-Owned Businesses

The following information is taken from the 2016 State of Women-Owned Businesses Report:

  • There are now 11.3 million women-owned businesses in the U.S., employing nearly 9 million people and generating over $1.6 trillion in revenues;
  • Women-owned businesses now comprise 38% of the business population, employ 8% of the country’s private sector workforce and contribute 4% of the nation’s business revenues; and
  • Since 2007, there have been 1,072 net new women-owned firms launched each and every day.
  • Between 2007 and 2016, while the total number of firms increased by 9%, the number of women-owned firms increased by 45% – meaning that over this period the number of women-owned firms grew at a rate fully five times the national average;
  • Who are entering the ranks of women business owners at a fast clip? Women of color; their numbers have more than doubled since 2007, to nearly 5 million. They comprise fully 44% of all women-owned firms.

Franchise Businesses

franchise provides the entrepreneur with the opportunity to be the boss without taking on the risk of starting his or her business from scratch. A franchise is a business model that involves one business owner licensing trademarks and methods to an independent entrepreneur.

For example, under “Product/trade name franchising”, the franchisor owns the right to the name or trademark and sells that right to a franchisee. Under “Business format franchising” the Franchisor and franchisee have an ongoing relationship, and the franchisor often provides a full range of services, including site selection, training, product supply, marketing plans and even assistance in obtaining financing.

Home-Based Businesses

An academic report from the University of Maine notes how, for more and more people, home is not only where the family is, it is where the business is. In recent decades, large numbers of people have chosen to market their skills and talents from home.

In fact, as many as 20 percent of new small business enterprises are operated out of the home. Many home-based businesses are started on a part-time basis and then expand into full-time businesses as the market for the business develops and grows.

In addition, the majority of home-based businesses are started by women and typically employ other family members.

As the report notes:

  • Advantages Of Operating A Home Based Businesses
    • Can start as a part-time business.
    • More flexible lifestyle and more integrated with the family.
    • Lower start-up and operating costs.
    • Cost-savings on child/adult care.
    • No commuting.
    • Flexible work hours.
    • Satisfaction of being own boss.
    • Increased tax benefits and write-offs.
    • Employment of family members by the business.
  • Disadvantages Of Operating A Home Based Businesses
    • Space may be cramped, limiting growth potential and family use.
    • Personal and family lifestyle patterns may be disturbed.
    • Business and family privacy may be disrupted.
    • Long work hours and time away from family.
    • Lack of fringe benefits.
    • Lack of informal social contacts or opportunities to network.
    • Stress due to inability to balance family and business needs.
    • Family members and friends may demand more of you when you’re home all day.
    • Business activities may cause problems with neighbors.
    • Discipline is required to establish steady, homework patterns.

An entrepreneur has a lot to consider when trying to decide on the type of business he or she wants to open. It’s an imperfect world and there are usually disadvantages for every advantage. Frequently, however, the final decision simply comes down to the personality of the entrepreneur.

Do you have the support you need to manage your small business bookkeeping? Schedule a 30-minute appointment to speak with a local small business adviser.

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