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10 Steps to Open for Business

Step 2: Choosing a Business Model

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Thanks to technology, there are more business models to choose from than ever before. Today you can start a business part-time or full-time, at home, online or in a brick-and-mortar commercial location!

The key is to choose a business model that fits your Life Plan. This will ensure that you spend the right number of hours each week, take the right level of risk (some models involve more risk than others), are practical in terms of your financial wherewithal, and gain the kind of satisfaction and success you're after.

First off, you have to make a key choice: How much time do you want to devote to your business?

When you go for a full-time business model, you leave behind whatever you were doing previously to commit yourself completely to your startup. When you make this leap, expect to spend more hours working than you ever did working for someone else.

Alternatively, you can start up a business part-time. With this model, you adapt your business to time-consuming obligations you already have, such as your day job, parenting responsibilities or any other activities that would keep you from making your startup your primary focus.

Once you’ve determined whether you see yourself as a part-time or full-time entrepreneur, consider our list of business model options.

  1. Home-based
  2. Brick-and-mortar
  3. e-Commerce
  4. eBay
  5. Franchising
  6. Licensing your product
  7. Multi-level marketing

Business Model Options

Home-based Business

Drawing upon technology, you can create a legitimate and competitive business from home. It’s part of our culture now, accounting for more than half of all businesses. Home-based businesses can be run full-time or part-time, and may or may not be web-based.

Upside

  • Less risk and lower startup costs - allows you to test the entrepreneurial waters without having to spend money on real estate and staff.
  • Easily scaleable - you can make your home-based business as big or small as you’d like to suit existing commitments, such as parenthood and a day job.
  • Outsourcing - a great strategy to keep things simple at home. You can contract with other companies to do your public relations, warehousing, shipping, website management, even manufacturing.

Downside

  • Shipping activities and customer traffic at residential properties are restricted by local zoning ordinances (check with your local government for details).
  • Working at home can come with lots of distractions and can infringe on your other domestic commitments.
  • If foot traffic is necessary in your business, your home may not make the desired impression on customers.

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Comments

It's a great idea to check your business model before you start your business, but how do you modify it once you have started? All business models fail over time. Many examples at http://businessmodelinstitute.com

This is a good list of business models but there are many more. Test the quality of your business model at http://businessmodelevaluator.com

Make a list of your friends and business contacts, everyone you can think of. Some may spark an idea in you, they may be able to act as mentor or they may be able to bring something to the table that you lack. Never underestimate contacts. Abe

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