Selecting Your Business Model

Once you’ve determined the type of business you want to start, it is time to start considering your business model options.

In today's marketplace there are many business models available to entrepreneurs. I highly suggest starting with one model and once you have your footing you can evaluate growing your business into one or more of the other sales avenues.

Some of todays business models are:

Home-based

Thanks to our electronic advances, you can easily create a legitimate and competitive business from home. Nearly half of all businesses in the United States are being run from home and that number is growing each year. These businesses are both full and part-time endeavors and may or may not be web-based businesses.

The upside of a home based business is that it has much lower start-up costs and is easily scaleable to your time and financial inputs. You can work a home-based business around family requirements or an existing day job. With the growth of the outsourcing community, you can easily contract with other businesses to do web-design, public relations, keep the books, or even do the manufacturing.

The downside of a home based business are that you are restricted by local zoning ordinances (they won't let your run a factory in your home) - you will need to check with your local government center for your communitities specific restrictuions. Working at home has its own set of challenges and you can easily be distracted by other domestic activities. You should also consider if you want to have customers visit your home.

Brick-and-mortar

The classic business model is the brick-and-mortar business that involves a physical location outside of the home. This type of model has a dedicated facility from which you will operate the business.

There are many upsides to the brick-and-mortar model. You can easily work face-to-face with people and become a part of the local business community. A specific location allows you to benefit from walk-in trafic depending on the type of your business. Many customers still don't trust the web-based retailers and will only shop at brick-and-mortar retail shops. You have the benefit of a space dedicated soley to business allowing for a separation of work and homelife.

The downsie is the increased risks and start-up costs. You will need to establish a location, enter into a lease or purchase, and customize the location to fit your needs. You will typically need to hire additional staff and keep set business hours. In a retail business, you will need to build inventory and develop relationships with suppliers.

e-Commerce

One of the fastest growing models is the e-commerce business model. With this model, you sell products to consumers via a website.

The biggest upside is that an e-commerce business has much lower cost and less risk associated with start-up than a traditional brick-and-mortar business. Typically an e-commerce business requires minimum personnel, inventory, and faciclities. It is very easy to scale an e-commerce business to fit your lifestyle and commitments. The schedule is flexible and adaptable. The biggest difference this model has to a basic home-based business is that you can market your goods to a much broader market and is not fixed to your location as customers are reached via the internet.

The downside is that an e-commerce business can be overwhelming if you don't set up an organized system from the start as you will need to handle shipping, inventory management, customer service, and order processing with limited resources. There is also a lot of competition on the internet and it can be difficult to generate traffic to your website and then convert those viewers to become customers.

eBay

A relatively new business model is a sub-category of e-commerce, an ebay store. An ebay store is a great alternative to start your business.

There are many upsides to using an ebay store to get started. Ebay has a number of tools that can help you get your business off the ground - paypal to accept electronic payment, established customer base, ready to use online templates. The cost is minimal - typically just inventory and sellers fees will get you going. It is easily scalable and you can list as much or as little as you can handle efficiently.

The downside is that due to its vast size, there is a lot of competition. You will need to stay on top of your transactions to compete with well established sellers with strong feedback rating and established customer bases.