101 Small business opportunity
Make better decisions and improve your personal finances
This article is called 101 small business opportunity because we thought you have to know and understand what opportunities there are for small businesses' owners or aspiring owners. We'd like to share with you our point of view.
If you're new here in the site, please take note this article is part of a section dedicated to learn about how to make extra money as a first action step to improve your personal finances.
For your own benefit, we encourage you to read this article and if you need more information, go to the main page of this section to follow the sequence of articles. You can use the links at the bottom. Thanks and enjoy!
Also, we would like to demystify with specific examples that the internet isn't (by itself) a magic money making machine. Instead you should see it as a tool. Let's review some examples:
- Selling hard goods or services
- Auction Sellers
- Dropshipping wholesale
- Network marketing or Multilevel marketing (MLM)
- Additional small business models
101 Small business opportunity N° 1 - Selling hard goods or services
In our last article we saw that the most basic business models are to sell a product or a service for a profit. Additionally we learned how the internet (when is well used) can help you boost your sales. If you want you can review it here.
101 small business opportunity - lesson N° 1 - Even the most basic business models can use the internet to being improved.
Ok, let's move to another business models...
101 Small business opportunity N° 2 - Auction sellers
The process is simple: if you have a good or someone else's product you have to open an auction (with a minimum price, limits, length of time to place a bid, etc.) wait until the auction is closed, sell it to the higher bid (if there are bids), collect the money, ship the product and give feedback to your counterpart.
Although this model isn't new at all, the internet has made possible for individuals and small businesses to take advantage of it. The most important auction sites are: eBay and Mercado Libre.
As I always say: any business model can't ignore the economic and commercial laws and this is not the exception. In order to be successful in this model, you have to research what the users of eBay or Mercado Libre are looking for, how many competition there are, how you'll market your auction, process payments, ship orders, etc. etc.
Of course there are lot of companies and software created to help you succeed in this model, many of them created by the auction sites too. Regardless that, you'll have to think in terms of cost-benefit to make a good decision.
For instance, if you'll have to buy a software or subscribe to a service to research the market for $25 a month and you expect a profit of $5 for each product sold, then you'll have to sell at least 5 products just to cover your subscription, otherwise you're losing money.
One of the main cons to use this model is that you become highly dependent from the traffic these sites brings you and therefore you have to strictly follow their rules. These aspects detract independence to your business.
Fortunately if you use the SBI! methodology named: C-T-P-M you can reverse this situation and make the auction sites work for you instead of the other way.
Let's read this testimonial from a successful auction seller:
"... eBay sends me traffic and when I send them traffic they pay me as an affiliate for doing it. To say the least, my business has grown and prospered since I stopped working for eBay and started using SBI! to grow something that is truly mine."
~ Amy Dykens
You can read and learn from her experience here. You can also read a more comprehensive explanation about how to use the internet and auctions together to build your business.
Considering auctions are very important nowadays, SiteSell (the company behind SBI!) has developed a complete guide to help you to take the most advantage of the internet to make your auction business succeed: Make Your Net Auction Sell! The Masters Course.
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101 small business opportunity - lesson N° 2 - Don't get distracted by the "innovative ways" to make money, instead stick to the basic principles of any business: demand, supply, product, price, promotion, place, etc.
101 small business opportunity - lesson N° 3 - Think in your business as an entity that has better odds to succeed if it's reasonably independent.
101 Small business opportunity N° 3 - Dropshipping wholesale
Years ago when I was beginning my research to find out the right business opportunity for me I found many websites that presented dropshipping wholesale as a new business model.
As a newbie, I though this was the Holy Grail to start a business, fortunately I began to research and learn about it and I found this is not a business model, is just a good way to optimize inventory and shipments.
The dropshipping wholesale model is not something else that a company who has products in big quantities and where you can open an account to place orders. Once you make a sale (through your auction, website, etc.) the wholesaler takes charge of the shipment to your costumer and charges you a fee. This way you don't have to invest in inventory or manage shipments. A very good deal indeed.
If you're planning to sell hard goods this is a service you have to consider. The problem you'll probably find is how to find legitimate wholesale dropshippers . I say legitimate because there are lots of wholesaler agents or companies that are just middlemen between you and the real wholesaler and make you pay higher fees for "their service" in order to make a profit.
As part of my first business ideas I subscribed to a company's service who is dedicated to find legitimate wholesalers and include them in the software. Additionally this software helps you to research the market. You can access this business tool for a unique lifetime subscription. If you want to learn more, about dropshipping wholesale and this tool, watch this free Video Course about Product sourcing.
101 small business opportunity - lesson N° 4 - Do your homework, research how things work, ask questions, be reasonably skeptical.
101 Small business opportunity N° 4 - Franchises
This is a genuine business model. The idea here is that a company has standardized its business processes to the point that if anyone else follows the instructions, they can achieve the same level of success. That company is called franchisor and can give you (franchisee) permission (franchise) to market its products and use its know how. Of course they charge you some fees for that permission.
As you know, a business has many angles that have to be considered, planned and well covered in order to succeed (marketing, operations, logistic, etc.) The franchise helps you with that work since it has already standardized those processes.
Of course before to think in processes and more details you'll have to research the market to conclude that the product or service the franchise sells will be well received by the market.
On the other hand, buying a franchise is usually expensive since much of the risk has been minimized. Also, you have to be able to follow instructions in order to succeed. Classic examples of franchises are: Mc Donalds, Starbucks, etc.
101 small business opportunity - lesson N° 5 - Some business models are easier to manage than others but everything comes at cost.
101 Small business opportunity N° 5 - Network marketing or Multilevel marketing (MLM)
This business model is one of the most interesting models I tried and researched. The idea is that you have to sell a product and convince others to sell it too. That way you earn commissions for your own sales and from the sales made by the people who you referred. Simple, right?
Of course, there are some "ifs" to earn commissions. You'll have to understand the compensation plan of each MLM company; that is no other thing a list of levels you have to reach (based on your own and your team's sales) in order to be able to earn a specific percentage of commission.
This industry has received a bad reputation due to pyramidal schemes in the past but MLM is a legitimate way for an individual to start a small business.
Also, MLM has received a bad reputation due to its marketing techniques that are based on some wrong premises like: anybody is a potential customer and you have to talk about your "opportunity" to any human being in the world. Or MLM is not about sales is about share products; etc.
Fortunately if you change your way of thinking (keeping apart the MLM spirit for a moment) you'll see that is possible to make a successful business using the MLM, not MLM using you. Even better you can boost this business model with the power of the internet. Read this testimonial:
"I treat network marketing like a "real" business. You cannot thrive on a system that requires enrolling only eight customers, all of whom are family and friends. As I watch my traffic, leads, retail sales and enrollments increase, I am convinced that there is no better way to build a network marketing lead generation source that brings in the kind of quality leads you would pay a fortune for anywhere else."
~ James Beane
You can read and learn from his experience here. You can also read a more comprehensive explanation about how to use the internet and MLM together to build your business.
101 small business opportunity - lesson N° 6 - The idea about how to make money is not the business itself is just a part.
101 small business opportunity - lesson N° 7 - If you think carefully every business is about sales.
101 Small business opportunity N° 6 - Additional small business models
In this article we explained you some business opportunities you can use and how they can be improved by the internet.
Therefore we have demonstrated you that neither the internet nor MLM nor auction selling is a business by itself. A business is a bigger and more complex concept. The good news is that you can use the internet to simplify it.
We can't talk about all the business opportunities here but you can find additional business opportunities and how the internet can improve them by clicking here.
Now let's back to the main page of this section to learn more about how to make extra money as a first step to improve your personal finances. Just use the links below:
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