When you embark on starting a business, you'll need to decide if you'll be a service-based business or a product-based business (or both). We're going to share some of the pros and cons of each to enable you to make decisions that need to be made. You can run both types of businesses together as well; in fact, this is becoming more an more popular as digital products and courses that complement products are so easy to create.
Both business options offer many pros. Pros like owning your own business, being your own boss, making money from home, doing what you love, serving people you like, and having more freedom to spend with family and friends.
But, how do you know whether or not you should start a service-based business or a product-based business?
The components of a service-based business are:
* You and your skills
Let’s look at the components of a product-based business:
* A product
* You and your skills
Not much different, really. You are in the equation for both - whether you are selling products or services. Both will require sales and marketing and the ability to deliver the service or product on time. Both may require a certain amount of technology and knowledge. In both cases you can outsource a certain portion of the work so that you can reduce your efforts.
Remember, when you outsource, in some ways you are really paying to increase the time you have to devote to a project. If you think of it that way, you’ll be able to outsource more efficiently. You won’t feel like you’re outsourcing because you can’t do it yourself; you’re doing it because you need more time. When you can strategically use other people’s time and skills, you can better your business.
With a product-based business you can typically get someone else to make the product and someone else to do the customer service. Technology will automate the delivery process, and you can simply oversee it and collect the revenue. Thus, you can essentially earn unlimited money outside of the hours it takes to produce them.
With a service-based business you will be required, for the most part, to speak directly to the clients and deliver your service on their deadline. You’ll be trading hours for dollars in many respects. So, in addition to the time factor involved with sales and marketing, and the upkeep of your business, your income will be limited to the number of billable hours you can work on any given day. This can be increased through outsourcing, but you will still need to be intimately involved with the results, which will take your time.
No matter what type of business you choose, one thing remains the same. The need for bookkeeping. If you're embarking on a new adventure and want to make sure your finances are in tip-top shape and need to see where to better allocated your profits, give us a call and let's chat about being your bookkeeping service.