The main reason that some people take opportunities when they arise, and others do not, is that some people are ready.
They have their business plan ready and all they need to do is take advantage of the opportunities.
Where can you find the right business plan?
If your business is based in the United States - click here
If your business is based in the U.K. - click here
Ideas To Action.
Part 2 - Types of Opportunities
The Federal Trade Commission describes the most common types of business opportunity ventures as follows:
- Distributorship which is where an independent agent has entered into an agreement to offer and sell the product of another but is not entitled to use the manufacturer's trade name as part of its trade name.
- A rack jobber that involves the selling of another company's products through a distribution system of racks in a variety of stores that are serviced by the rack jobber. Typically, the agent or buyer enters into an agreement with the parent company to market their goods to various stores by means of strategically located store racks.
- Vending machine routes which are very similar to rack jobbing. The investment is usually greater for this type of business opportunity venture since the businessperson must buy the machines, as well as the merchandise being vended, but here the situation is reversed in terms of the pay procedure. The vending machine operator must pay the location owner a percentage based on sales.
In addition to the three types of business opportunities listed above, there are four other categories you should be aware of:
- Dealer. Similar to a distributor but while a distributor may sell to a number of dealers; a dealer will usually sell only to a retailer or the consumer.
- Trademark / product licenses. Under this type of arrangement, the licensee obtains the right to use the seller's trade name as well as specific methods, equipment, technology or products. Use of the trade name is purely optional.
- Network marketing. This is a generic term that covers the realm of direct sales and multilevel marketing. As a network marketing agent, you would sell products through your own network of friends, neighbors, co-workers and so on. In some instances, you may gain additional commissions by recruiting other agents.
- Cooperatives. This business is similar to a licensee arrangement in which an existing business, such as a hotel or hardware store, can affiliate with a larger network of similar businesses, often for the sole purpose of advertising and promoting through a common identity.
Types of Business Opportunities
There are three essential criteria for judging the success of any business:
- The company has suitable goods that are wanted by purchasers in the current market.
- The organization is focusing on a niche section of the overall market and its promotions, advertising, and goods and services provide the same message.
- The venture can exist utilizing its own cash-flow and has a structure in place to make sure this will carry on.
Doing any single one of these three will never generate a profit; even any two will eventually mean a decline in the venture. The company must be structured so that it systematically converts customer demand into cash. Successful business owners concentrate on getting in the correct position at the correct time whilst unsuccessful owners look on resentfully, wishing they will eventually have the same good fortune - but they never will.
In order that your new venture is in a position to succeed you must have merchandise that offer distinct benefits to likely buyers and your advertising needs to concentrate on promoting these. It is crucial that you are completely aware of what your possible customers are demanding, that they may not be picking up in the present market.
The huge majority of new ventures are not in a position to take advantage of being in the proper position at the proper time as they did not do any market research and far too many are already bound to be in the incorrect place at the incorrect time. These unprofitable companies frequently have, and need, far more funding than profitable companies, and they are customarily constricted by their cash flow with all of their resources pointed in the wrong way. These organizations have:
- A backlog of inventory that they could never probably sell in a massive number of unconnected product groups.
- Substantial numbers of smaller purchases from an overblown inventory, causing the company to require more staff that it can afford to have.
- A lot of cash that is bound up in sections of the organization that are standing still.
You should focus on market research to gather the lowdown about your niche markets and buyers. Market research is a critical component in sustaining your competitive advantage and your awareness about what your competitors are up to:
- What is your appropriate product market comprising all those products and / or services that are looked upon as compatible or substitutable by customers, in relation to the products traits, asking prices and their planned use?
- An appropriate geographical market consisting of the localities within which the organization that will be involved in the supply of goods and in which the conditions of competition are similar.
It is essential that you have the financing of your small business correct before you open:
- How would your organization function if you had no outside borrowings?
- Is your accounting and reporting meticulous? If not, then you might soon find out how vital it is that it should be.
- Have you painstakingly thought-through every item of expenditure and how spending the cash helps your company?
- Never buy anything at all for new if you can purchase a second-hand item considerably cheaper.
- Make sure that you conserve your cash and try and keep your spending as small as you can in everything you are doing.
Hold on to your money. Money is the essence of any business.
Profitable businesses are run by smart owners that seize opportunities - because they are always ready.
The key to succeeding with your business is to be ready when opportunities arise.
And when they do to turn them into money, within a structured, focused organization.
Ideas To Action - next
A Great Business did not just happen - It was planned that way.