Business Concept and Idea Development
Business Concept and Idea Development
In order to market your product or service, you will want to be very clear about what it is that your business actually does or has to offer. You should be able to quickly and accurately describe your business concept in just a few sentences.
You will probably have to rewrite and refine your starting idea several times as you gather more information about your business idea.
As a businessperson, you want customers who are happy with your product or service. You want them to keep coming back to you with their needs or problems.
What are the ways of going onto business?
There are three ways someone can get into his/her own business:
1. Buy an existing business e.g. TBL bought by INDOR of South Africa
2. Purchase the rights for a franchise e.g. Coca-Cola and PepsiCo companies
3. Plan and start your own venture.
Buying an existing business
Independent business are bought and sold on a regular basis. You may find out about pending sale of a business through real estate agents, an accountant, a lawyer, a banker manager or the current owner of the company.
If you chose this option of getting into your own business, you will need cash to invest. You will also need the guidance of an accountant and lawyer to help you prepare the initial offer to purchase and assist you with the negotiations.
Purchase the rights for a franchise.
The franchise option is very popular and becoming more and more popular every day, even in industries that one would not think of!
While a franchise has a higher than average rate of success when compared with independent businesses, the down side is that most franchises require a substantial initial cash investment together with some type of ongoing royalty fee. Further, there is often not the flexibility to do things “your own way” once you sign the franchise agreement.
Plan and start your own venture
Perhaps the most appealing to the entrepreneur is the opportunity to start your own venture! This option, while allowing the greatest flexibility, requires diligent planning and commitment on behalf of the entrepreneur. As in the previous two options, the entrepreneur should seek professional help and guidance, on as needed basis.
Type of businesses someone could start
There are three types of businesses someone can enter. These are:
1. Retail/Wholesale distribution
With any distribution business, whether it is wholesale or retail, you are in business of buying finished products from manufacturers and selling these to purchasers. In the case of retail, you may need a store or shop for customers to come to.
Wholesale distribution might require a showroom for viewing products as well as sending catalogues and flyers to customers with shipments made from a storage warehouse.
This type of business involves the actual creation of a finished product from raw materials or semi-processed materials. Whether it is considered manufacturing or assembly depends on the degree and amount of the raw materials used. For example, if all the materials used are themselves finished components, we would refer to the activity as assembly. On the other hand, if the materials to be used were in a raw or unfinished state the activity would be called manufacturing. Even a small handcraft business such as quilt making, pottery, or knitting may be considered as small manufacturing or assembly businesses. TAMCO Kibaha is a good example of an assembly company.
A service business does not make a product or distribute a product. Its focus is the business owner who usually has some skills or ability that customers are willing to pay for. In exchange for a fee, the individual provides the service.
Examples of service businesses include auto repairs, landscaping, consulting and personal care businesses. Typically, a service business requires a small amount of capital.
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