I mentioned last week that one of the things a mom must consider when opening a business is whether she wants to run one that is service or product oriented. As I said in that post, there are also times a business may consist of both selling a service AND a product: for instance, a person who owns a dog grooming business may offer this service along with a few products for clients to purchase.
While some people believe that the first thing you decide upon is the business you want to run and this will inevitably lead to whether you are opening a service or product style company, this is not always the truth. Many moms with whom I’ve spoken or interviewed over the years stated they knew they wanted to run some type of company but, in the beginning, had no idea what they wanted to do.
For instance, the ladies at Balamar Springs, who create water in paper containers, had a variety of ideas for businesses but didn’t narrow it down until they sat and talked over each. It is possible you will know you want to be a business owner without understanding what it is you want to do!
If you are deciding on a business type and narrowing it down right now, there are pros and cons to each type you will need to consider.
A service company offers a service. While they may also offer products, their main business is offering a service to customers or clients. You may:
- walk dogs
- become a nanny
- open a massage company
- offer web design services
- become a freelance writer
- operate a taxi or shuttle service
These are just a few ideas, of course, but each consists of offering a person a service. You are not selling something they can hold, for the most part: you are selling something you can do for them so they do not have to do it themselves.
Pros of a service-oriented company:
- Scheduling: for the most part, you can create a schedule that says you will operate and run these services at a set time each day, and you open and close at a set time. You may spend additional time doing bookkeeping and other business-related tasks as well.
- No need for storage for numerous products. You may have the tools you need to operate your business – a van, a computer, a table, and so forth. But you will not need a storage bin to hold hundreds or thousands of bottles of shampoo, necklaces, clothes or household items.
- Less money going into the business – typically. Since you are not buying items to make the products, nor paying someone to make them, you can generally start up a service oriented company for less. This is not always the case, of course – if you are offering limo services you’ll need to purchase the cars – but it is a general rule of thumb.
- Many times you can run a service-oriented company out of your home or a mobile van. This reduces start up costs for leasing or purchasing a space in which you run the business. Again, this is not always the case but is a good rule of thumb.