So you’re looking to start a new venture and unsure of which direction to go in?

Firstly, you need to decide whether you wish to look for a product or service to sell. Products are often easier because consumers can clearly see what they’re actually paying for and it’s definitely easier to describe when selling.

What’s the difference between a product and a service?

A product is usually something tangible which generally conveys what it does and shows why it’s worth paying good money for. All buying decisions are emotional. Consumer surveys show that 20% of the decision to make a purchase are logical and 80% is emotional. Logic is fact based. Emotions are feelings that cause actions and reactions and influence buying habits. When i’m making purchases, I usually use logic – Yes, I compare product specifications and prices and think about things before investing in it, especially for larger purchases such as computers, cars or even travel experiences. Sometimes, you need to spend time and search around to make a really good investment. That does not mean I have not bought on impulse before – just that there are a range of factors and circumstances which lead to purchasing decisions.

When selling, a product needs a bit of embellishing to make it attractive to purchasers. You only have to look at designer brands to see how the use of packaging is crucial – it can be a significant contributing factor to making a purchasing decision. That’s why packaging can provide both a functional and design element, helping it to stand out from competitors.

A service is intangible. Examples of services can be Leadership Coaching, Management Consultancy Services or Accounting Services. The UK is better at exporting ‘Services’ than it is at exporting ‘Products’ – but that can often be explained to the declining of our manufacturing sector which started to take place decades ago.

So, which should you choose?

All product based businesses are a mixture between tangible products with service-based support. In fact, this support service can be a differentiator to help the product stand out. You need to decide what level of support you wish to offer whether selling a product or service. Let’s say for example you wanted to start up an E-Commerce business selling goods over the internet. For that, you would differentiate yourself in the market by offering a range of delivery speeds, order tracking, efficient customer service and even perhaps a follow-up service. It’s why Amazon does so well over it’s rivals and delivers on point. If you don’t wish to have such a high level of customer service, then the best thing to do would be to start a business where customer service is not that important.

Starting up

Businesses can be run from home when you first start out. Manufacturing, warehousing, delivery, invoicing and collecting money can all be outsourced using various vendors.

Do people want your product at the price you’re selling at? Do you have a viable proposition? Is there an unfilled need in the market? Find that gap in the market!

Gaps are usually left behind bigger businesses because they haven’t addressed the needs of a particular demographic or have not bothered to fill it.

You can easily reposition an existing product with a novel idea. For example, what’s working overseas that you haven’t spotted in your own country? There are ideas everywhere. You just need to be on the lookout.

You’re an inventor? Great, but it’s also the hardest and most riskiest ways of entering into the market. If successful, you can earn lots. However, there is also a lot of work to be done with patents and trademarks and therefore can end up being expensive and taking longer than you might expect.

Most people opt for an internet-based business. However, markets are saturated and there are hardly ever new ideas coming out. So, in order to win the internet, you must have a WINNING idea. You can, however, start off by piggy-backing off another business concept to start with but essentially this won’t give you the creative outlet you desire if that’s what you’re looking for.

Franchising is still a popular option. The Franchisor supplies and trains the franchisee who sells to others. Again, although a safe way of moving into business, limited creativity and a set of rules to follow to fit in with the original franchisor makes it difficult to make your impact on your own business. It also costs a lot to buy a franchise, including continuous payments of royalties. If you decide to go down this route, it’s important to seek both legal and financial advice. Also, choose the right Franchisor and ask what support they provide – make them prove their competence.

Network Marketing has a bad rep! People often link it to pyramid schemes so be careful when looking into this option. If a company offers lots of profit for little work and asks for huge investment, avoid avoid avoid! Pyramid selling is also illegal in the UK so make sure you investigate before signing up for business options like this. Sites like Linkedin are a haven for these kind of businesses so check carefully and ask others before investing in a Linkedin Guru!

Once you’ve decided which option suits you, start planning – do you have what it takes to start and is the business right for you? Is there a market? Lots to think about – don’t believe the hype and start randomly. That hardly ever works and no it is not RISK TAKING. You want to have a viable business which is sustainable to manage and continues to evolve over years. You want to still be in business after the 5 year mark – that’s real success!