6 Factors That Will Help YOU Determine Which Business YOU Should Start

What business should you start? Here’s some factors to help you decide.

For new entrepreneurs, it can be hard to choose what kind of business to start. This decision will determine the success of your business in the future. The right path may depend on some important factors, such as budget, time, and scalability. 

Budget

It is important to be able to properly fund your company idea and plan your budget at the beginning. You should look at how much money it may look like to get the business started and analyze your current financial situation. 

Then next you should create a financial plan to look at what it may cost to run a successful new business. 

Available Resources and Time

First, consider the number of resources and time you need to jump-start your business idea. Studies show it takes on average two to three years for a company to become profitable, during that time you will be spending a lot of effort as you try to maintain and launch your business. 

Then take inventory of the resources you have and make a pros and cons list of adding a business partner to help assist. 

Scalability

Your business’s scalability is important to consider. Here are some questions to ask yourself when thinking about if your business idea will grow sustainably and efficiently: 

• Does your idea connect with your customer demand?

• Can you duplicate the service and product multiple times?

• As the business grows, will your business idea meet customer standards and needs?

• Does your business idea have to be constantly adjusted or reevaluated over time?

If the answer is “no” to any of these questions, you may need to reevaluate if this business idea is right for you. 

Market Demand and Size

When starting a business, it requires research into your business’s ideal consumer base and audience and/or your target market. Ask yourself how your business idea can solve your customer’s problem and what they would do without your service or product. 

During this time you should also research your competitors and learn why consumers may be more drawn to other products and services than yours. Also, evaluate if your idea has enough demand to become profitable, it may be difficult to break into a market with a lot of competition. 

Your Experience

It is important to have a basic understanding of how to start a business, it also helps to have expertise in your area of business. You should start by researching the competition and business resources to see if your idea will thrive in the current market. 

Then you should freshen up on your knowledge of the industry that your business idea is in, and brainstorm how to impact and contribute to that industry. Additionally, hire a consultant to help you or make time to take courses to assist in the business process. 

Your Interest and Passion

From an interest or passion you have, a great business idea may come from there. Persistence and passion are very important, as starting a business comes with fear of failure, obstacles, and late nights. If you start your business on a great idea that you are passionate about then it will help to sustain you through hard times. 

Conclusion

Ready to start your business now? By having the correct budget, available time and resources, scalability, knowing your target market, expertise in your industry, and passion and interest then go get your idea off the ground!

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Capital Expenses vs Operating Expenses and Which Will Optimize Your Software Purchases?

Investing in the right enterprise software is a crucial part of any successful business. In fact, with technological advances such as the cloud and SaaS, developing worldwide, not having the right software systems to keep up can be a make-or-break situation for your business.

When it comes to making the decision for which software purchase to choose there are so many factors to consider which ultimately take up a chunk of your time and resources. Then add on top of that trying to figure out which financial systems to use, and you have a recipe for disaster. To help speed up the process, we’ve put together a comparison list comparing Capital Expenses and Operating Expenses to help you make the wisest decision.

Definition of Capital Expenses and Operating Expenses

CapEx, otherwise known as Capital Expenses, are any investments spent on goods or assets. For example, property, infrastructure, equipment, even owned software licenses are all capital expenditures. The only thing with these CapEx investments is that you must keep them accounted for over their lifetime, usually 3 to 10 years, to reflect their current value.

Now OpEx, or Operation Expenses, have a completely different accounting system. When recording these expenses they will become a part of the company's profits and losses. This is simply because operating expenses are just what it takes to keep the business running.

Let's compare:

Purpose CapEx- Asset purchased with a life that goes beyond the current fiscal year.

OpEx- An ongoing cost.

Cost CapEx- One lump sum.

OpEx- Monthly or annually.

When Capex- Accounted for over 3 to 10 years.

OpEx- Accounted for in the current month or year.

Titled CapEx- Equipment, property asset.

OpEx- Operating cost.

Taxes CapEx- As the asset depreciates it is deducted over time.

OpEx- Just deducted in the current year.

Examples

CapEx- Purchasing a license to a software.

OpEx- Buying a desk to set up your workstation on.

Conclusion

Both CapEx and OpEx have their benefits but in recent years, the growing difficult economic times have put stress on businesses and many have started to opt for freezing capital expenses and converting them to operating expenses. Aside from the financial reasons for prioritizing operating costs, the ever-changing technology systems of new hardware or innovative SaaS also play a huge impact on not wanting to be tied down to one asset for years when the next better option is just around the corner. 

Therefore, moving to invest in flexible systems can be the best way to optimize your business. Operating expenses can eliminate the stress of system failures, and will put less stress on your accounting team trying to balance out the annual costs. Altogether, in this day in age, it is the most efficient way to grow your business by letting your team focus on doing what they do best.

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What Are the 4 Types of Entrepreneurship?

Millions of startups have been launched since 2019 by different entrepreneurs. Although the statistics are not always positive, with nine out of 10 startups failing, this hasn't stopped entrepreneurs from starting a business these days.

There are different reasons why startups fail, from insufficient funds to a wrong perspective. Before making a decision about what type of business you want to start, you must first know what type of entrepreneur you are going to be because it will help you set your goals.

In this blog, we discuss the four types of entrepreneurship and give some examples for each.

1.Small Business Entrepreneurship

Most startups are in the small business entrepreneurship arena. A small business can be any restaurant, retail store, or company launched by a founder, without the intention of converting the business into a franchise or chain.

This category of business comprises small businesses such as small grocery stores, service providers, or restaurants. Additionally, influencers who work on social media such as Instagram or YouTube and product testers are also considered small businesses.

2. Large Business Entrepreneurship

This entrepreneurship model is distinguished by creating a new business entity within an existing company, such as a new product line or division, rather than building a new business from scratch.

Entrepreneurs in large companies seek opportunities to enter new customer markets through innovation. Often large companies due to their size find it difficult to keep up with market demand and sometimes only find the solution to their problems by taking a smaller company and delegating innovation to the new acquisition, thus eliminating market competition.

An example of this is Facebook with Whatsapp and Instagram, Disney with Pixel, and Amazon with Whole Foods.

3. Social Entrepreneurship

This model sometimes describes a non-profit organization. The main objective of these companies is to achieve positive changes in society through their initiatives. Although they focus on solving social problems, such as access to food and education, for some of these companies their objective is still to make money. 

An example of a social entrepreneur is Blake Mycoskie, who invested $300,000 of his own money in creating the TOMS Shoes company. Campaigns such as "One-For-One" where they donate a pair of shoes for each one sold, supported water, birth, sight, and anti-bullying initiatives. Through TOMS, Mycoskie has raised awareness on global issues such as poverty and health.

4. Scalable Startup

A scalable startup venture is different from a small business entrepreneur because of its growth plan, a scalable startup develops ideas with the intention of growing. The common pattern seen in startups is to create a viable business with the ability to repeat itself at scale.

Many famous tech companies fall under this model, for example, Facebook, Apple, and Google.

Another example of scalable startups is Uber and Airbnb, the common theme here is to start small, succeed, and then expand.

Before entering the entrepreneurial path, you must identify what type of entrepreneur you want to be, thinking about whether you are only interested in making money, being your own boss, or creating a positive impact on society will help you understand what type of entrepreneurship goes with your personality and goals.

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