Which Business to Start?
Which Business to Start?
“Which business to start?” is one of the Frequently Asked Question amongst those wishing to start a business. The reason to start a business varies widely amongst Entrepreneurs from chance to a problem they faced. In this article, we look at some of the common reasons to start a business.
Starting a business to solve a market inefficiency could make good business sense. For example, the inefficiency of the Indian Postal System has lead to the development of many new courier and delivery companies that leverage technology to ensure fast and reliable delivery of goods.
Solving Pain Points
Solving customer pain points can be another good reason to start a business. Take for instance the problems of purchasing a good from a local neighbor shop that is not connected to the internet. To buy from such a shop, the customer would have to physically travel to the store. This pain point is now being solved by “hyper-local” service providers – who create technology and the necessary logistics infrastructure to make the goods available in neighborhood shops on smartphones and at the doorsteps of the customers.
Not all successful businesses have to address a market inefficiency or solve a customer pain point, a business can also be built around providing newer experiences for the customer. For instance, the iPhone and iPad provided newer ways for a person to stay connected and created an entire industry around it. Similarly, the Virgin Galactic One, which provides space travel is a good example of a business built built around providing newer experiences to its customers.
Establishing a business in a new and growing sector can help establish a successful business. For instance, if an industry is witnessing massive growth, like the IT sector and Real Estate industry over the last decade, a successful business can be built with minimal risk. For example, a lot of start-ups in the IT sector in India did very well because there was huge demand in that industry and the growth was outpacing other industries.
Creating a superior product or service in terms of pricing or quality can be another reason to start a business. Often times, though a product or service may serve a certain target audience well, there can maybe additional opportunities by creating a product that is different in terms of price, quality or positioning. The automobile industry has successfully adopted this strategy by creating different brands to meet the needs of different customers. For instance – General Motors owns the brands GMC, Chevrolet, Cadillac, Opel, Buick and more.
Some businesses can be created based on the seasonal demand of the customers. Good examples of seasonal businesses include Diwali Firecracker Shows, Christmas Tree Shops, hotels located at destinations that attract seasonal visitors and more. If you decide on a seasonal business, you will need to consider how to operate during off-season months.
Are you planning to start a new business? Talk to an IndiaFilings Business Advisor or know more from the following articles: