Offering products or services
Most businesses typically sell either products or services to their customers. When starting up your business, deciding what you will offer is essential, and there are many factors to consider.
Considering your startup options
An important consideration when deciding between creating a product - or service-based business, is the time and costs involved - and how soon it will generate income. With a product-based business, it takes time to source or create, then test, the goods being sold. The goods then need to sell in sufficient numbers to cover their cost before any profit is made, which may also take time. When the goods are sold, however, they are usually paid for immediately by the customer.
In contrast, services can be offered immediately and with minimal set-up costs, if it is you providing them yourself. However, if you require training or need specific equipment, this will take time and money. Also, customers typically expect to be invoiced for certain services, which can mean waiting several weeks to be paid.
Some businesses offer products and services. A motor mechanic, for example, might repair and sell cars, enjoying the benefits of both types of business. However, when starting out for the first time, it is advisable to concentrate on one type first before trying the other.