With well paying, career building jobs in short supply, business ownership is on the upswing. But, how does one find the right business that offers long-term financial security for them and their families in our new economy? I regularly work with individuals who are considering business ownership and the conversation always turns to the “financial security” question.
What product or service offers the best potential at the lowest risk? Who specifically will want the product or service? Can people be educated or influenced to purchase the service? Is it a sound business idea? How long will it take to ramp up the business? Needless to say, these questions can be overwhelming to those contemplating business ownership.
There are few “rules of the road” in evaluating the success of a business concept in our new economy. Yet, companies possessing the following trends seem to have an advantage in the new marketplace.
1) Services that include protected technology provides an advantage. A business with protected technology or proven processes limits the impact of competition and guarantees competitive advantage. Custom point-of-sale software and GPS tracking allows even a one person, home maintenance business to have an advantage. Strong technology enhances new markets with unlimited growth and stresses the importance of innovation.
2) Strong brands possess strong financial models. We learned though the recent recession to never underestimate brand loyalty users opting for Apple products. Customers will pay a higher price – and preorder items months in advance — to receive a proven and quality product or service. Strong sales at strong prices leads to strong financials.
3) Mature products and services need a value proposition. Over time, brands develop competitors – alternative products, services, technologies, suppliers. Successful brands differentiate their business from their competitors. Identifying the differentiated value – why a brand is “new”, “better” or “unique” — is the universal, driving force behind the continual reintroduction of a product or service into the marketplace.
4) Products or services that fill a niche leads to referrals. Does it address the needs of an underserved market? Involve regulation changes? Societal trends and demographic shifts can mean new and expanding industries as we are seeing in the senior care industry. Senior customers not only seek products and services that avoid inconvenience, but reward trustworthy providers with endless referrals.
5) Brands that diversify can more successfully survive economic volatility. Businesses offering their customers multiple products and services are much better prepared for an economic downturn or changes in the market. A diversified product or service offering means a business can shift focus from one product to another while minimizing the impact to the customer base or bottom line.
There is certainly no “sure thing” when it comes to business success. Yet, focusing on businesses which incorporate modern technology, innovative products and services, strong branding, and possibly within a niche market can offer an edge toward success in 2016. These products and services will almost certainly be the ones which offer the strongest profitability and long-term financial security for business owners and their families.