A lot of people get lost while constructing a company from scratch. The key is to keep in mind what goals you need to achieve and in how much time. There are a lot of things you should keep in mind when starting a business. Here are some of the important principles to remember to build the perfect company.
- The ideal business sells worldwide rather than a limited range such as a neighborhood or city or state. In other words, it should have an unlimited global market. We all have seen the retail store in the neighbourhood which, despite having been around for years, fades away as a bigger retail store steps into the area.
- The ideal business will always offer a product that enjoys an ‘inelastic’ demand. The term ‘inelastic’ refers to a product that people desire or need regardless of its cost.
- The ideal business sells a product that cannot be easily copied or reproduced. This means that the product is completely original or at least something that can be patented or copyrighted.
- The ideal business should have minimal labour requirement. Virtual corporations are famous examples for this today. The virtual corporation might consist of an office comprising of three executives, while all other services and manufacturing are farmed out to other companies.
- The ideal business should enjoy low overhead costs. It should not need an expensive location, nor should it need expensive legal advice, a large inventory, high electricity, high-priced employees and advertising.
- The ideal business should not require major investments or cash outlays in equipment. In simpler words, it should not be one that ties down your capital. Incidentally, under-capitalisation is one of the major reasons for a new business’s failure.
- The ideal business is one that enjoys cash billings. In simpler words, it is not one that ties down your capital with complex or lengthy credit terms.
- The ideal business should be relatively free of all kinds of industry and government regulations.
- The ideal business should be easily moveable or portable. This means that it should be able to adapt to location changes if needed. This one characteristic is particularly instrumental when expansion takes place.
- The ideal business will always satisfy your intellectual and even emotional needs. There’s nothing in the world like being passionate about what you’re doing. You’re having fun when that happens, you’re not working.
- The ideal business will leave you with free time. It doesn’t require your attention and effort for 12, 16, 18 or 24 hours a day.
- The ideal business is one where your income is not limited by your personal output like in the case of lawyers and doctors. It should allow you to sell to 10,000 customers as easily as you are able to sell to one.
Know of businesses which have these characteristics? Or even run one? Let us know in the comments section below.