QUESTION on Start a Business with Your own Idea
Would it be easier to start a business with your own idea or with an idea already established?
ANSWER by Isabel Isidro
Based on what we have seen thus far with home-based businesses, going into a business which is already an established idea has lesser risks of failure than building a new business with an entirely new idea. It is easier to start a business whose idea is well-established and known by consumers.
When the idea is already accepted by the consumers or the public as a whole, your focus will be on employing marketing techniques that will keep consumer’s interest in the business and to reach new markets. You will no longer be saddled in orienting the public about your product and convincing them of its many benefits. You only need to highlight the factors that make your business rise above all the rest, because people already know what the business is.
This is one reason why many individuals or groups of entrepreneurs, very often pool-in their capital to buy franchises that looks profitable. The business concept has been proven to be sound and successful: your task is to keep the momentum going, manage the business smartly and continue building its customer base. If you are buying a business, you may even be fortunate enough to have the previous owner mentor and guide you in running the business.
Take for example the business of selling antiques. People understand what an antique is; you just have to inform them as to what kind of antiques you are selling and what sets you apart from the thousands of antique dealers in the country.
Another good example Starbucks and its massive global succcess. Starbucks did not invent coffee; nor are they the world’s first ever coffeeshop. Yet they achieved tremendous success by overhauling the way people consume coffee and the whole experience of enjoying coffee.
If you start a business based on your own idea or original product or concept, you become the first in the field. Doing so gives you what is called the “first mover advantage.” You introduce the product; you set the pace; you are the innovator. If the product is successful and copycats spring from everywhere, your brand still remains strong. Think of Xerox that paved the way for photocopying or eBay. These brands became very successful because they were the first in their markets.
Even if you are not dreaming of becoming a world-renowned brand name, starting your own business from scratch entails a lot more risk and resources. You need to find ways to get the word out about your business and struggle (it’s always a struggle) to get that first customer. You will not have a support mechanism that someone who buys a franchise or an existing business enjoys.
Because you are the innovator, there will be others who will copy your products (sometimes to the exact specifications). You need to have the patents to protect your products from copycats and counterfeiters. Doing so requires a lot of time and resources, which could eat up your precious time that should be spent in growing your business.
However, being a first mover in the marketplace is not a guarantee to success. Many first movers have perished after creating the market and paving the way for other businesses. Netscape started before Chrome or Internet Explorer, but now has disappeared from the marketplace. So do other first movers such as MySpace or the gaming system Atari.
I suggest that you read our article Three Roads to Business Ownership” to help you understand the advantages and disadvantages of the various entry points to entrepreneurship
Recommended Books on Home Business or Franchising
- Buying a Franchise: Better Business Bureau: Insider’s Guide to Success
- The Educated Franchisee: The How-To Book for Choosing a Winning Franchise, 2nd Edition
- Start Your Own Business, Fifth Edition: The Only Start-Up Book You’ll Ever Need
- Become Your Own Boss in 12 Months: A Month-by-Month Guide to a Business that Works
Article originally published June 2001. Updated on March 8, 2012
- Picking a Franchise For Your Investment Potential
- Franchise Opportunities: 5 Important Points to Consider
- Checklist of Questions to Answer Before You Buy a Franchise
- Factors to Consider in Franchise Contracts and Agreements
- Pros and Cons of Starting a Franchise Business