Starting a Home Based Business: Service or Product?

Much of the time your business idea will determine whether your business is product- or service-oriented. The following questions are those a potential home based business owner should consider when either deciding on a business type or, after deciding, when planning a course of action to get from the initial idea to an operable company.

Product:

1. Do you need to create the product in advance or on an on-order basis?
2. If in advance, do you have a place to store the product once it is designed?
3. If per order, do you have enough time to devote to the manufacturing of the product if you obtain a large order at one time?
4. Where will you purchase the materials needed to create your product?
5. Who will produce your product? Can it be done at home, or will it have to be sent to another company; and if the latter, have you spoken to a variety of companies for an idea of cost and time?
6. If you will produce the order at home, do you have the necessary space and equipment to do so?
7. How much is needed to invest up front for manufacturing costs?
8. Do you have this money saved?
9. Where will you sell the item(s)?
10. Who are your competitors –- local and global?
11. Are you comfortable selling products?

Service:

1. Where will you perform the service: in the home, on the road, or at another location?
2. If at home, do you have the appropriate space?
3. If on the road, such as one might with a traveling spa, pet grooming, or personal trainer business, do you have reliable transportation and the equipment needed to go from one location to the next?
4. Do you have the equipment needed to perform the service? This might include equipment specific to the business, such as hair styling tools, as well as equipment needed to operate a company, like a computer, fax machine, and separate phone line.
5. If not, do you have money set aside to purchase the equipment?
6. Will you price per hour or per project?
7. Do you know what competitors charge for similar services?
8. Who are your competitors?
9. Many service providers have to work ‘off’ hours, such as nights and weekends. Is this okay?

Source
By : Kathy Murdock