Surely at some point in your life you wondered how to create a profitable business or, if you already have one running, how you could improve its results to increase its profitability.
That’s why we put together this profitable business guide: to help you answer these questions (and many more) that relate to the different stages of creating, improving and consolidating a successful business.
We hope you find it very useful and that it helps you to enhance your success story. Shall we start?
The first thing you have to do to achieve a profitable business in Any Place is to develop a business concept , that is, define the product you are going to sell, investigate what the profile of your potential customers is, detect what your competition is, how you are going to finance your project, among other things.
This means that planning is key to starting a profitable venture, and it is reflected through a business plan .
A business plan is a fundamental guide for all people who want to start selling products both online and offline. It provides clear direction and understands both the strengths and potential weaknesses of the proposed business, and allows you to analyze various aspects of the future brand.
Therefore, in this section we are going to address each of these steps necessary to start a profitable business in Any Place.
What is a profitable business
A profitable business is one that generates more income than expenses , more profit than loss, and that is where all the people who want to start a business aim.
As we said above, to achieve this, it is key to first develop the business concept , that is, the different ways in which the company can create value and compete in the market. And how is it done? From an idea.
This idea usually arises from a real consumer need that today is not being satisfied . For example, buyers who want to purchase clothing made from reusable fabric because they are in favor of caring for the environment and fair trade, and cannot find a brand on the market that meets their need.
To create a successful business concept and thus aim for a profitable venture, it is ideal to meet 4 requirements:
- There must be a group of consumers willing to buy the product at the offered price.
- Ideally, the market should be large enough to support the business and generate a profit.
- The person in charge of the trade has to differentiate his business from the competition .
- You also need to be able to finance your business , either personally or through other sources of financing.
Later we will explain how to turn this business concept into a business plan . Now let’s analyze what are the types of profitable ventures that you can choose to start selling your products.
Profitable business types
There are different ways to offer what you want to sell to your potential clients, the decision will depend on the business style you want to create and your objectives. In general terms, we can highlight 6 types of businesses that generate profitability .
We are going to explain each one of them with some examples so that you can be inspired and define what style of business to undertake.
1) Craft production
This type of business is one of the oldest that exists. It consists of the transformation of raw materials into products made 100% by hand , sometimes with the help of simple tools.
These articles are made one by one, that is why it is said that none is the same as the other: they are unique pieces from beginning to end and bear the stamp of the author. In general, artisanal production is carried out in small quantities and is aimed at a reduced public due to the level of demand and times that the same production implies.
2) Series production
Unlike artisanal production, serial production involves the manufacture of homogeneous products , that is, with the same characteristics as each other, on a large scale and with the intervention of industrial machines. In this way, the production of articles is much faster and less laborious in physical terms. In addition, times are considerably optimized and that allows meeting a greater demand within the market.
In order to be more competitive, it is recommended that the serial product has some differential , some characteristic that stands out from the rest so that it is not lost in the sea of available products.
This type of mass production tends to occur a lot in the fashion industry, mainly in the so-called fast fashion ( fast fashion ), where clothing and shoes take the lead.
It is worth noting that, in recent years, different fashion brands have joined the slow fashion movement which, in contrast to the previous one, involves the manufacture of garments made from environmentally friendly materials, respecting the times of production and based on fair trade.
Finally, it is important to mention that there are cases in which businesses that manufacture their own products (both artisan and industrial) and sell directly to the final consumer, generate a higher profit margin than other types of businesses, being many times more profitable than the rest.
The purchase and sale of products represents a good option for those brands that want to market items, but not manufacture them. Production, both artisanal and industrial, involves investments such as labor, special workspaces, machinery and a series of other characteristics that, in the buying and selling business, have already been resolved.
In this way, the brand only has to focus on how to sell those products .
These brands generally buy items in bulk and therefore get wholesale prices. Then, to those prices they add their profit (and other costs that we will detail in the next section) to calculate the total price at which it will be sold to the final consumer .
Another interesting business to start is the consignment business, that is, delivering your product to a third party (another brand, for example) so that they can sell it (in their online store, their physical premises, a showroom, etc.) and receive a payment once the transaction is finalized.
This type of business is ideal for those brands whose interest is not placed on the end consumer but on the product’s marketing chain. Examples of consignment business are clothing, books, fashion accessories, among many others.
The dropshipping is a unique kind of business profitable e – commerce that is selling products to the final consumer without a proper physical stock .
Let’s graph with an example: let’s suppose that a potential customer is browsing your online store, sees an item that interests them, the price seems fair and decides to buy it. Leave your physical address for shipping the product and know that you will receive it in 3 days.
Immediately you receive a notification of this order and the notice that the money is already in your account. Then, you ask your dropshipper (distributor) for that item and you detail the address where it has to be sent (beforehand, you agree with him if you pay him everything together at the end of the month or on request).
This means that you outsource the stock and deliveries of the orders . In this way, you become the intermediary between the provider and the customer.
One of the main advantages is that you save the rent or purchase of a deposit to store the merchandise, in addition you do not have to carry out the inventory management. As important disadvantages of this modality, you do not always have the guarantee that the product will arrive in time and form at your client’s home (it may take more days), and the packaging that you receive is generic and does not reflect the identity of your brand.