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Home Based Business Types – Service Or Product

by C. Ken Davis

More Home Business Articles

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Published on this site: October 13th, 2008 - See more articles from this month

There are basically two types of home based businesses, service and product. Each is quite different when it comes to operating the business and handling customers. Understanding these differences and organizing your business to match the type is essential to your success. Let's examine some of the differences in the two types.

The Service home business involves providing a service to a customer rather than a physical product. These businesses can usually get started for a small investment without a great deal of room. This service can range from consulting to suggest a problem solution to actual handling of the customer's product ordering. Total commitment to the customer is essential. A home based service business lives or dies on this commitment. The customer looks to you for help and must trust your solution; therefore trust is the first important step. The second most important attribute in the service business is expertise. You would not go to a dentist to fix a broken foot. Your dentist may be trustworthy but feet are not his area of expertise. Go with what your area of expertise happens to be. Everyone is good at something, your expertise may be from previous jobs or a certain hobby you are passionate about. Never underestimate your own talents.

A product based home business involves selling an actual physical product to the customer. The product is the central point to the customer. Generally the customer has a need or desire for a specific type product. An example could be a car. Everyone needs one but sometimes they desire a different one from what they have. This need and desire exists for the customer and it is your responsibility to meet that need. So unlike the service business, the product brings the customer to you. This is when the trust factor kicks in. Most people buy from those they trust. Your product may be similar or even the same as many others on the market. The trust factor and fair price can win the customer. After the sale customer service will insure continued loyalty and many referrals for other product sales. With a product business there are two options – selling your own product or selling someone else's product. These two options are different, as well.

When you sell your own product you have to keep inventory of the product. You have to have the product manufactured either in your own business or off-site. Along with this manufacturing, your business will handle all the legal issues with the product. Customer support comes along with all your other responsibilities. However, you are in complete control over every aspect of the business. You ship, handle issues and sell. It is a big thing to take on, but if you have a good product it can mean huge profits.

The second type of product is someone else's. You usually do not keep an inventory or manufacture the product. The legal aspects and product support are not your responsibility either. Shipping and overall fulfillment are handled by someone else. The main drawback however, you share the profits with the product owner. This can be a split or commission percentage. This means less profit for each sale.

It becomes obvious that there are many decisions to make before going into a home based business. How do you decide which is the best choice for you? That usually involves thinking about what you are going to sell. If you already know then you know what type of home business is best for you. However, if you do not know then you will have to go out and start brainstorming. See what options are available and figure out what you want to do.

Your own Home Based business is tremendously rewarding. It also can earn a nice profit for you and your family. The pride in creating your own business and making it successful cannot be equaled. Don't go into it blindly, learn as much as possible about the business you are planning to run. Good luck and make a huge profit.

C. Ken Davis: Has had many successful at home businesses. He is now enjoying success with on-line businesses and offers information, resources and help at:

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