Education

WHAT IS A BUSINESS OPPORTUNITY

business opportunity
Written by Lavanya Singh

Did you want to become an entrepreneur? Or, are you self-employed and searching for new ways of earning more? If yes then what you really need is a good opportunity for company. Day by day the options are getting bigger. You may opt for a business opportunity at home, online or some other form.

A business opportunity (or bizopp) includes deal or rent of any item, administration, gear, and so forth that will empower the buyer licensee to start a business. The licensor or merchant of a business opportunity for the most part pronounces that it will make sure about or help the purchaser in finding a reasonable area or give the item to the buyer licensee. This is not quite the same as the offer of an autonomous business, in which there is no proceeded with relationship required by the merchant. One of the most significant indictors for future enterprise is the expertise of finding the business opportunity. This is viewed as the lynchpin around which the guarantee of innovative endeavour is to be fabricated.

A business opportunity comprises of four components which are all to be available inside the equivalent time span and regularly inside a similar area or geological area, before it tends to be asserted as a business opportunity.

These four components are:

A need

The way to satisfy the need

A strategy to apply the way to satisfy the need and;

A strategy to profit

With any of the components missing, a business opportunity might be created, by finding the missing component. An alluring trademark is for the blend of components to be one of a kind. The more control an organization (or individual) has over the components, the better they are situated to misuse the chance and become a specialty advertise pioneer.

CLASSIFICATION OF BUSINESS OPPORTUNITY

Franchising:

franchise

Franchising is an agreement where franchisor (one party) grants or licenses a franchisee (another party) with certain rights and authorities. Franchising is a well-known brand growth technique.

Franchisor and Franchisee are forming a contractual arrangement. Franchisor authorizes franchisees to market their merchandise, goods and services and to grant permission to use their logo and brand name. And those franchisors are behaving like a dealer.

To return, the franchisee charges the franchisor a one-time fee or bonus, and some revenue share. Many advantages for franchisors are that they don’t have to spend money on educating workers, they get to know business strategies.

Franchising is essentially a right granted to others by the producers or businesses. This right allows the beneficiaries to market certain producers or parent corporations’ goods or services. In terms of recourse to intellectual property rights, only such rights may be.

Benefits

Franchising is an ideal way of expanding a company without incurring unnecessary growth costs. That is because the franchise pays all of the sales expenses. It additionally helps to create a brand identity, increase reputation and attract more consumers.

A franchise that use franchising to open a business on the franchisor’s pre-established brand name. It helps the franchise to forecast its success and reduce the chance of failure.

Often, the franchise doesn’t need to spend money on recruitment and assistance as this is provided by the franchisor.

The benefit is that a franchisee can may have exclusive rights to sell the franchisor ‘s goods within a region. Franchisees will know about the business strategies and company trade secrets.

Example of franchising: McDonald’s, Dominos, KFC, Pizza Hut, Subway Dunkin’ Donuts, Taco Bell, Baskin Robbins, Burger King etc.

Distributing and Dealing:

Distributing and Dealing

Distributors and dealers are supplier channel partners. Typically the distributor is a wholesaler who sells to distributors and dealers is usually a seller who sells directly to the public. The jargon of the dealer-distributor is most prevalent in the distribution of machinery and mechanical products — thus in cars, trucks, farm and building equipment, yard and garden products (green goods), appliances (white goods), electronics, and manufacturing equipment sales as well. There are several variations of this basic structure.

The products they market-the distributor from the supplier, the distributor from the seller-are ultimately bought from both distributors and dealers. Distributors hold inventories of parts, and the dealers provide the ultimate customers with service functions (“service dealers”). Relationships are usually contractual in nature between manufacturers, distributors, and dealers. Distributors and in exchange distributors engage in the manufacturers’ reward schemes such as subsidized promotional programs, incentives, and exclusive discounts. Distributors and retailers have the right to use the trademarks and logos of the manufacturer-but not as their own.

Relationships between distributors and dealers with suppliers have several characteristics in common with franchises. State legislation regulating franchises can also contain provisions that apply specifically to distributors and dealers. Traditional retailers and dealers rarely pay the manufacturer an up-front fee for the privilege of selling the manufacturer’s products — but a minimum amount of goods might be contractually obliged to purchase. Distributors and dealers against the manufacturer can be fairly powerful or relatively small, but in both situations, they carry something to the table, namely an already developed existing market.

Benefits and Cost:

There are differences in the way a distributor and a dealer are operated. A distributor usually costs more than a dealer, and needs leadership skills and a clear understanding of basic business skills. Most likely it will have a greater territory than a dealer, and may even spread to more than one place. A dealership tends to be local and requires less capital for startups. A dealer may focus his / her efforts on one location’s management and success. The dealer works closely with a manufacturer and he or she always pays to maintain the partnership. The distributorship that, in the end, be more lucrative; but it will require different skills and higher investment.

Networking:

networking

Network marketing is a business model that relies on the selling of individual representatives from person to person, often operating from home. A network marketing company can require that you create a network of business partners or salespeople to help generate lead and close sales. There are several legitimate marketing operations for the network, but others were dismissed as pyramid schemes. The latter may focus less on sales to consumers than on recruiting salespeople who may need to pay for expensive starter kits up front.

Network marketing appeals to people with high energy and good selling skills, who with a small investment can create a profitable company. A marketing network company can be a one-tiered platform in which you sell the goods or multi-tier where you hire salespeople. Beware of network marketing firms that generate several layers of salespeople and study the company extensively before you enter.

Working

Network marketing is recognized by a number of terms, including multilevel marketing, cellular marketing, partner marketing, consumer-direct marketing, referral marketing, or domestic company franchising. Companies who adopt the concept of network marketing frequently build third parties of sales people, salespeople are encouraged to hire their own salespeople networks. The designers of a new tier receive profits from the people in the tier they generated on their own sales and on the sales. A new tier will sprout another tier in time adding to the individual in the top tier as well as the middle tier more fee. Thus salespeople ‘s earnings rely on both recruiting and sales.

Advantage and disadvantage

There’s some stigma attached to the marketing business of networking, particularly those with multiple levels that can be described as pyramid schemes. The top-tier salespeople will make large amounts of money on fees from the tiers below them. The people on the lower echelons earn much less. The organization is making money by providing expensive starter kits to new hires. The attraction of network marketing is that with a small investment, an person with a lot of energy and strong selling skills can build a lucrative offer.

A simple thumb rule is that single-tier network marketing operations appear to be more reliable than multi-tiered schemes in which individuals make money depending on the amount of distributors they are hiring. Types of credible single-tier marketing activities are Avon Products, Mary Kay, and Excel Communications.

Licensing:

license

Licensing is characterized as a contractual agreement, wherein a company authorizes another company by granting a license to temporarily access its intellectual property rights, i.e. manufacturing process, brand name, copyright , trademark, patent, technology, trade secret, etc. for sufficient consideration and under specified conditions. The firm that permits another firm to use its intangible assets is the licensor and the company to which the license is given is the licensee. A fee or royalty is charged by the licensor to the licensee for the use of intellectual property right.

For whom

Licensing is not for everyone and could backfire if not applied strategically. A common rule of thumb is to not approve the company if the licensor is in the same line of business as you. There are of course exceptions to this. But generally speaking, doing so would let a lesser rival offer a product that is as good as yours. The perfect use-case for a licensing model is where your company forms a tiny, but essential component of a business with an entirely different business model. Uber ‘s licensing of Google Maps is a prime example. Other common examples include the licensing of music for use in events or movies, and the agreement to use patented innovations in the manufacture of electronic products.

The overseas business enters into a licensing agreement with another company located in the domestic country, for a defined period of time. The two primary reasons for entering in the licensing agreement are:

International expansion of a brand franchise.

Need for commercialisation of emerging technologies.

Generally, a firm opts for license its products, when the firm holds that the consumer ‘s approval of the product is strong. It helps the licensee to differentiate the product from other products offered by the competitors in the market. Further, it also helps the licensing business in serving new clients at a low price.

Licensing Economics

The target of permitting an item and not building it yourself without any preparation is to reduce down expenses. Given this, there are two conditions where permitting bodes well. The first is with content conglomeration. Take organizations like Getty Images or Spotify – these organizations total substance from proficient makers . For instance, Getty Images offers around 20% sovereignty to picture takers who need to sell their photographs online through the webpage. The explanation authorizing for collection bodes well is on the grounds that the substance creation process is decentralized. It might be outlandish for organizations like Getty Images or Spotify to assemble their own database of substance without help from different makers.

The other example where this bodes well is the place there is ease for bring an incentive back. The explanation Uber licenses Map content from Google is on the grounds that it costs them less to get this data from Google as opposed to doing it without anyone’s help. Be that as it may, authorizing Maps from Google costs cash and the supreme costs increment with higher use. As such, there comes a moment that it bodes well for an organization like Uber to manufacture their own planning programming as opposed to authorizing it from an outsider.

Revenue Model

Authorizing your substance or item can be an extraordinary income generator for your business. This might be done either by charging the licensor for use or for income created. Charging for utilization is the correct methodology if the licensor is in a line of business that is not the same as yours. Here, your licensor is basically a buyer of your item and you may charge them either a fixed use expense or one dependent on utilization. In the event that your licensor is in a similar line of business as you, at that point charging them a level of the income is perfect. Along these lines, the licensee brings in cash each time their substance is sold by an outsider licensor.

Authorizing is a rewarding business opportunity in various business portions – including programming improvement and substance creation. Distinguishing the correct income model and picking the correct objective licensor will go far in building up a fruitful business.

Final Words:

final words

Be a lover – If you are troubled to present another item or administration, your customers will see that and they won’t accepting from you. Would you be able to accuse them?

Be totally aware of everything about the item or administration that you are selling – If you don’t have a clue about all the subtleties, who will know them?

Examination the market before deciding on any business opportunity – Is there a requirement for this sort of thing? Is your planning right? You can discover a portion of the vital information in business magazines you should peruse consistently.

Contact different business visionaries who have purchased a similar item from a similar vender – get some answers concerning their encounters. Did the merchant figure out how to keep his/her guarantees? Remember that it will presumably take a couple of years or longer before the outcomes can be practical.

Check if there is some preparation or class you can go to improve the chance of your achievement in accepting a business open door of your decision.

You ought to consistently counsel a group of experts before you settle on an official conclusion. A lawyer, business advisor or a bookkeeper should help you in evaluating a business opportunity you are going to put resources into.

About the author

Lavanya Singh

I am undergoing my MBA in Innovation and Entrepreneurship. I am also into Digital Marketing and Film Making. I like learning on the go.