On-demand sharing economy vs starting a business
If you are thinking of starting a business, could the on-demand sharing economy be a stepping stone?
Just like some people rent in a new city to check it out before they buy there - test out your business idea before you make a more serious investment.
So what is the difference between the two?
Starting a new business generally requires you to:
Come up with a business idea
Develop a business plan
Determine your value proposition or service offer
Develop your website, business name, brand
Set up policies and procedures
Find your own clients and do your own marketing
Do your own administration such as processing payments
Pay the set-up costs
Have some cash reserves as you establish your customer base
The advantage of having your own business is the absolute freedom – you aren’t bound by someone else’s rules. And just as good, you own 100% of the margin – you don’t pay any commission to a platform.
The big disadvantage is the risk.
Like many people, you can use the on-demand sharing economy as a segway to starting your own business in the following ways:
To get your business ideas going while you are still working full-time, using a platform’s administration and marketing capabilities - essentially making your business resource-efficient.
To test out your business concepts in a low risk way with the platform’s existing customers. For example, if your idea is for a consultancy business, you can test out the market appeal of your niche. If it is for a food business, you can test out menu ideas.
To learn about your chosen market, customer expectations, service models and the nuts-and-bolts of what is required to build an end-to-end business.
To start earning an income straight away – most platforms transfer payment within 1-3 business days or on a designated day each week. Payment is to your bank or PayPal account.
To test out whether you like the work itself enough to do it full-time as well as the demands of small business life and its suitability for you.
For many businesses it’s not an either/or. Even after they launch their independent business, many businesses will still sell their products and services via on-demand sharing economy platforms. The reason is to boost their sales and attract more clients that they can cross-sell other products or services to.
If you would like help finding platforms that could be a good fit for you, arrange a phone call with me here.
We are always here to help.