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.