How to Determine Your Product Line and Business Type – You can now focus on what specific type of product or service you want to sell. Some of the factors given for consideration will help you come up with a great idea for a product. What specific fields are you interested in? Can you apply your skills, hobbies or work experience to this field? Below are the broad types of product and service lines:
You may choose to manufacture your own product, either for the mass market or for specialized or individual demands.
Canned goods, wooden or plastic toys, and ready-to-wear garments are examples of goods produced for the mass market, while precision instruments for industrial use, and made-to-rder furniture are examples of specialized products.
You may choose to provide services. Service enterprises include repair and maintenance shops, printing and machine shops, and food retailing and catering establishments.
Beauty parlors, dress and tailoring shops, recreation centers (bowling alleys, billiard halls, badminton courts) and entertainment businesses (theaters, videoke parlors, bars and pub houses) are also considered service businesses.
The sunrise Information Technology (IT) industry is largely service. Think call centers, internet cafes, computer hardware and software shops, and business solutions programming companies.
You may decide to perform only one or two operations in the total manufacturing process. If so, you are not, strictly speaking, a “manufacturer” but rather a “process” enterprise. The activities you perform can be initial operations on raw materials (milling, corrugating, sawing or cutting), final operations (finishing, assembly, packing or binding), or skilled or precision operations (embroidery, testing, woodcarving).
If you choose to be a subcontractor, you will undertake subcontracting work for other enterprises, usually bigger ones. Big companies sometimes subcontract the manufacture of components, supplies or other specialized operations to smaller shops because the quantity required is not cost effective for their high-capacity operations. Many big companies also find subcontracting a cheaper and faster way to manufacture products. On the other hand, you, as subcontractor, are assured of a market for your products.
You can probably avail of technical and financial assistance from your principal (the big firm), too. There is, however, a drawback to subcontracting: you may tend to rely on only one or two partner firms to stay in business.
Source: Bureau of Micro, Small and Medium Enterprise Development