“A good businessman is a good middleman” has been a longstanding principle in running a company. But ever since the internet, the economy has been shrinking down to your laptop. The result has been a proliferation of brave new economic models – the gig economy, the peer economy, the access economy, the on-demand economy, the collaborative economy. Which one are we in? Well, all of them. This article will look at another newfangled term to describe the transforming market: the sharing economy. For advice on how to start a small business via this sharing economy and tips on which mistakes to avoid, read on.
Although the term is still evolving, “sharing economy” seems to designate peer-to-peer transactions on online platforms. For instance, Rent the Runway lets anyone download their app, scroll through their catalog, rent clothing for a small price, and return it for free. People still buy clothes at stores, but an online service like this remains popular because of its convenience and low price. You can also rent cars, lend money, find roommates, get freelance work, and swap everything from textbooks to garden tools to parking spaces.
If you’re thinking about starting a business in the sharing economy, you’re not alone. Since 2010, venture capitalists have invested an estimated $23 billion toward the sharing economy market. There’s a lot of competition out there, so figure out how much supply there is in your area. (Remember Rent the Runway? If you’re in a small town with fewer people willing to open up your closets, you may be out of luck.) Like any company, screen and interview your applicants extensively. Also, make the payment process transparent so there’s never an issue with money. Finally, create a website with user profiles, customer Q&As, and discussion boards to knit together a community that feels connected around your brand or service.
The sharing economy may be setting new trends, but your company will probably still succeed or fail depending on old-fashioned business rules. These include hiring trusted professionals, pricing your product just right, retaining legal counsel to draw up contracts, and keeping up with new technology or market predictions. Many business owners also suggest throwing off any sense of perfectionism that you harbor. You may have a great idea, but if it takes forever for you to launch, no one’s ever going to know about it.
Ditching the boss in the corner office for your own business sounds exhilarating – at first. Then come the bills, the insecurity, the 80-hour weeks, and, at last, the nostalgia for your old boss. Before you take on the challenges of starting a small business, ask yourself if you have the traits commonly associated with entrepreneurs. These include tenacity, optimism, self-discipline, an eagerness to improve, and the ability to gauge between healthy and unwise risks. People who don’t run their own business can often enjoy a better work-life balance. The tradeoff is that they have to contend with that aforementioned boss in the corner office. So whatever choice you make, be sure it’s right for you and your lifestyle.
Bartering has been around forever, but in the last 30 years, the use of apps and social media has largely cut out the traditional business function of a third-party intermediary. Think of it this way: You are the new economy. The upside with that is it gives you the freedom of a freelancer and the convenience of carrying around the whole market on your phone. The downside is that businesses seem to rise and fall more quickly, and finding a niche in all these new economies can be difficult. Still, the sharing economy seems here to stay. Our advice? Learn all you can about it to figure out how you can share your talents in it.
Thank you and may God bless you!
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