There are two main types of businesses, whether you start at home or out of it. Some people are better suited to one or the other, or you may find that your situation or budget dictates which you choose. Here is a brief look at each type of business.

 Service-based Business

Service include things that you do for other people. Your product is what you do rather than something physical. Some good examples of a service-based business include dog walking, personal assistant, tailoring, computer repair and house cleaning.

Service-based businesses:

• Often (but not always) charge by time, minutes, hours, month, etc.
• Tend to be less flexible, since you have deadlines and possibly even a schedule to keep.
• Allow you to work on more than one project at a time.
• Exchange time for money, meaning that in order to earn more, you´ll need to raise prices or hire more people.
• Usually deal with either menial tasks that no one wants to do or tasks that are highly specialized and few people can do.

Product-based Business

With a product, you are selling something that actually exists in the physical world. This is something that you make or purchase to resell. Some examples of product-based businesses include soapmaking, crafting to sell, baking, and electronics.

Product-based businesses:

• Charge by product, your profit is the price of the item minus the cost to you to create or buy it.
• Tend to be more flexible. For example, you can work on making candles while the kids are in bed or spend a weekend creating baby bibs to sell.
• It´s easy to stock up on products, so you can rest sometimes, too.
• Startup costs are usually higher because you need not only equipment but materials.

There are also cross-over businesses, like restaurants, that offer both service and products, but since these are not usually home-based businesses, we´ll leave those out for now.

Which business type is for you? Do you have a product-based business or a service-based one? Leave a comment and let me know!

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