THE IDEA

What unique skills/talents do you possess? What resources do I have available to me? What products/services are needed in my community?

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Make a list for each one of those questions, As you begin to study those lists, your business idea should begin to come into focus.

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You then to need to determine if your business is going to be service business or a product-based business. First, you need to understand the differences between the two.

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SERVICE BUSINESS

• This type of business generates income by providing services instead of selling physical products.

• A typical service business provides intangible services such as landscaping, cleaning, consulting, business advising, tree clearing service.

• Service companies don’t usually carry inventory.

• These businesses can be easier to run because there is no inventory and no cost of goods sold when it comes to accounting.

• Examples: Lawn care, hair dresser, barber, mechanic.

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PRODUCT-BASED BUSINESS

• A product-based business sells tangible products.

• A product-based business includes retail clothing, grocery stores, shoe stores, restaurants and bead stores.

• This type of company must maintain inventory.

• This makes accounting more difficult than service businesses.

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The main difference is that a product business sells physical, tangible objects, whereas a service business provides value through intangible skills, expertise and time. Keep in mind that the marketing techniques and costs vary when you're selling services versus selling products.