In order to understand what type of business you would like to build, it is important to know what types of enterprises there are in the business spectrum. They are the enterprises of different sizes, and not all of them can be identified as business. Some of these entities should rather be called “a job” or “a hobby”, but not business. The entrepreneurs should define where they really are in terms of costs of their business and the profit they make. This will allow them to choose the direction to achieve their goals.
If the enterprise is truly a business, this entity is able to sell goods or services. Its existence does not depend on any person in particular. For instance, if the owner of the true business becomes ill, it may suffer a little bit, but will still exist. This kind of scenario is good for all reasons. It allows the entrepreneur to take care of the business without actually working in it. The owner can rest and take a vacation, scale the business and finally sell it and return everything invested in it.
Small business deriving from hobby is another type of enterprise in the business spectrum. Usually people make little money doing this type of work. It is around minimum wage and less than a five digit figure every year. The most important aspect of this job is not to be tricked into investing much money in its development. If you spend too much on inventory and the design and promotion of your website, you will hardly have an opportunity to recoup your expenses, let alone get profit. This type of hobby-like business is good to make some pocket money, but not more.
Taking this type of job to a higher level you will likely get a job-business. Self-employed entrepreneurs and small businesses with a little number of employees fall into this category. Many of job-businesses let one earn a good salary, but sometimes this does not happen. If the owner of such a business dies, the business will stop its existence. This is not what most people want. The goal of business is earning more than investing, and more than one can earn working for somebody else. That is to say that earning just a small surplus is not worth taking a risk and starting a business. The other drawback of this type of business is that the owner usually works long hours, his job is stressful and he gets to do the things that he does not like. For example, he may have to do marketing and take care of bookkeeping.
So it is the best idea to take your business to the highest level which lets you earn profit while someone else does everyday work.
In order to understand what type of business you would like to build, it is important to know what types of enterprises there are in the business spectrum. They are the enterprises of different sizes, and not all of them can be identified as business. Some of these entities should rather be called “a job” or “a hobby”, but not business.