How To Plan Your Business

Determining Your Product/Service Line

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 field are you interested in? Can you apply your skills or background work experience to this field? Provided below are the different types of product/service lines:

1.Product Industries - 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 of made-to-order furniture are examples of specialized products.

2.Process Industries - 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 (fishing, assembly, packing, or binding), or skilled or precision operations (embroidery, testing, woodcarving).

3.Subcontracting Industries - If you choose to be a subcontractor, you will undertake subcontracting work for other industries, usually bigger ones. Bigger industries sometimes subcontract the manufacture of components, supplies, or other specialized operations to smaller shops because the quality required is not viable for their high-capacity operations. Many big companies also find subcontracting a more low-cost and faster way of manufacturing products. Also, you are assured of a market for your products. You can also avail of technical and financial assistance from the big companies. One drawback of subcontracting, though, is that you rely on only one firm or two for your survival.

4.Service Industries - You could choose to sell services. Service enterprises include repair and maintenance shops, printing and machine shops, and food catering establishments. Beauty parlors, dress and tailoring shops, recreation establishments (bowling alleys and billiard halls), and entertainment enterprises (theaters, discos, and pub houses) are also considered service businesses.

Although falling under the broad classification of a service enterprise, you may consider the trading business a fifth option. The most common type of trading enterprise is retailing.