How to Weave a New Kind of Company

Market research can help test your new business idea.

Trying to create a new kind of business takes preparation, innovation and often a large deal of risk. In essence, starting a different type of business involves assessing the consumer's needs and finding a way to meet them in an efficient and productive manner. A detailed business plan helps you determine if a new concept will be viable in the current market. As with any new business venture, the basic process of starting the company is the same.

Instructions

1. Evaluate the current market for the type of venture you want to begin. What are the common business models and structures being used? What are the internal organization and marketing approaches used by the most successful companies? What types of companies have failed recently in the market?

2. Determine which way your business can be different and therefore have the potential to carve out enough market space to be successful. This can include anything from offering a new product to a different type of business structure. One example of a new type of business approach is to provide suppliers of goods or raw products shares in the company. This makes the suppliers' profits related to the company's success.

3. Decide on the type of ownership of the business. The main examples include sole proprietorships, partnerships, corporations or limited liability corporations. Each type of structure has its own advantages.

4. Draft a business plan. This is not only necessary to determine if your new kind of company will be feasible and profitable, but is also a necessary document to show potential investors. Be as detailed and as realistic as possible. Consider conducting market research to make estimated values more accurate and better assess your potential costs and revenues.

5. Seek funding for the business. This can be in the form of investors or lending institutions. It may be several months to several years until the company turns a profit. Make sure you have secured sufficient start-up capital to get the company through the entry phases into the market.

References

• Business Week: Weaving a New Kind of Company
• The Business Plan: A Strong Business Organization Structure is Paramount to Business Success
• StartupNation: Select a Business Structure

Resources

• Bruce Eckel: Inventing a New Kind of Business