A good question to ask oneself before building a business is if they want to build a local or national business. Both of these choices have consequences from those particular choices. Therefore, it makes sense to ask this question before trying to open a business. Every angle needs to be considered before choosing the right business structure. However, it is true that most people do not think about this fact before they open their business. This is very unfortunate as this one decision can affect how much money that person will make in the future or at least how successful they will be in that endeavor.
The first question to ask oneself is what the definition of success is as it relates to the endeavor. In general, I personally believe that building a local business is a starter business. This is because the market is much smaller for a local business. There is a finite amount of people in a market who can do business with that particular business. Fortunately, there are also a finite number of people in the competitive market space. This means that a person can get a lot of experience running a local business without the inherent pressure of competing with large corporations most of the time. This makes it an ideal place for a beginner entrepreneur to cut their teeth before opening a bigger business.
Obviously, the problem with this is that the market is finite and therefore there is also a finite amount of money that can flow to the business. It is also true that a business can only capture a certain amount of business from the target market. This percentage expressed shows the potential of that business to make money in a year. Therefore, most business people find that they cannot make enough money to achieve their dreams unless they open a franchise location or go national with their particular product or service.
A national business does have many more people inside of it however, the competition is greater and the costs of doing business are greater. Therefore, it does not make sense for a person who is just beginning to open a large business because that large business could eat most of their money before it becomes profitable to run that particular business. There are people who open big businesses and do well right from the very start however; this is the exception and not the norm. Therefore, it makes a lot of sense for a business owner or a business person to open a local business to do business before trying to open a major market.
In conclusion, the best thing to do for a beginner is to open a local business if it all possible. In all actuality, it is best for a newbie beginner entrepreneur to have its little overhead as possible. However, the local competition is far less than a national niche. Therefore, most the time it would make sense for a person to open a local business before a national business as long as there overhead was much lower.