Archives for December 2018

There are nearly 30 million small businesses in the U.S., with more popping up daily. If you’re interested in joining this club, you need to start with a great idea. No matter what your interest, skills, budget, and circumstances, there’s a perfect business out there for you.

Business Idea Articles

Below, you can find tons of ideas to get your entrepreneurial journey off on the right foot.

Business Ideas Based on Interest

Your favorite hobby could potentially lead to profits. There are plenty of entrepreneurs who are starting hobby businesses and actually turning them into full-time gigs. Here are some options for businesses that may align with your interests.

Physical fitness can actually lead to a more successful business, no matter what industry you work in. But if you want your actual business idea to keep you active on a daily basis, there are plenty of exciting opportunities that may align with that desire.

Business Ideas Based on Lifestyle

More than half of small business owners are 50 years of age or older. But there are opportunities out there for every member of the family. No matter your age or current situation, here are some business ideas to consider.

You can launch a small business in any state or location. But your location or circumstances may have an impact on the type of business you start. Here are some ideas for businesses you can start based on your particular circumstances.

Business Ideas Based on Budget

About 82 percent of business startup funds come from the entrepreneur themselves, or their family and friends. That usually means you need to keep things on a pretty tight budget. Here are some business options that don’t require a lot of startup capital.

Where you run your business can make a big impact on your budget. About 69 percent of U.S. entrepreneurs start their businesses from home. Here are some business ideas you can start in your house or in other inexpensive locations.

Business Ideas Based on Skills

Research has found a handful of qualities that most entrepreneurs have in common. But there are also some more unique qualities that can help you stand out from others. Here are some business opportunities that may play to your natural strengths.

Then there are skills you can hone over time. There are tons of online resources where you can learn new skills and gain training that can be useful in running your business. Here are some ideas to help you make use of those skills you’ve gained over time.

Key Business Idea Resources

Looking for more info? Check out these key resources that could help you get your new business idea off on the right foot.

Photo via Shutterstock
Photo via Shutterstock

When Amazon, Berkshire Hathaway, and JPMorgan Chase announced a new alliance in early 2018, the partnership turned heads. Three companies, giants in their respective industries, were going to pool their resources and work together. The new venture’s goal: targeting waste in the current healthcare system and improving patient service, initially for those covered by the three companies’ health insurance policies, but with the potential to expand.

Partnerships between businesses have a long history and come in many forms, including strategic alliances and joint ventures. The Amazon–Berkshire–JPMorgan deal shows how companies today, responding to technological disruption, geopolitical uncertainty, regulatory overhaul, and demographic shifts, are pushing such partnerships beyond their traditional limits. The aim is often to bring together expertise to expand the companies’ reach, drive growth, and cope with rising competition. For example, Toyota has invested more than US$5 million in a joint venture with Microsoft that uses the tech company’s cloud computing platform to expand connected car services. Starbucks and Nestlé finalized an alliance in August 2018 through which the latter will sell Starbucks packaged coffee in markets around the globe.

One thing is clear from these and other recent partnerships: Few companies can afford to follow their previous deal blueprints if they want to respond to the disruptions and risks in today’s markets. More important, the traditional lines between industries are blurring, with consumers increasingly expecting goods and services to be interconnected, and businesses seeking to make their supply chains more efficient and effective.

Why a Partnership?

A recent PwC analysis of more than a quarter-century of global data on alliances and JVs shows we’re in another period of upswing when it comes to those partnerships. The combined number of alliances and JVs has increased in the past two years and is now at its highest level since the start of the century.

A strategic alliance is an agreement between independent organizations to share resources, knowledge, or other assets. Partners coordinate their actions to pursue mutually beneficial goals while maintaining their autonomy. Each company gains a new business opportunity, be it increasing efficiency, expanding into a new market, capturing more market share, or some other type of growth. A joint venture takes this arrangement a step further, with companies pooling resources to create a separate business entity. JVs are stand-alone enterprises that often share resources with parents, and they’re typically more involved and complex than strategic alliances.

Mergers and acquisitions remain the most common path for companies pursuing inorganic growth. But alliances and JVs provide a way for a company to supplement internal assets and capabilities with access to needed resources, such as distribution channels, capital equipment, and intellectual property, with less investment and risk than the typical M&A. In addition, alliances and JVs can often be executed more quickly than M&A.

Our research found that the use of JVs and alliances varies by industry. Since 1990, asset-heavy industries have generally favored JVs over alliances, because creating separate structures allows the partners to best govern their investments in real assets. These sectors include industrial, consumer and retail, automotive, and energy and mining companies. Alliances, however, have tended to be preferred by information-heavy industries, such as IT; pharmaceuticals; and entertainment, media, and communications businesses. In these sectors, the best way to govern the flow of information has been through contractual structures that don’t require joint ownership of physical assets. IT has seen the most alliances over the past quarter-century, and the pharmaceuticals industry is second.

Further evidence of the rise in popularity of alliances and JVs comes directly from company leaders. In PwC’s most recent global CEO Survey, 49 percent of executives said they were planning a new strategic alliance or JV in the next year to help drive corporate growth or profitability. That was more than were planning new M&A activity (42 percent), outsourcing (21 percent), or a business sale or market exit (16 percent).

Companies are also using alliances and JVs to explore growth outside their home countries. Unlike M&A or greenfield investment, an alliance or JV can allow a company to get experience in a particular market before considering a more substantial investment. Although the overall number of cross-border partnerships hasn’t grown in the last quarter-century, activity in individual nations has risen and fallen. Japanese firms accounted for more than 25 percent and China-based companies less than 15 percent of early 1990s alliances and JVs. In this decade, however, Japan’s share is less than 10 percent, while Chinese companies are involved in nearly half of all alliances and JVs. The partnership activity of U.S. and European companies has held relatively steady as a share of the total during the same time period.

In a 2017 PwC survey of business leaders in 21 economies that make up the Asia-Pacific Economic Cooperation (APEC), 71 percent said they expected to make greater use of strategic alliances to secure a foothold in foreign markets. If the past is any indication, companies will use alliances and JVs to navigate the modern challenges of globalization. For example, if M&A is tested by new regulations, alliances and JVs may fill the gap.

Working across Industries

Perhaps the greatest potential for alliances and JVs will come from partnerships that involve companies in different sectors, such as the aforementioned Amazon–Berkshire–JPMorgan deal. For some companies, a full acquisition in a different industry may be too big a commitment. An alliance may allow them to test the waters with less exposure. Executives can place a bet that gives their company access to something new or complementary. If it doesn’t pan out, the company can discontinue the partnership instead of being saddled with a subpar acquisition.

The rise of cross-sector alliances mirrors the trend in M&A, where there has also been a rise in cross-sector transactions — but with alliances and JVs, the trend is even more pronounced. We found that since 2010, six out of 10 alliances and JVs have involved companies in different industries, compared with about four out of 10 mergers and acquisitions. Much of today’s cross-industry collaboration is driven by the need for traditional companies to adopt new technologies, or to react to challenges posed by new technologies. That leads car companies to ally with software companies, media companies to join with communications companies, and many other businesses to seek ways to learn and exploit the emerging tools of sophisticated data analytics.

The most common cross-industry trend in our data is the tendency of firms in technology to tie up with firms in other industries. The evolution of computing power, sensors, batteries, and miniaturization has left few industries untouched. These trends have caused even the most well-established companies to look outside their traditional boundaries for innovation. It has led them to set up tech incubators and internal VC arms and to invest in teams that manage alliances.

Cross-sector alliances can take any number of forms. Consider the evolution of mobile phones. As phones became smaller and personal digital assistants were developed, manufacturers and carriers formed partnerships. The arrival of smartphones brought apps and new ways to consume content, leading to other deals. Now we see alliances such as that between T-Mobile and Netflix, with the former gaining a content stream for its mobile customers, while the latter gets access to a new group of subscribers.

Elsewhere, Japanese carmakers and energy companies recently teamed up to build fuel stations for hydrogen fuel cell vehicles, following a similar effort in Germany. Other aspects of the automotive world, such as autonomous vehicles and ride sharing, could invite alliances with insurance companies. Meanwhile, insurance could be a factor in healthcare alliances, as mobile technology and virtual reality change traditional data collection and delivery of care.

The Evolution of a Deal

An alliance may be established and remain just that — two or more companies sharing resources, working toward a common goal, and, ideally, reaping mutual benefits. But it’s also possible that an alliance will evolve into either a different type of partnership or a more traditional M&A. In many cases, a company’s inorganic growth strategy will include a mix of deals, allowing its degree of investment and level of risk to be fluid in each case.

Of course, in some circumstances, the preferences of one or all partners will mean that either an alliance or an acquisition is the only option. But past deals have shown how a relationship can change. The ability of deals to evolve over time can be especially valuable when a business wants to consider entering a new industry or region. If an initial alliance or JV proves fruitful, the company could decide to make a stronger commitment and explore full ownership of the venture, or even a merger.

That’s what happened when the Walt Disney Company ventured into computer-animated films. Pixar was an independent company when it made a deal with Disney in 1991 to produce computer-animated feature films. The first, Toy Story, was released in 1995, and Pixar held an IPO that same year. The two companies continued to work together, and although the relationship was contentious at times, Disney’s strong interest — buoyed by a string of successful films — ultimately led it to acquire Pixar in 2006 for about $7.4 billion.

An alliance can be the tip of the spear when it comes to exploring a new path to growth. High valuations have tested some potential buyers’ willingness to go through with certain acquisitions, fearful the deal won’t deliver an adequate return on investment. But alliances and JVs have proven to be an alternative that provides access to a new market in the short term and keeps the door open for a firmer commitment down the road.

Whatever the path of the partnership, success usually hinges on trust and good management. Building trust early on is important in managing an alliance or JV. It can enable partners to set big long-term goals while celebrating small wins along the way. Companies that manage partnerships well also design agreements that are flexible, coordinate planning and budgeting with each other, and follow strong governance processes and principles. When partners work to be agreeable, collaborative, and responsible, alliances and JVs can thrive.

Finally! You’ve made the choice to put your company’s name on physical items. Great idea, but how will you get it done when you’re unsure how to even begin? You could ask your cool entrepreneur friend who’s done it. Her T-shirts rock and her startup is new. But having gotten no email reply in weeks, you guess she was just too polite to tell you to Google it.

There are Several Routes You can Take, but are They Right for You?

You’ve probably also failed to consider some of the other factors involved in handling creation of promotional items — stuff like minimums, hidden fees, physical space for store inventory and, oh yes, the big one — shipping. If shipping turns into a frequent task, nobody at your small business is going to volunteer to do it, especially in a startup culture.

Small Business Trends emailed Davis Siksnans of Printful to find out how his company uses technology to help you design and sell various items with a one stop experience. This includes not needing to do any boxing or shipping with your own hands, or burdening an employee to do it. The company says it will print and ship everything under your brand with custom labels, pack-ins, and other branding options.

Siksnans’s obsession with tech began when he saved enough money to buy his first Macbook at age 13. A few years later he began his career working in IT and project management at Draugiem Group, one of Latvia’s pioneering tech companies. As the CEO of Printful, he’s passionate about ecommerce and being part of the industry’s growth.

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Small Business Trends: How does Printful help companies? What category are you in?

Davis Siksnans: Printful is a drop shipping, fulfillment and printing company founded by myself and my colleague Lauris Liberts. In the beginning we offered just three types of products: t-shirts, posters and canvas. Today we do sublimation, embroidery, screen printing and more on thousands of items for over 900,000 business customers. We’re happy to say we’re on pace for over one million registered users by the end of 2018. We feel we offer the most reliable, seamless service for small e-commerce businesses who need to make and ship custom merchandise without ordering mass quantities at a time. Our customers include niche entrepreneurs and solopreneurs too.

Small Business Trends: Let’s talk more about that, because I know you regard solopreneurs as a trend.

Davis Siksnans: Millennials in particular are seeking more custom apparel now, and the market share of name brand companies — such as Abercrombie & Fitch — is decreasing. Solo entrepreneurship is a growing trend. Individuals who are small niche businesses on platforms like Etsy are all over Instagram and other social media. We love catering to these individuals.

Small Business Trends: Why did you choose to get into this space?

Davis Siksnans: The idea for Printful actually came out of another business Lauris started called StartupVitamins, which sells motivational posters, clothing, and other items for the entrepreneurial community. The fulfillment partners we were using back then weren’t very reliable; for example, they’d drop orders or take weeks to fulfill them, or run out of materials and not tell us. That all left a negative relationship with our buyers. They also lacked an API, which meant we couldn’t submit orders automated from our system.

So we thought if we can’t find a company that fits all those criteria, we should start one ourselves. Our thinking was “If we have this need as StartupVitamins, then there must be thousands of stores out there with the same exact need.”

Small Business Trends: What kinds of printing are most in-demand right now? It’s easy to forget you grew this much out of a “motivational posters” brand.

Davis Siksnans: When we started the company, we offered three products: posters, canvas, and t-shirts. We still print tons of those products now. T-shirts are our most popular item, and posters come in second. However, we also offer a lot more options for customizing them. For example, in 2014 we started offering sublimation, or all-over printing, for t-shirts, tank tops, tote bags, and a lot of our other popular items.

We’ve also expanded to offer products like leggings, dresses, skirts, and pillows that are cut and sewn in-house. These cut and sewn items are now our third most popular product and then hats are fourth. Really, we’ve seen an all-around increase in demand for printed apparel, especially from younger people. They’re not buying as many items from name brands – they want to stand out, and increasingly that means buying from smaller brands or buying custom-printed products.

Small Business Trends: Can you talk more about how automation has been an ingredient to success? And what success tips do you have for foreign companies who want to serve the U.S. market?

Davis Siksnans: Absolutely. One of the most important steps has been integrating our services with the e-commerce platforms our customers use. Our biggest partnership is with Shopify, which is used by thousands of active sellers worldwide. We provide automatic order fulfillment for Shopify stores — this means sellers don’t have to coordinate any of the logistics when a customer makes an order.

In 2015 we rolled out our push generator, which allows sellers to publish the product mockups they create on our website directly to their stores. Last year we took another huge step by launching our warehousing and fulfillment service, which is a way for customers to store their entire inventory in our warehouses and let us handle all the fulfillment.

We’re always working to become even more of a one-stop shop for sellers so they can spend as little time on printing and fulfillment as possible and focus on growing their businesses.

One of the most important early things that Printful prioritized was building trust with American consumers. In my personal opinion, a lot of companies attempting to enter the U.S market forget that American consumers are not used to seeing a Baltic address, or Baltic languages. So we hired American, Canadian, and Australian Latvians to provide an authentic and accurate writing style. You’d be surprised how important it is to use the correct punctuation or put a dollar sign in the correct place when referring to prices. We still focus on hiring great communicators. We made sure our company invested in familiar U.S.-based payment methods, such as Amazon Pay, PayPal, etc. We made sure we had a U.S. based address. All these small steps increase trust with American consumers and helped prove that we’re legitimate and trustworthy.

Images: Printful