How do you start a new business?

My posters for Bob’s Rent-A-Bike were crude but they attracted customers because I offered free delivery and my competitors did not.

This example shows why it is so important in any business to develop a unique business model. You shouldn’t start a business and try to follow what your competitors are doing. And you shouldn’t just try to “be better.” Instead you want to be different in a way that really matters to your customers. In other words you want to design your business around a true competitive advantage.

To design a business with a competitive advantage, you first need to evaluate your market, your target customers and your competition and then seek out new opportunities. Then, you want to put together a solid strategy and develop it into a complete business plan.

A good related business is bicycle repair. The demand is constant providing you with a strong, steady income. You could start by only taking on the easier repair jobs. I quickly taught myself how to do basic repairs when I had my bike rental business – it’s not that hard to do. Then for more complex repair jobs you could contract them out to other repair shops and keep a percentage of the repair price.

You could also try selling bicycles. If you are operating out of your house I would recommend you focus on buying and selling used bicycles. I found it difficult to sell new bicycles out of my home. But I discovered that I was often able to sell second hand bicycles for quite a bit more than I paid for them.