3 Ways Technology Has Leveled the Playing Field for New Businesses

Below are three ways that advances in information technology have leveled the playing field for new businesses, and made it easier for small startups to exist among the established giants.

Niche Markets

In many cases, the “more is more” philosophy helped traditional businesses establish themselves and become a one-stop solution to loyal customers.  This is a strategy that worked well for Sears, Walmart, Target, and various other stores that pride themselves on carrying a little bit of everything.  Around the margins you’ll find big stores with narrower focuses, but similar mentalities:  Best Buy (electronics), Dick’s (sporting goods), and Pet Smart (pet supplies) for instance.  But the rise of the internet and the increasing expectations for customers to find exactly what they’re looking for, as opposed to something that happens to suit their needs, has opened the playing field to niche markets.

No longer do those providing goods and services need a large stock or massive building to help them reach customers.  Customers instead search for what they need online, and find it wherever it’s offered, regardless of the size of the vendor.  Etsy has proven itself as a great place for those who make hand-crafted or customized items to reach clients, Society6 allows artists to easily sell their originals and prints to buyers, and Kickstarter helps new and unique product ideas to come to life as long as there’s enough consumer interest to cover the cost of manufacturing.  All of these allow business to begin – and to succeed – on the micro level, with each sale leading to word of mouth and higher seller ratings, and little to no up-front financial risk.

Speaking of which…

Costs and Location

The overhead necessary for establishing a business has been reduced by technology.  Gone are the days in which every business needs a physical presence, which means you won’t need to rent or buy a location, pay to make it look appealing to customers, pay for extra product to keep shelves from looking empty, pay someone to keep everything clean, pay for lighting or plumbing repairs, or anything along those lines.  The financial barrier to entry is lowered substantially when you’re working out of your home.  Customers, in turn, are also freed from worrying about many things as well, such as finding your location, navigating traffic, waiting in line, or showing up at a time you’re closed.  It’s no wonder home-based businesses have caught on the way they have; it eliminates a lot of the frustrations on both sides of the transaction.

It’s important to make sure you’ve contacted your town or city administrators to obtain any necessary permits you may need to operate a business out of your home, of course, but, largely, the amount of startup capital you need is much smaller.  Additionally, you won’t have to worry about location, as shopping and ordering online has conditioned consumers to value service and quality over proximity.

Everyone knows Amazon is based in Seattle, but that doesn’t stop customers all over the world from ordering from them; what matters more to buyers is the fact that they can receive the goods they’re looking for at a reasonable cost within an acceptable period of time.  Actual location doesn’t factor into it as much, which means you don’t need to pay a premium to be in a prime spot along the highway; you can operate out of your own house and reach customers all over the world.

Plug-In Solutions

Another very helpful tool that the rise of home businesses has provided is the plug-in solution.  Because so many companies operate out of the home now, there’s a large network of support in place that allows owners to provide their customers with convenient solutions, without those owners needing to be well-versed in coding languages or HTML.

Plug-in solutions allow software to be added directly to your website, and these can range from impressive galleries of your products to shopping cart management options to a simple checkout feature.  (Paypal was an early and high profile example of the latter, and it was successful precisely because it was so simple for both businesses and customers to use.)  Live chat can be implemented for customers to ask questions, reviews from previous purchasers can be left directly on the product page, available items can be compared side by side and sorted by price or features…the odds are good that if you’ve thought of it, somebody’s built it.

In the early days of the internet, it was possible to run a business from home.  It also, however, required a deep knowledge of technology, how it worked, and how to code things to do what you want them to do.  It also, of course, required a technological savviness on the part of your customers, which was not something you could rely on.

Now, however, electronic devices are more versatile and easier to use than ever.  Customers can find you, and the groundwork has been laid by others to help you provide great service to them.

You can establish a customer base, no matter how niche.  You can get started without the amount of capital you would have needed 20 years ago.  And whatever services you’d like to provide your customers, your solution may only be a click away.

Is it any wonder home businesses have become so much more popular in the past few years?

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