Key advantage in business

Employer advantages

When organizing your business, it’s essential to clearly understand what sets you apart from others. Why can’t the people who work for you do the same thing on their own? Why do they pay you by giving up a portion of their labor? What is the service you provide to them, and what are they paying for? Such advantages can include:

• Initial capital. Its presence in the form of money, equipment, real estate, patents, licenses, and other assets. Whatever has been said above, the necessary initial capital often determines the entry threshold for new market participants. It’s not that it doesn’t exist – it can be borrowed – but rather that you, unlike others, are willing to bear the business risks associated with how you plan to use this initial capital. The people working for you, by contributing part of their labor, essentially pay you for the risks you take and for the “virtual credit” that allows them to use your capital. You are willing to take on these risks because you know something that others do not. For example, you have
• qualification that gives you self-confidence. You are an expert in your field and can anticipate all possible risks instead of guessing. Qualification allows you to provide your employees with information for which they are also willing to pay with part of their labor. Additionally, qualification enables you to break down production into a series of simple operations that can be assigned to less skilled personnel. In other words,
• Organizing a business. The services for organizing and coordinating the work you do are also paid for by your employees. Essentially, this involves hiring a dispatcher who handles all the hectic organizational tasks, connects the stages of production, aligns production with sales, and organizes sales. You also hire the non-production part of your company to keep the accounting records in order and manage relationships with tax authorities. Additionally, you may hire lawyers, HR specialists, security personnel, carriers, and so on, as needed. These people also pay you for the certainty that they know what they will be doing tomorrow, as you are a “perpetual” client for them, and that comes at a cost. Naturally, your business organizer services are worth more the higher your qualifications as a manager. In other words, the better you are as a manager, the more money you make. To start, you should understand management better than your employees in order to offer them your services. When we learn to drive a car, we first study the theory, and then, with an instructor sitting next to us, we begin to drive carefully. Think of having such an instructor in your business before you make mistakes you will later regret. And such foolish mistakes will happen. Just ask anyone who has started their own business.

Market advantages

The same understanding is necessary in the market where you plan to operate. How does your company differ from other similar ones? The list of potential advantages is not limited, but I will mention just a few possibilities. This is your business, and you need to understand what exactly you will offer your clients. For example:

• You are the smartest and have come up with a brilliant idea, and you have a little time before everyone around you realizes how you are making money and starts doing the same thing. It’s possible that you are doing something similar to a large monopolist, but you are more agile and can offer your service before the bureaucratic machine of the monopoly gets into gear. In the early days of the internet, the main providers were small private companies that were willing to operate in a nascent market where monopolists did not see significant profits. They were agile in relation to customers, competing and shaping customer expectations for the product. However, as the market matured and substantial money began to flow, the concept of the product became standardized, and large telecommunications companies stepped in with their extensive infrastructure. It became time for the smaller providers, or rather, those who had now become small, to either exit the market or focus on niche and corporate solutions—providing server space for clients, hosting websites, organizing virtual private networks, and so on.
• You have an established supply channel for a product similar to what’s available on the market, but at a different price and/or with different quality.
• You have, as it turns out, a “First and Most Important” client. Everything is capitalized. You don’t have to go through the stage of searching for clients without any money, and you can develop your company’s infrastructure using a guaranteed or temporarily guaranteed cash flow.
• You are either brave (or foolish) enough to break the law, and the imports you organize are smuggled, or the goods you produce are counterfeit, or you have, not without bribes, managed to open some doors in regulatory, supervisory, inspection, or enforcement agencies. I am not advocating for breaking the law. However, winners are not judged, and as is well known, the first million cannot be earned honestly.
• You have certain geographical advantages – your pharmacy is simply the most convenient for the residents of the surrounding houses, or your notary office happens to be located in a space where real estate transactions are registered in the state cadastre.
• Existing businesses can have historical advantages. Traditions may have developed, or you may have a circle of old acquaintances—people who trust you more than others or with whom you find it easier to communicate.
• Your product or service is of higher quality compared to similar offerings, either due to a new business process or new technology. For example, a courier delivery service is better than the postal service. Or your auto repair shop has equipment that is not yet available in your country and is necessary for certain types of work.
• Or you are the holder of a patent based on which you are offering a new product or a product with improved features.
• And so on.

You should start your business only with a clear understanding of what makes you better than the rest. This unique quality will form the basis of your offering to clients. Of course, you shouldn’t state it outright. Your clients should simply “buy” your advantage and want to pay attention to it.