5 Tips To Starting a Small Business Via the Sharing Economy

  Guest Writer: Dean Burgess, Excitepreneur

Starting any new business can be complex and bring on a wave of new questions. When you’re attempting to break into the sharing economy, though, these questions and concerns can be increased tenfold. After all, according to the World Economic Forum, the definition of the sharing economy is debatable. Plus, the rules and model for starting a new business within the sharing economy are completely different from any other business.

If you’re after a set definition, Investopedia defines it as “a peer-to-peer (P2P) based activity of acquiring, providing or sharing access to goods and services that are facilitated by a community based on-line platform.” Think Uber or Airbnb. To cut through the chatter and confusion, I’ve laid out these five tips for starting your own small business in the sharing economy.

1.  Get Your Supply Infrastructure in Place

While it might seem strange to start with supply instead of demand, businesses in the sharing economy rely on a steady, reliable supply to foster trust and drive up sales. After all, how likely would you be to use Uber if there were never any drivers willing to pick you up? Your very first step in starting your new business, then, should be fostering your supply community and providing training, if necessary.

2.  Create an At-Home Workspace

Even the smallest businesses need an area dedicated just to them. If you’re just getting started, it is usually most efficient to set aside space in your home for an office. Start by gathering all your necessary equipment.

Some small businesses might only require a desk and a computer to keep things running smoothly, but others might require more equipment depending on the specialization. The Balance suggests including a set of fireproof file cabinets for important documents. Once you have everything set up, establish office hours, and keep them. Hire a babysitter or enlist the help of friends and family if you have children. But, keep your office hours dedicated to your business only. This will help you avoid distractions and get work done.

3.  Take Advantage of the Existing Sharing Economy

Since your small business relies on the sharing economy, you probably know a thing or two about how the sharing economy works. However, did you know that there is a whole list of sharing economy businesses that can help get your company off the ground?

For example, TaskRabbit is a company that provides fully-qualified and vetted “taskers” to help with any task you might need done. If you’re in need of a one-time delivery man or a quick accountant, TaskRabbit can find them for you and allow you to continue focusing on your business. There are also coworking spaces where you can rent an office and run your small business while taking advantage of the perks larger companies often offer.

4.  Focus on Trust

The sharing economy relies on trust, so it is essential that you focus on fostering trust with customers. No one is going to use a car sharing service if they don’t trust that service to get them to their destination on time and safely. According to Entrepreneur, trust is often more important to a business than sales.

Building this trust can be done in many ways: you can implement training throughout your supply chain, cultivate a water-tight customer service experience, and ensure that you deal with any issues openly and directly.

5.  Streamline Payments

The internet has made collecting payments and buying things incredibly easy. Use it. Asking your customers to buy things using paper money will not only cost you sales, but can also make things needlessly complex within the sharing economy. How would you get the cash back to the company? What paperwork would your supply chain have to implement? How long would the payment be delayed? To avoid the risk of complexity, use the gifts the internet can provide.

Starting a small business in a sharing economy is very different from starting a “traditional” small business. The rules are different, and the results are different. While many of the principles remain the same, such as cultivating trust, being in the sharing economy creates new challenges and opportunities. It’s up to you to jump over the hurdles and take advantage of what this new world has to offer.

About the Author: 

Dean Burgess is fascinated by business-minded people, especially entrepreneurs. He loves to learn about the start of their business journey and where they hope to end up. He started Excitepreneur to explore entrepreneurship in depth, and to share the stories and lessons he learns.

Photo credit: Pexels

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