When you first decide to start a business, it is largely confined to two main areas – products or services. Of course, there are the businesses out there which cross boundaries and deal with both, but in this article, we will treat them as a clear choice you are making. In this blog post, we will look more closely at the pros and cons of each approach so that you can decide if a product or a service business is the one that is going to be right for you.


Difficulty Level


Most businesses started these days are serviced-based, simply because this is the easier option of the two. You can start a service business from home with not much start-up capital, but a product company involves design, prototyping, manufacture and distribution. If you are going for the latter choice, you need to have a clear idea of what you are doing including information like the truths about supply chain management. However, the product industry does have its potential advantages as we will see in the next section.




Scaling up a services company tends to be much more difficult than a product business. If you are the one providing the service, there is only so much time that you have on your hands, but if you have a clear market and demand for your product, you could find that it takes off very quickly indeed. A services business is very much based on hiring people and talent who ensure the growth of your company. However, the internet has also helped services businesses grow much quicker – just look at the likes of Facebook and Google.




When it comes to customising a services business, this tends to be much more straightforward than a product company. However, every time you release a new product, you need to put in that same level of investment that we talked about at the start when it comes to development and creation. Having said that, once you have developed an initial following and enthusiasm for your first product, you should hopefully be able to pass this onto any future ones.


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Processes and Errors


In terms of simplicity, service businesses have the edge when it comes to fixing processes and errors which occur along the way. If a product has a problem, this could involve an expensive recall process while the error is fixed. Otherwise, it could involve a new and improved item being created in the future.




As we have already mentioned, starting a product business is almost inevitably going to be more costly, but if you make a success of it, the potential is huge. A large number of the world’s biggest brands sell products, and there is a lot of potential here. Service companies are generally cheaper to start, but they are usually more difficult to make big profits from.

Hopefully, after reading through this article, your decision whether to start a product or a service business has become that little bit clearer.