
Commodity Hell
The commodity business is hell. Most small businesses are specialty contractors in a commodity business. How do you know it is a commodity business? You will know because you have no control over the price. If you raise your prices much, you will not get any business at all. The way for a commodity business to compete is on price. Everyone is pressured to reduce prices, to get work, and so nobody makes much money.
The other way to know if you are a commodity is how difficult it is for someone to compete with you. If someone only needs basic tools and a little bit of training, it is a commodity business.
A business with high ground will be difficult to duplicate. There will be technological advantage that may have taken years to complete. Someone can't just come in and easily take you over.
| |