Finding Alternatives to Failing Traditional Business Models


A whopping 99.9 percent of American businesses are considered small businesses, meaning they have fewer than 100 employees. But while that number may sound promising to aspiring business owners, launching your own enterprise is far from simple. And with traditional business models becoming more outdated and difficult to implement with each passing year, the American dream of starting your own business seems to be slipping away.

Luckily, new business models and tactics still make it possible for anyone to become an entrepreneur. Keep reading to learn what it takes to launch your own business today and why you need to leave old methods behind.

The Struggle to Attract Employees

Starting a new small business using the traditional business model is rapidly becoming impossible. As recently as just a few years ago, a small business owner might have taken out a loan, rented a retail space, purchased inventory, and hired a few employees. But now, with increased demand for higher minimum wage driving the cost of even unskilled labor up, it’s getting harder and harder for small businesses to afford employees. If they are able to afford paying their employees, they may be unable to afford offering benefits, which can make it difficult to attract employees.

Experts also predict that as little as a 1 percent increase in the average wage can lead to a drop in employment between 0.3 and 1.0 percent.

The Race to the Bottom Line

With the cost of hiring employees going up, small business owners are forced to cut costs in other areas instead. Whether that’s through lower quality goods or fewer employees — placing increased strain on the business owner and any employees they do keep — the effect is felt throughout the business. Outsourcing labor in new business models not only means lower wage costs and no need to provide benefits, but also the chance to hire workers for every part of a business’ operations.

Hiring freelance workers isn’t without its challenges. Finding reliable workers with the skills you need can be difficult when you aren’t interviewing in person. Riding the line between low-cost, but unskilled and potentially non-English speaking employees with more expensive skilled freelancers who may be making more than $100,000 a year through their work is a must for small business owners.

The Danger of Restricting Autonomy

Avoiding the pitfalls of the traditional small business may mean using new, more autonomous models, such as outsourcing freelance work or giving your employees the chance to work from home. By doing this, you not only convey your trust in them, you also allow more flexibility in their daily lives. This often translates to fewer sick days and less PTO taken and, in turn, increased productivity.

But remote work isn’t the only way to deviate from traditional models. Trusted direct-selling companies such as Amway embrace autonomy by allowing independent business owners to choose their own products. If you’re thinking, “Is Amway a pyramid scheme?” you can get your answer from Amway itself.

The Draw of Owning Your Own Business

Owning your own business is a chance at financial freedom and the opportunity to be your own boss. But trying to start a business using traditional business models is a mistake. The race to the bottom, the increased cost of labor, and the difficulties of finding high-quality, low-cost outsourced labor contribute to a large number of small businesses failing within just a few years of operation.

If you don’t want your business to fall into the 20 percent that fail within their first year of operation, you need to find modern business strategies and models that will give you the greatest chance at success.



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