We speak with tons of individuals who are trying to finance equipment for replacement business, and a part of the financing process is determining whether or not the firm features a stable foundation.
The solution is “no, not really” in some circumstances, although the business potential is occasionally rather intriguing.
Whether or not a firm features a realistic possibility of success is decided partially by the owner’s talent and determination, but the foundations of the business are also important. How stable is 3D ultrasound as a business?
Is 3D Ultrasound a Profitable Business?
I was a 3D ultrasound customer a couple of years ago, and I was amazed that even during a recession, there was a gentle stream of consumers coming in and out-which while we came for a $79 package, we walked out spending over $200 after a quarter-hour in the room and with about $12 worth of materials.
Analyzing a corporation’s proposal in terms of Porter’s 5 forces may be a useful technique to gauge whether it has real potential. When assessing a company’s strengths and shortcomings, you want to consider the following “forces”:
Buyer Power Supplier Power
Rivalry between competitors
Substitution Threat
New Entrants as a Threat
Let’s take a glance at each of those forces in terms of the 3D baby image industry:
Supplier Influence
Supplier power refers to what proportion of “sway” or pricing power your suppliers have over you. Within the ultrasound business, the sole main item you will need is an ultrasound machine, and there is a huge marketplace for both new and used equipment, so vendors have little clout.
Buyer Influence
The second factor to think about is whether or not or not buyers have the authority to barter better pricing with you.
What percentage of husbands can convince their expectant wife close to meeting her child for the first time that they do not have to spend $150 on a DVD and a teddy with a heartbeat once they’re in your office for the $59 or $69 special and you show them the list of add-ons?
Second, if clients are already in your office and have scheduled a meeting with you, are they really going to drive across town to ascertain whether the “platinum” package is $10 cheaper somewhere else? It’s unlikely.
Rivalry between competitors
This has got to do with what percentage of other firms you will be up against and how strong they are. If you offer anything that can be purchased readily online, for instance, you’re up against tons of competition, but in 3D ultrasound, you will only be up against businesses that are within driving distance of your clients.
In most markets, you will have 3-5 competitors within driving distance. There are about ten enterprises offering this service in San Diego County, a market of about 3 million people with about 50,000 births per annum.
Substitutes Pose a Threat
What are the alternatives to a 3D ultrasound studio for expectant parents who wish to photograph their children? There aren’t many.
New Entrants as a Threat
While starting a 3D ultrasound business isn’t prohibitively expensive, you want to be ready to operate an ultrasound machine. This, on the other hand, is often completed in 4-5 days.
With that stated, the industry is currently relatively unknown, but the very fact that nearly anybody can start a 3D ultrasound firm with a minimal amount of cash implies you’ll encounter competition at some point.
Hiring a Consultant vs. DIY vs. Buying a 3D Ultrasound Franchise
There are various franchise options available within the sector, and although this might be an appropriate option for a few people establishing a 3D ultrasound business, it’s not for everybody.
If you’ve never operated a business before, franchising could also be well worth the extra expense just to spare you time and misery by allowing you to learn from the mistakes others have made before you.
Franchise fees are typically around $25,000, which seems like a ton, but if you amortize those costs over the length of time you expect to be in business (ideally 20 years or more), it’s highly likely that you’re going to pay for them with the additional money you’ll make by following a proven plan.
Having said that, hiring a non-franchise consultant is an additional option. I had the pleasure of speaking with Anna Rodekuhr of 3D Ultrasound Consultants recently.
Anna features a unique perspective because she is the owner of a 3D ultrasound company that began out as a franchise and nearly went out of business thanks to faulty advice from the franchisor.
Anna, like all intrepid entrepreneurs, found out how to make her business work and decided to start up a replacement company to teach others what she had learned along the way.
Anna’s company sells the “full shebang,” which can cost up to $25,000, but you’ll acquire everything you need to start a business on the proper foot for $10,000 or less from the corporate.
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