What is the Sharing Economy?

If you ever sat through an awkward conversation with an Uber driver, you have been an active participant in the sharing economy. “Sharing economy” is the term used to define the collaborative economy in which owners of property rent it out to those who are willing to pay for it. It is a peer-to-peer based system that allows others to either obtain or give access to goods or services. Popular sharing economy companies include AirBNB, Zipcar, Instacart, HomeDine, Lending Club, Poshmark, Postmates, Lyft, and– of course– Uber.

The sharing economy is great for consumers and reducing waste. It helps people get the items or services they need for a short amount of time without having to make a big investment. However, the sharing economy can also be beneficial for those looking to start their own small business.

Starting a Sharing Economy Business

If you want to tap into the potential of the sharing economy to start your own business, it’s a great time to do so. While the sharing economy held an estimated value of $14 billion in 2014, projections estimate it will increase in value to be worth as much as $335 billion by 2025. If you want to get a piece of that pie, use the following advice to ensure your small business is successful.

Build Trust with Customers

With the availability of so many products and services at the consumer’s fingertips, the one thing that can set your business apart is trust. Building trust with clientele takes time and patience, but it is one of your most valuable assets. If you want your customers to trust your business, you have to be communicative and reliable.

Most sharing economy apps and businesses also provide review services for customers. People are more likely to share a negative review than a positive one, so if you want to encourage more good reviews, you have to ask for them. You can also offer incentives for reviews like a percent off their next transaction or a shout out over social media. If you do get a negative review, respond respectfully and offer to correct mistakes. Showing your clientele that you care about their experience and recognize your mistakes can build just as much trust as reliable service.

Establish a Functioning Workspace

When you run your own business, it’s easy to assume you can do it all from the comforts of your bed. However, it is important to find a way to separate your work and your time off-duty by setting up a home office space. Not only does it keep your organized, it can cut down on stress and established a more balanced lifestyle. You can create even more structure by establishing firm work hours, removing distractions, and having the equipment you need– for instance, a scale and a label printer for mailing out packages– on hand.

Record All Your Business-Related Expenses

Every time you buy something for your business and don’t track the expense, you are basically setting money on fire and letting the ashes blow out the window. Small businesses have to pay taxes just like citizens have to. When April rolls around, the price tag Uncle Sam throws your way is often gut wrenching. You can reduce the total amount of taxes you owe by deducting your expenses, no matter how small. Download a receipt organization app that allows you to take photos or scan paper receipts or upload digital ones. You should also track your mileage anytime you drive on company time. These things take more time in your daily life, but they can save your business thousands come tax season.

***

The sharing economy allows people to access the services and goods they need through people that have the resources and time to share. At this point, growth is inevitable, so it is a great time to start making money through the sharing economy. When starting your company, always work on building trust with clients, establish a functioning workspace, and track all your business-related expenses to help save money on taxes.