Questions to Consider When Choosing a Home Based Business

I just got through writing the following article for my blog that I think will be helpful for someone looking for a home based business.  It is based on years of experience, some of it good and some of it– not so good.  I intend to submit it to an article submitter.  Tell me what you think.

Questions to Consider When Choosing a Home Based Business

Millions of people around the world are looking for ways to supplement their income with an at home business.   Some are looking to supplement their income; others are yearning to leave the workplace rat-race in order to have complete autonomy of their lives.  Whatever the reason, there are critical questions a person needs to consider when choosing a home based business.  One, an individual must consider his/her readiness to start a home based business.  Secondly, he/she should carefully scrutinize the parent company when choosing a home based business. This article will pose several questions an individual should ask of himself/herself and  about the specific home based business he/she is considering.  Although the questions posed will work with any home based business, they are more specific for individuals involved in direct or MLM marketing.

Are You Ready For A Home Based Business?

A home based business may not be for everyone.  Consider the following questions as you determine your readiness to start a home based business.

v  Why do you want to start an at home business?

Ø Unless you have a compelling reason to start a home based business, you may not have the staying power necessary to get you past the rocks you’re sure to encounter as you plow new ground, i.e.,

o   Your need to supplement your income.

o   Whether or not you are interested in a retirement business.

o   Your need to be able to work from home.

o   Your desire to be your own boss.

v  How much time are you willing to spend each week on your at home business?

Ø Beware of anyone who promises that you don’t have to do anything.  They are probably involved in some type of ponzi scheme or some other type of illegal activity.  The only substitute for hard work is smart work and they both require time.  You should be committed to minimum of five or more hours per week to build your at home business.

v  How much money are you willing to spend to start and maintain your at home business?

Ø  There is no such thing as a free ride.  Every business has some type of start-up cost and on-going operation costs.  The same is true with an at home business.  The advantage of having your own at home business is that you don’t have to pay huge overhead costs that most business owners, have but there will always be some costs involved, i.e.

o   Entry cost to join a business

o   Monthly product cost (auto-ship)

o   Recruiting cost (lead generation)

o   Office expenses (phone, computer, internet, printing supplies, etc.) and many others

What Should You Look For When Choosing An At Home Business?

Most home based business opportunities promote themselves as being the best thing to come along since quilted toilet paper, but in the majority of instances, it’s nothing more than over-hyped sales pitches.  Asking the right investigative questions will help save you grief and time before you spend your hard earned cash to become involved with a home based business. 

v  How strong is the management team?

Ø  The leaders of any company must have energy, enthusiasm, and the capacity to translate vision into reality.

o   They must have integrity

o   They must be dynamic

o   They must have experience and knowledge

o   They must have the ability to surround themselves with visionary leaders and doers

o   They must be innovative

v  Does the company have a strong infrastructure?

Ø  I define infrastructure as the fuel that makes the wheels go round.  It includes such things as:

o   Reputable legal council

o   Financial resources or backing

o   Ability to handle growth (Nothing can destroy a company faster than uncontrolled success.)

o   Capable technical support staff

o   Responsive customer support

v  Does the product or service have sizzle or a compelling story?

Ø  You need to have a product or service that customers are looking for (market niche).  Preferably, it would be a product or service that is not being addressed by mainstream marketers.

Ø  It should be a product or service that has pizzazz, glitz, or bling.

Ø  Who are the competitors of this service or product?  Try to avoid “me too” products (i.e., juice drinks) unless they are unique enough not to be compared to similar products.

Ø  The product or service should be both highly consumable and affordable.

v  What is the break-even point and how do you make money?

Ø  Often times when choosing a home based business, individuals become blinded by the allure of making a gazillion dollars when the real questions should be, “How many sales does it take to break even?” or “How many personally sponsored business associates do you have to have to break even?”  Once you know the answer to these questions, you can determine if the effort will be worth the reward.  It is also helpful as you determine realistic business goals.

Ø  For individuals looking at an MLM business there are many types and variations of compensation plans, the most common are binaries, unilevels, and matrixes. Don’t get caught up in which type is best.  Whether you are involved in an MLM opportunity, a straight commission company, or retail sales business, what is most important to consider is how you will be paid and if the company pays earned commissions in a timely manner.

Ø  Don’t forget to consider what your monthly fees, product quotas, or auto-ship requirements will be.  Related to this, you need to know if you will have inventory requirements.  Companies that require you to purchase large quantities of inventory involve a lot of risk should you decide not to work with that company anymore.

v  What is the attrition rate of the company?

Ø  If more people are falling out the back door than are coming in the front door then, “Houston, we’ve got a problem.”  A company that has a low attrition rate (30% or less) is an indication that people are happy with the company and are sticking around for awhile.

v  How old is the company and what is your position in that company?

Ø  It has been said that timing is everything.  Timing is very important, but equally important for most MLM businesses is positioning within that company.  If you can be placed in or near the top of a MLM company, your chances of making significant money are greatly enhanced.

Ø  There are trade-offs with becoming a part of a long established company.  You have to decide what is best for you, taking all the other questions into consideration.

o   Advantages:

§  Name recognition

§  Stability

§  Marketing resources

o   Disadvantages

§  Loss of timing and positioning.  People who are first in a company tend to make more money than those who join down the road.

§  Loss of uniqueness of product or service.  When a company creates great success, a lot of “me too” companies pop up diluting the potential market.  Nutritional beverage companies are a prime example of this.

§  Name recognition can be as big a negative as it is a positive.  Amway ^TM changed their name for this very reason.

v Does the parent company have a strong marketing model in place.

o   Success in any home based business hinges on your ability to create duplication of sales either by yourself, by personally recruited associates, or by hired employees.  A strong marketing model (a process for creating duplication) should have three main components; prospecting, follow up, and training. 

o   Many companies would have you focus on your warm market, those people you already know.  Although warm market prospecting can be powerful, many people will associate you with the NFL Club ( No Friends Left Club).  At some point you will need to prospect your cold market (people you don’t know.)  Regardless of whether it is your warm market or cold market, a dynamic marketing model that addresses each of these three areas will greatly enhance your success.

v  “Who’s you’re Daddy (or Mama) sponsor?” or “How supportive will your up-line, sponsor, or supplier be?”

o   Your sponsor/mentor should have the ability to teach and work with you in the process of creating duplication. It is important to align yourself with someone who:

§  Is a person of integrity.

§  Has experienced success and knows the ins and outs.

§  Is accessible.

§  Is concerned with your success as much as his/her own.

§  Has a system or business model that works for you.

Conclusion

There are many compelling reasons to become involved in your own at home business.  Before you do, you should first determine if you are ready to take on the commitment that comes with having your own at home business, and then you should do plenty of “due diligence” before choosing the business or opportunity you’re interested in becoming with.  By asking the right questions before you take the leap into the home based business market, you can save yourself a lot of time and money.

By Sheldon Worthington (www.onlinemarketingniche.com)

Thank you for reading my article.  If you have any feedback, please click on the word ‘comments’ below.  I’m affiliated with business that is able to answer positively to all the questions I asked in my article.  They have a great blog called the Home Based Reporter at http://www.homebasedreporter.com.

Until next time, I hope you have another day in Paradise!/Sheldon/