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If you’re reading this article, you’re probably still open to starting a home-based business.
That’s good because now is a great time to do it. And, because of the internet, managing and marketing your business is easier and more affordable than ever before.
The problem is that there are so many home-based business opportunities being presented to you that to evaluate each one can be a full time business in itself!
This simple evaluation process will save you a lot of time and eliminate about 98% of the choices out there.
With any opportunity, you need to look at
a) The Company or corporate entity behind the opportunity
b) The products or services
c) The compensation plan
The Company or Corporate Entity
Find out who runs the company, how it’s incorporated (if it is at all), how long they’ve been in business, etc.. Do not join a company that has not been in business for more than 5 years. Don’t fall for the, “you need to get in on the ground floor” line. Remember, when the building collapses, it’s the people on the ground floor that get squished!
Get the numbers. Dig into the financial reports. If they don’t provide them, you don’t sign-up with the company.
When you get the financial reports, you want to see the following:
a. No Debt
b. Cash Reserves
c. A Record of increasing revenues quarter-after-quarter and year-after-year.
Two out of three is not good enough.
The Products or Services
What are the products or services? Strike off your list any company that only offers one product or product line. I don’t care how good the product is.
We have more than enough companies that sell a wonderful juice that is made with an exotic berry that is only found in the mud of central Brazil that has antioxidant properties responsible for curing everything from hemorrhoids to brain cancer. If you like the product, great, be a customer. But don’t think you’re going to be able to build a viable business with a product that everyone else is selling.
Your best chance for success in the current marketplace is to offer hundreds or, if possible, thousands of products or services. That way, when someone tells you they are looking for something, the probability that you have it as part of your offering is higher.
This brings up the next point. Don’t sign-up for a company that manufactures its own products. A company that allocates its resources to product research and development and manufacture is vulnerable to changes in market trends. What’s hot today is not necessarily going to be in demand tomorrow. Also, if a product or service is that good, you can bet that there are individuals and companies, out there, trying to improve on it – and it’s only a matter of time before they do.
Think of it this way: Would you rather own Dell computer or the company that sells Dell, Gateway, Apple, IBM, etc.? You want to be a true product or service broker.
The Compensation Plan
How will you be compensated? Make sure you understand absolutely everything about the compensation plan.
Do you only earn retail profit and commission on what you sell? Can you earn commissions on what others in your organization sell? If so, are your commissions a percentage of your organizations’ sales or is it based on volume?
Here is where I’m going to irritate a few more people: stay away from multi-level compensation plans!
Let me be clear on this, I did not say stay away from network marketing. Multi-level and network marketing are two different things.
Multi-level means just what it implies. You are paid a commission based on sales made by people in your organization down to a specified number of levels.
Every business, on the other hand, does network marketing. Marketing is simply educating people on your products and services. Network refers to the people that you’re educating. That’s it. How is a business going to sell a product or service unless they present to their prospects – i.e. their network – the information about their product or service – the marketing?
The problems with muli-level marketing compensation plans are many but here are a few:
a) getting paid on a limited amount of levels limits your earning potential while increasing your workload.
b) Most multi-level compensation plans require that you sponsor more than two people. The DSA (direct-selling association) finds that the average person can only build 2.8 organizations. So, having to sponsor any more than 2 people is beyond what most people can or will do.
c) Successful distributors can break away from your organization requiring that you train or replace another distributor in order for you to maintain your income.
The bottoms line is that there is a good reason why most people don’t make money with a multi-level compensation plan: they’re difficult!
The Final Point
There has never been a better time to start a home-based business. Ironically, there has never been a better time for scammers to offer you one!
As with any venture or investment, take your time to you do your due diligence. Doing so will reduce your risk, give you confidence in your final decision, and set you up for success and true income security.
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Tags: Business, Evaluate, HomeBased, Opportunity
James Klein