Business Builders: Finding a viable and Unique Home Based Business Opportunity Amongst all the offerings how do you decide which one to go for? The first thing that you need to determine is your objective. Do you want to earn just a few extra pounds a month to supplement your income or do you want to build a long term future? The type of activity you choose should always have this in mind. The second part of the question is whether you might want to change your mind and develop what you start into a long term business at some later date? If this is the case it would make sense to start a business that could be developed at some time in the future.
If you only want to earn some extra money in the short term there are many options such as envelope stuffing, typing from home, processing claims from home and so on. These are all forms of selling time for money but you do not build any equity in the activity. What does that mean? If you stop the activity there is no income. It is just the same as a job but you do it from home and gain the benefits such as flexibility and no commuting but you will not be paid very much and your income cannot grow. You also rely on someone else providing you with work and you have no guarantee of this happening, so the income is not guaranteed.
The purpose of this article is to look at those home based business opportunities where you can build a substantial long term income, in other words, it is for business builders. These can also be started part time with a view of just earning a few hundred pounds but give the flexibility of being grown into larger businesses where you obtain a residual income. Residual income is the key point here and it is the income you earn from your past efforts and which continue after you have stopped working yourself. These I will term home businesses rather than just working from home.
What to consider when looking for a Home Business
Vision:
First of all you need to have some vision of where you want to be in 10 or 15 years time. These are not get rich quick schemes but a deliberate process of building a business over time. The rewards come after the hard work and sustained effort of many years so you need to come into the business with this consideration in mind. Many people start a home business and give up just before it starts to pay dividends. This is the first trap to avoid.
Time and money:
The next consideration is to decide how much time and money you can invest in the short term. For most people starting a home business they are already doing a job or are at home looking after children. A home business will take time to become established before it can be relied on to provide a constant or growing income. For this reason it is best to have another source of income to cover your household bills and expenses without having to rely on your new business to cover your day to day expenses. So either you or your partner, if you have one, should have another source of income. In the event that you do not have any other income you will be putting pressure on yourself to get sales and then be using the money from the business to cover your living costs rather than reinvesting into the home business. This will slow down your growth but this may be offset by your drive and need to be successful. There is nothing like having your back to the wall to make you focus and really work at your new enterprise.
Characteristics of a Home Based Business:
There are a great variety of home based businesses opportunities out there and one cannot say that this one is the best or that one is, as it depends on many factors such as your personality and your objectives. I will give you my views and how I set out to choose between the different options. This does not mean that I came up with necessarily the best solution, although I believe I did for me, but one which satisfied the criteria that I was using to decide between the alternatives.
These were the criteria I considered when evaluating alternatives:
1. Consumable product or service so that I could get repeat business:
2. Mass market appeal so that it could become a big business:
3. High growth industry with predictable growth for a long period oftime:
4. High quality products (I want to be proud of the products or service):
5. Strong management which acts with integrity. What were the values of the company and its reputation? Is it a member of the DSA (see below):
6. Established for at least 5 years and preferably 10 with a strong financial position (I want some confidence it will be around in 15 years time):
7. The compensation plan. Was it clear and easy to understand? Was it sustainable? Would it provide the residual income I was looking for?
8. Training and support. What was available and would it be ongoing?
9. Infrastructure. Was there an infrastructure in place or would I have to create it: and
10. Could it leverage the power of the internet without being an internet business i.e. the internet is a tool rather than the business.
These criteria, or those which are important to you, need to be established before you start deciding on your business so that you do not get deflected by a glitzy presentation or a smooth operator. You are looking to start a business and you can choose which industry or business sector you enter so choose wisely and with objectivity.
Not surprisingly it took me a long time to find a business which passed all or most of my criteria. I am glad I waited because once I had found the right one I was confident about the company and opportunity and so I was prepared to commit to the enterprise from day one.
Value Added:
The next factor to consider is what you bring to the table. Do you have any skills that are relevant to running a business? Your work ethic.Unless you are prepared to put the work in nothing will come out. Are you teachable? In all likelihood you will be entering into an area where you know little. This should not worry you if you are teachable and the business does not require some detailed experience before you start. Are you prepared to do whatever it takes to learn about your new business? Will you go to company meetings and do the training necessary to be successful?
You need to realise that to be successful in business you have to add value to the marketplace. If you are not adding any value in what you do why should you expect to be well paid for doing it? Value added content or lack of it is what often distinguishes a scam or poor opportunity from a genuine proposition. Get rich quick schemes seem to promise that you become rich just by doing X. If it was that simple everyone would be rich. I have met many people who have dreamed of being rich by buying some website or some special business offer only to find that there was nothing behind it. A website is of no value unless you can drive traffic to it. Driving the traffic is the difficult part and once the traffic arrives you need to be sure that you have something which the public perceives is of value or nothing will happen.
In all walks of life you are compensated because of the perceived value you bring to the market place. You will need to increase your skills and become knowledgeable about your business whatever it is. If you are not prepared to do this you are unlikely to succeed. That is why it does not matter too much if you know nothing about the industry you are entering as long as you are prepared and capable of mastering it. It may take a bit longer in the beginning but if you have chosen wisely it will pay off massively in the future.
Technology and Commodities:
Be careful of being seduced by technology and be aware of the risk of commoditising. The latest and greatest new product can soon become obsolete. The accelerating rate of change in technology can mean that today's great product is on the scrapheap tomorrow. Look at fax machines; they were everywhere but now scanning and email have more or less made them redundant. In the US, long distance phone cards provided a fantastic opportunity to grow a business until they became so successful the major outlets started to sell them. They had become a commodity and the opportunity had then disappeared. Why? Because the resellers of the cards added little value so buying one in a store was just as good. Always look at your industry and offering and question whether, if it becomes large and successful, the major outlets will take over the marketplace.
This does not mean that some of the offerings are not good ways to make money in the short term. That may be enough for you if you can make enough in that timeframe. Just be cognisant of the probability that the residual income criteria may well not be met. You could always then adopt a newer technology and build a new business. This does appeal to some people and many have had great results. These are opportunistic approaches to making money which bears some similarity to traders.
DSA:
Many of the largest multi level marketing companies are members of the Direct Sales Association (DSA). The DSA is the industry's trade association. Members have to qualify by adhering to the DSA's Code of Values. One of these is that the company offers to buy back products purchased at 90% of their original cost within 12 months of purchase by a distributor. This factor is important for a new distributor because it limits the risk of the investment that they may make. There are no guarantees but membership of the DSA should provide so comfort to a new person that they are dealing with a reputable company.
The Office of Fair Trading (OFT) in the UK recognizes the DSA which, in essence, means that the public can deal with the company in the knowledge that their interests are safeguarded.
Summary:
Take the time to check out the company with whom you will be dealing. If you are to follow a 10 or 15 year plan you want to be sure that you are getting involved with the right sort of company and one in which you can believe. The choice is up to you and I recommend that you make some objective assessments before committing yourself. Once you have made your decision, move forward with confidence and conviction and establish a long term strategy to reach your goals and dreams.
About the Author:
Charles Crisp is a chartered accountant and management accountant who gave up the corporate rat race and now works at home with his wife. Visit their website: www.myperfectfuture.org.uk
