Recommendations for a Home Business
Perhaps you have no idea what kind of business to start. Perhaps you’ve investigated many of the infomercial programs on TV and are lured by them. Or, perhaps you’ve tried some things…perhaps a little multilevel marketing, or some other business opportunity.
When I give my workshops on starting a home-based business, one of the first subjects is what to look for when deciding upon a home business. In other words, what makes for a good choice in a business and what does not.
Here are the criteria that I suggest make for a good home business:
Low Start-up Cost
A good candidate for a home business should not cost $10,000 or $20,000 to begin. If it does, you need to ask yourself, “what am I getting with the purchase price that I couldn’t recreate on my own?” Often, that is a tough question to answer positively.
A home business opportunity should not cost hundreds or thousands to run from home. If it does, it’s putting you more in the realm of a traditional commercial business with all its subsequent risks.
High Profit Potential
The business you select should have a good probability for income. So many opportunities that people pursue have little to no profit potential. I’m not sure why someone would get excited about a deal in which they might make $5 or $10 an hour…even from home.
The Potential For Residual Income
Income in a business can come in two forms. The first is a one-time sale; the other is an ongoing profit. If your business opportunity can afford you ongoing residual income, it builds a safety net of continuous income. Selling boats would provide one-time sales. If you don’t sell another boat, you don’t make any more money. Selling insurance, on the other hand, provides residuals – you make income every time the premium is paid by the customer.
Minimal Sales Requirements
Let’s face it…most people abhor selling. If that’s you, then it probably doesn’t make a lot of sense to get into a business which is sales driven. You’ll always need to market a business, but marketing and sales are not the same thing. Some opportunities like multilevel or network marketing require constant selling. Other kinds of businesses, such as selling on Ebay, require different marketing forms (in the case of ebay, it’s product selection and good ad writing).
Low Expertise Threshold
You don’t want the business owning you. If it requires your personal expertise, then it requires you to perform. Too many people start businesses only to find out they’ve just created for themselves another job…with lots and lots of bosses. Instead, look for businesses which can operate autonomously or can function with nearly anyone. Michael Gerber’s landmark book, The E-Myth deals with this subject.
The next time you are approached with a business opportunity, run it through this filter. See how it fares. If it comes up with too many negatives, pass on the deal. It you have a lot of positive check marks, you are probably on to something!