The 5 Things You Should Ask About Home-based Business

August 25, 2006; 02:59 AM
Multiple streams of income, direct sales, MLM, network marketing and home-based business are terms that used to have a negative image with many people not too long ago. Today, however, there is an entrepreneurial renaissance underway, according to consultant Bruce Bley, founder of BCB Associates, as more families look for ways to supplement their income. Home-based businesses are in vogue.

There is no more job security with today’s big business. Huge lay-offs have recently hit some of the big name corporate giants in America. Major pension funds are reducing benefits. Day care is expensive and people are tired and disgusted with a long, expensive commute away from their family. Many are fed up with large companies wringing higher profits out of reduced employee benefits.

You have decided to look into several home-based business opportunities. Here are 5 question areas that Mr. Bley suggests you need answered to help you choose the business that is right for you:

1.) Business or Hobby: The first question is one you have to ask yourself. Everything else is based upon your answer to this question. Are you serious about building your own home-based business, or do you just want a hobby or a lottery ticket? Make sure that you answer this honestly to yourself, because your business success will be determined by this mindset. You don’t necessarily have to work your business 8, 12 or 18 hours per day to succeed. The key, however, is that you have got to commit to some scheduled time to a business. Are you motivated? Don’t expect to make a million dollars while you sleep. Make sure you understand why you want to get involved in a home-based business and stay focused on your “why”. For a hobby, who cares; pick it up and play with it whenever you are in the mood. There are very few people in the world today that get paid for doing nothing. Get over it.

2.) The Products: This is the foundation of your business and the key to all your income. Your business is going to thrive or fail based upon your firsthand knowledge of the product and a belief in exactly what it can do. Is the product real or is it just a concept? Does the product provide a benefit to purchasers? Is there a market and demand for the product? Does product do what is claimed? Is it certified by independent third parties with appropriate credentials? Are the products manufactured by the franchisor, or is design and manufacture out of their control? Is product high quality and priced fairly? You should be a user of your own product. If you aren’t prepared to invest in your own product, how can you expect your customers to buy from you?

3.) The Marketing Plan: Your personal value system should be compatible with the business plan and tactics or strategies used to market the product or service. Is this a real business, with a real product, or is it merely a stacked pyramid scheme? Is this a sign-up club? Building your business by recruiting a Team of serious partners is the most efficient way to grow your business. Have you got the temperament to undertake this effort? Do you really understand how you get paid? Can company provide audited accountants statement verifying historic payout schedules to existing dealers?

4.) The Training Support and Partners: Will you be trained by the company? What will this training consist of? Is it thorough and effective? Is this included in your registration fee? How long has company been in existence? What is their reputation in the marketplace? A lot of this information can be obtained by a Google or Yahoo search. If you are familiar with the internet you know that you have to sift through a lot of blogs, bulletin boards and false information posted by malcontents or people with an axe to grind, so be methodical with your research. It is easy to accuse and very time consuming to vindicate. Try researching the backgrounds and history of the named principal partners or corporate executives?

5.) The Investment Cost: How much does it cost to get set up? What is the franchise fee and what do you get for that? There are very few businesses out there (of any value) that have a zero cost entry fee. If you want to open your own McDonald’s these days you have to shell out about $1MM and then hire your own staff and buy your own food. Some other franchises associated with building trades can cost $50k-$100k or more and then you have to buy your own trucks and supplies. Make sure you understand exactly what you are buying. Do you have to buy inventory, and how much? Some companies require monthly purchases to remain an active, vested, dealer. What does that mean? Ask. In most businesses you have to invest some money to be able to make money.

There are probably many other questions that occur to you, but these are some of the most important ones to get you started. Enter the evaluation process with your eyes wide open to avoid expensive surprises or disappointment. Mr. Bley suggests that you do your homework, make your decision and take action. Remember that nothing happens until you take action.