Before you read this article, promise me that when you are finished you will send the link to this post to two friends. Please and thank you!
Every once in a while, I feel the necessity to repost this information. Frankly, it appears to be necessary because there are still an amazing number of people that sign up for home businesses based on emotion and not on research and due diligence.
This week, I’ve had about a dozen calls from people asking about a new business that is making the rounds. Interestingly, at first glance, it seems like a good business concept. But when you begin to dig deeper, like into the compensation plan for example, it starts to make less and less sense.
RED FLAG #1
The company promises to pay you $9,000.00 once you’ve recruited 16 new members.
RED FLAG #2
The company charges each new member $200.00 to join.
THE MATH DOESN’T WORK
If you actually do the math on this, signing up 16 new members at $200 each gives the company $3,200 in revenue. From this they are going to pay you $9,000. The disconnect is pretty obvious. No company can pay out three times more than they generate and stay in business very long. End of red flags. End of story.
I have been a student of the home business industry for almost 30 years. I have been asked to review over 400 companies and business plans. I’m not telling you that to impress you, but simply to set the framework for this post.
The question I get asked most often is “how can I be sure that I’ve found a good home business opportunity?”
Great question. And frankly, it’s a pretty simple answer.
I firmly believe that everyone should have some sort of home business.
Even if you don’t have a lot of time or don’t think you have the skills, the benefits far outweigh the challenges. Even if you only earn a few extra dollars, working from your own home eclipses a part-time job. And the tax advantages may be extraordinary depending on your employment and personal circumstances.
But finding a good one?
You are right to be skeptical. At last count there were about nine thousand home based business opportunities in North America and all of them would love to have you onboard.
Frankly, many are not what they appear to be. Some are bad, some are horrible and some are downright illegal.
The good news is that there are some outstanding, legitimate and truly incredible home business opportunities if you know how to evaluate them.
Would it be okay if I gave you a simple formula?
There are four things that any home business must have to be long term and financially successful. Judge any home business based on these four criteria and you will always make a good decision.
Research the ownership of the company. Many home businesses are started by entrepreneurs who have found or created a great product, or by corporate success stories that are looking to expand their portfolios. Most of them are wonderful, well meaning people. There are also many that aren’t as well meaning. They are not interested in business, only on how much money you have. Make sure that the people you are going to do business with have a legitimate business background. Have they built successful businesses before? Are their other businesses still operating successfully?
If not, steer clear.
2. Consumable Product
The business must have a world class, consumable, exclusive product. It must be consumable so you can develop leveraged income month after month. It must be exclusive because you don’t want to be marketing something that everyone else has or that you can find on the shelves at the traditional retailers. And if it’s an ingestible product, make sure that you review the science. Make sure that the research and testing of the product line is rock solid before you jump in. For example, if someone asks you to join a business that markets nutritional products, always, always, always ask to see the published, third-party trials to confirm their claims.
If not, steer clear.
3. Pay Plan
It never fails to amaze me how many people get started with businesses and haven’t the foggiest idea how they will get paid. Would you take a job without knowing what the salary was going to be? Or what you needed to do to earn it? Leave the dreams of huge incomes aside and actually look at the pay plan. Is it one of those things where just a few people at the top make a whole lot of money and no one else does? Can you generate income within the framework of the time you have available and does it fit your lifestyle? If you can’t answer those questions, find someone with an expertise in that area and ask them.
If you can’t make a reasonable income for reasonable effort, steer clear.
4. Who You Work With
It’s this simple: You can’t succeed in a home business unless you have someone to show you the way. This may be the most important criteria of all. Do not get started in business just because someone asks you. Will that person train you, support you and provide you with the mentoring you need to succeed? How long have they been in the industry? How long have they been with the company? Ask to speak with some of their current team members to find out if they are a mentor and really do support and assist their people.
If you can’t get satisfactory answers to those questions, steer clear.
The great news is that there are some wonderful home business opportunities available. Some with companies that have revenues of billions of dollars a year. Some are startups run by remarkably intuitive entrepreneurs that understand home businesses.
You just need to get past the “get excited and sign up” stage and treat this as a real business.
If it’s a legitimate business, it will stand up to your intense scrutiny.
If it doesn’t, steer clear.