With the economy in bad shape and millions upon thousands of people losing or about to lose their jobs, there has never been a better time to start your own business so that you can be in control of your own destiny. The question is though, how do you find the right business? There are literally thousands to choose from.
Here are the 10 questions I suggest you ask about any business you are considering to find an opportunity with low risk and a high probability of success.
1. What can you afford to invest?
Decide this first so you won’t be tempted to do something you can’t afford. That means you must include both the cost of buying and starting the business as well as ongoing overhead to achieve profitability.
For example, franchises will generally require a minimum of $20,000 and very commonly more than $100,000. So if you can only afford to invest, say $1,000, you can remove thousands of companies from your consideration immediately.
2. What ongoing overhead is needed?
Ideally, find a home business that you can run part-time or full-time so you can keep costs down. The easiest way to be profitable is to have no overhead and very low operating costs so that even a small amount of sales makes you profitable. Part of making sure you’ll have low overhead is asking:
3. Does the business require you to hire employees or maintain an inventory of products for resale?
You don’t want to either…
4. Do you have to do any billing, collection or keep any accounts receivable?
If you’re selling to businesses, a tough economy can mean businesses can’t pay their bills, and that’s certainly not a good thing if they owe you money. Do not get involved in any business where you have to do billing or collections.
5. Does the company have proven systems that you can follow?
The most important system is one to get sales because you don’t have a business without customers. Don’t get involved in anything that requires extensive training or skills you don’t already have.
6. Is the product or service in high demand by a large market of people or businesses who have money to spend and are willing to buy?
It’s best if your market includes both consumers and businesses.
7. How much competition is there and does the company have a significant advantage over any competitor it has? The best, of course, is a large market with no competition!
8. Can the product/service be easily marketed in a niche to many different types of businesses? By being able to easily adapt to many niches, it will be much easier to make sales and you will never run out of customers.
9. How long have they been in business? If you’re looking for a network marketing company, make sure they’ve been in business for 5 years (98% fail before that) and that the total number of distributors is less than 200,000 (once that number goes up to the million, it’s too late…)
10. Is there an opportunity to get rich through future residual income? Does this mean that you can get to the point where the business pays you a substantial income without employees, inventory, or having to do more work on it?
and lastly, scam alert…
If you look at many home business magazines, you’ll see they’re full of ads that essentially say “buy my stuff and you’ll be rich with little investment and no work.” If it seems too good to be true, it is.
If it were true, why don’t they do it themselves and keep it a secret?
The reason is that the money in these businesses is in doing exactly what they are doing: advertising to fools to get paid for it, not in actually operating it.
Any business that makes profit claims should be avoided; after all, it’s up to you. Legitimate businesses, such as franchises and network marketing companies, are prohibited by law from making any earnings claims.