With the economy in rotten shape and hundreds of thousands of people losing or about to lose their jobs, there has never been a better time to start your own business so 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 pick from.
So here are the 10 questions I suggest you ask about any business you might be considering to find an opportunity with low risk and a high probability of success.
1. What you can to afford to invest?
Decide this first so you do not get tempted to do something you can’t afford. That means you need to include both the cost to buy and start the business as well as any continuing overhead to get you to profitability.
For example, franchises will typically require a minimum of $20,000 and very commonly over $100,000. So, if you can only afford to invest, say $1,000, you can eliminate thousands of businesses from your consideration right away.
2. What ongoing overhead is needed?
Ideally, find a home business that can be 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 will make you profitable. Part of making sure you’ll have low overhead is ask:
3. Does the business require you to hire employees or keep an inventory of product to resell?
You don’t want either….
4. Do you have to do any invoicing, collections or carry any accounts receivable?
If you are selling to businesses, a tough economy can lead to businesses not being able to pay their bills – and that’s certainly not good if they owe you money. Don’t get involved in any business where you where you have to do billing or collections.
5. Does the business has proven systems for you to follow?
The most important system is one to get sales because you have no business without customers. Don’t get involved in anything that requires extensive training or requires skills you don’t already have.
6. Is the product or service is in huge 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 business have a significant advantage over any competitors is does have? Best of course, is a large market and no competition!
8. Can the product/service easily be niche marketed to many different kinds of businesses? By being able to be adapted easily to many niches, it will be much easier to make sales and you’ll never run out of customers.
9. How long have they been in business? If you are looking at a network marketing company, make sure it has 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 is up in the millions, it’s too late…)
10. Is there an opportunity to get wealthy through future residual income? This means can you get to the point where the business pays you a substantial income without employees, inventory or you having to work in it any more?
and lastly, scam alert…
If you look in many home business type magazines, you will see they are full of ads essentially saying “buy my thing and you’ll get rich with little investment and no work”. If it looks to good to be true, it is.
If it were true, why aren’t they doing it themselves and keeping it a secret?
The reason is that the money in those businesses is in doing exactly what they are doing – advertising for suckers to give them money for it – not in actually operating it.
Any business that makes earnings claims is to be avoided – it depends on you after all. Legitimate businesses like franchises and network marketing companies are prohibited by law from making earnings claims.