Eight Things You Should Know About Home Based Business Opportunities
1. What Kind of Startup Costs Are Involved?
All business opportunities come with startup costs. In some cases, such as with franchises or businesses in boxes, these are more apparent. This is as you’re usually charged a fee when you sign up to partner in a franchising or other biz ops program. These costs can range between $5000 to $15,000. Some opportunities are even more expensive.
What you need to know about these costs is that some of them are recurring. If you choose to franchise, for example, you may need to send royalties to the parent company every month. Some business opportunities also come with hidden costs. Understanding all the costs associated with a business opportunity before actually investing in it can help you later on.
2. What Are The Products And Services You Will Be Selling?
If you don’t like the product or service you’re selling through your business opportunity, your client will be able to tell as well. That’s why it’s essential to only choose business opportunities that deal with products or services you approve of.
Remember that when you join hands with a company through franchising or biz ops deals, you become a local representative and face of the company.
3. Is There Any Realistic Potential For Profit Gain?
When you choose to work with a business opportunity, you’re probably visualizing success for yourself as well. Unfortunately, business opportunities often don’t work out. Many new businesses and retail locations close within five years of launching.
Ultimately, if you aren’t making any profit, there isn’t any point in investing in a work from home business opportunity. To understand your potential to profit through the opportunity, try to predict how much you’ll be making in profits. This amount should be considered after considering income, expenditure, fixed costs, recurring costs, variable costs and your profit margin.
To properly understand your chances of turning a profit, both understanding and monitoring your business accounts will be necessary. You can either hire an accountant, do it yourself, or invest in good accounting software.
4. Who Is Your Target Market?
If you don’t know who your target market is, then you won’t be able to reach your sales goals. Say you invested in a work from a home business opportunity where you’re asked to sell makeup. However, the area you intend to sell the products in doesn’t have anyone willing to buy from you.
In this case, you can actually encounter loss through the business opportunity. Instead, consider doing your research on your target market. Once you know who they are and you’ve established your buyer personas, market to them exclusively.
5. How Long Has The Parent Company Been in Business?
Not every work from home business opportunity you come across may be credible. Some could be scams as well. Sometimes, newer companies, although credible, can’t give you the help and support you want. A lack of funding also leads such companies to folding.
When it comes to business opportunities, trusting those that have a proven track record of working successfully with people will be ideal for you. While there are myths that such opportunities are rare, that isn’t true. If you have a great affinity for selling and marketing a product and a good business sense, it’ll be easier for you. You can find older and well-established companies ready to work with you.
6. Are There Any Rules When It Comes to Advertising, Marketing, and Branding?
When you’re working for a larger company that has its logo, business name and branding, you may need to be careful about how you market your work from home business opportunity. Say you enter into a franchise deal with a fast-food company. In this case, they may have specific requirements regarding how they want their brand promoted.
Sometimes, parent companies can ask you to limit your exposure to certain areas. You may also have to follow specific rules regarding using the brand name, logo etc. If you aren’t sure about how you can use the parent company’s branding, remember to ask them ahead of time.
7. Are There Any Minimum Inventory Requirements?
If you’re buying inventory from parent companies in order to sell them through your retail location, then read your contract before signing anything. This is as sometimes you may be required under contract for the business opportunity, to buy the same bulk amount on a monthly basis. There may be other time periods involved as well, such as weekly or bi-weekly purchases.
If you aren’t selling your stock fast enough, then investing in more stock can be financially stressful for you. That’s why you should only work with business opportunities where you have control and flexibility over products procured and sold.
8. How Affordable Are The Products and The Services?
If the products or services you’re offering are not affordable, then you’ll not find enough people willing to buy from. There are also some products that are consumable. These are purchased by customers again and again, meaning that you’ll have better retention rates.
Other products and services are non-consumable. This means that after investing in them once, the customer has no need for another purchase. Keeping this in mind when you choose what kind of business opportunity you want to work with can also be to your benefit.
Work from home business opportunities come in all kinds of packages. If you want to protect yourself, then you should consider carefully answering these questions before proceeding. Only after you’re sure that your chosen business opportunity can bring you profit, should you go ahead.
Another way you can protect your work from home business is with business insurance. If you want to learn more about how business insurance can keep your work from home business safe, then click here.