Are you doing home based business and not sure how to avoid mistakes? Then read this blog to know more list of the the top 10 ways to avoid home based business mistakes.
Ask These Questions First and You Won’t Regret It Later.
1. How many years have the Current Owners had Control of the Company?
I recommend that you do not do business with a company that has not been established, with its current owner for more than 7 years. Most businesses (approx. 80%) will fail within the 3-5 year mark, if they make it that far. You don’t want to invest all of your time and energy into a company that is going to close its doors on you, just as you start to make some money. Some companies are aware that people look for this and will buy an established name or trademark so that they can claim they have been established for longer. It is important to include the phrase ‘under current ownership’ when you ask the question.
2. Do I need to Stock, Sell, Distribute, or Package Any Products?
It is a very time consuming activity to resell products when you have to package up other peoples orders, collect their money, deliver, etc. The days of doing letterbox drops of brochures, flyers, etc are gone – so should be the need for you to handle other people’s money and orders. If you are going to partner with a company where you are required to do these things, ensure that you include the time taken to perform these tasks in you cost calculations. These costs can easily be 25% to 50% of your potential profit, is your time worth that little?
3. If You Invest in the Company and Partner With Them, What Sort of Guarantees do They Offer?
If a Company is a good and as reputable as they should be for you to partner with them, they will provide you with a written (and in modern times web-published) guarantee that you can get your money back if down the track they don’t pan out to be everything that you hoped they would be. Most reputable companies will extend a minimum 30-60 day money back guarantee. Ask specifically what is covered by the guarantee. Some companies only cover minor elements related to the costs even though you may be lead to assume they cover all aspects of your start up investment.
4)Is the company private or public?
There is really no major benefit either way, except knowing what tools and resources you will have available to determine the strength of the company. For example if they are publicly held, there are a number of filings that they must make available to you. If they are privately held you can run a credit check or various companies such as Dunn and Bradstreet will share the company’s credit rating to insure they are financially stable. If they are privately owned, it may become even more important to be aware of the time the company has been operating under current ownership.
5. Will the Company Provide You Annual Growth Trends/Sales Statistics?
If you want to know how a company is going to perform in the future, look at how they have performed in the past. Look at the sales performance for the most recent five years. If they won’t reveal sales figures or trends – there’s probably a reason. (ie. They’re embarrassed by it.) Reputable companies realize the need to provide you with sales information, especially if they are asking you to invest in their business or as a home based business partner.
If they will not give you this information, we suggest you walk, no make that run away. For those who do, you are looking for positive growth trends and sales volumes. That’s one indicator for selecting a growth company to partner with and one measure of how safe your investment may be. We don’t recommend partnering with a company that’s stagnant or declining in sales. It can also be pertinent if possible to have a look at what happened with the trends during a recession… If they can survive and grow then, then they should be fairly stable.
6. Ask about ‘Hidden Costs’.
I have researched many home based business opportunities and this can be a real issue. I will tell you now about some of the more common hidden fees that you don’t get told about until after you have made a decision.
Many companies offer websites as an added value when you start your home based business. It can be a very valuable and powerful tool. We have found that a ‘Free Website’ isn’t usually free at all. Some offer a website free but have a whole host of hidden charges associated with using it. Some charge to shorten unusually long website names known as URLs to a more manageable length. That’s just a way to charge you for that supposedly free website and not very ethical.
Many will not disclose this option until after you start. Others may charge you for user fees, full use of all features including the database, calendar, members areas or even monthly maintenance just to mention a few. Be sure to ask about any and all costs associated with the ‘FREE’ options like websites.
Make sure that if you are being offered a website, that hosting is included also… this is real big one – so many companies out there offer a free website… the catch is that you have to host it with their hosting company at your expense. This is usually an extremely inflated hosting fee. Reputable companies don’t have hidden costs – they practice full disclosure. If you identify hidden costs they didn’t tell you about voluntarily, be very cautious. You don’t want to be associated with a home based business that preys on others inexperience.
7. Ask about Awards that the Company has Received and what Reputable Organisations they are Registered With (ie. Better Business Bureau)?
This can be a bit misleading, so be very careful. A large number of companies will tout numerous awards from organisations that they have created. A reputable company will have numerous awards from tangible and respected organisations, such as the Better Business Bureau, or Ernst & Young, even right up to the U.S. Chamber of commerce.
Whilst awards and recognition on a global scale are evidence that company has a strong foundation and good business sense, always ensure that the awards listed are from reputable organisations, and ask about what criteria the company needs to meet in order to receive these awards.
8. What are People Actually Earning?
When I researched hundreds of home based business opportunities, I found very few were willing to provide income statistics about there representative for very apparent reasons. There are only a very select few who are actually earning an income, and they are the ones that were there at day one… which was probably several years ago.
Most people who represent them are actually running at a significant loss. The companies will probably tell you that they don’t release those statistics in the interest of protecting their member’s privacy. This is usually just an objection cover straight out of Sales 101 when someone asks for information that would embarrass the company. No income statistics will usually mean no income for you.
9. How are the going to help you, not only in the first 30 days, but for your business life?
This is by far the biggest indicator of your potential to succeed with this company. What do they offer you to help. Will there be charges for mentoring after thirty days, will you be required to pay to get access to the training website (if they have one) at any stage. What tools and resources do they have to help you achieve the success you deserve?
Sadly a large number of people and companies hide behind a home-business opportunity. They don’t care one way or another about your success, all they care about is how much money they can wrangle from you. They will offer to mentor you at a price, give you a “do it all” website for a price, they will basically offer you all of those things that you do need, particularly when you are first getting started at a price that you probably cannot afford.
10. What are their products like?
First of all, if they do not have a product, it is probably an illegal pyramid scam. Most people are aware of that now, so the less reputable companies will have a how to e-book or something of the like that you pay $997 for. (Which would struggle to sell on its own for $7?)
Other Companies will sell tangible products, but at absurd prices… Products that would not stand the test of time without a business opportunity to support them. You probably know some of the things I’m talking about like $13 tubes of toothpaste, $60 bottles of juice, or even a phone plan that will easily double your next bill. What you are looking for is a company that stands head and shoulders above the rest when it comes to things like price, product quality and customer satisfaction.
Another positive is sign is products that have patents. To determine if the company is right for you, look at the products, the quality and the price in particular and ask yourself… If there wasn’t a business opportunity here, would I still purchase these products? The answer will speak volumes about whether or not you should pursue a partnership with that company.
Reputable businesses will not hype you up on some figure head, the insane income opportunity or just how simple it is. They will provide you with all of the facts that you need to make an informed decision on your own… They know they have the best, they know you will join them sooner or later and they will leave you to decide when will be the time for you. They flaunt it – because they have it. Bottom line is that if you think the information is important, and they won’t give it to you before you join them…
BE VERY CAREFUL! The best situations are evident when they offer a wide range of support, training and tools to help insure your success. The best do not have hidden charges or undisclosed add-on costs. The best do not charge for the advice they promised to provide before you got started. You should expect to be paid for your efforts but don’t expect instant success. You have to work at it. If they tell you it doesn’t require hard work that’s a reason to steer clear in itself.