8 Questions to Ask About Home Based Business Opportunities
Get Answers to These Questions Before Signing Up for a Business Opportunity
Home business opportunities can be a great way to start a home business quickly with little investment. Business opportunities include direct sales (which includes network marketing), franchises, and biz ops (business in a box).
But not business opportunities you can buy into are what they claim to be. Some may be scams. But even if it's a quality business, the products or marketing plan may not be a good fit for you and your goals. If you're thinking about investing in a home-based business opportunity, here are 8 questions you need to get answered before investing your money.
1) What are the Startup Costs for this Home Based Business Opportunity?
Most home based business opportunities ask for start up money, usually to cover the cost of a kit, and other materials. Before investing in a home business thought, you want to understand what the costs are and what they cover. You should get answers to:
- How much are the start-up costs for the home based business opportunity you're considering?
- Are there ongoing costs? If so, what will they entail and how much are they?
- Finally, what do you get for your money? Is there a presentation kit and samples? Do you get a website? etc
This is especially important if you don't have much money to invest. Some businesses have hidden costs either during the startup or in maintenance, so you want to get these questions answered.
2) What Kind of Training and Support are Available with the Home Based Business Opportunity?
The training and support offered by a company will make a huge difference in your success. If you're looking at a network marketing company, is the sponsor and upline have good ethics and leadership skills? Are they dedicated to helping you succeed? If it's a franchise or business opp in a box, does it provide training materials and company leadership? In any business form, is there ongoing support to help you succeed?
3) What are the Rules for Advertising and Promotion?
Many home business opportunities have rules regarding how and where you can advertise. In some cases, you may have strict limitations, and in others, you may be able to do more or less whatever you want. For example, the company names are often copyrighted and/or trademarked and therefore you are not allowed to use them in advertising without permission. Some franchises provide you with a specific area, and you're not allowed to promote outside your territory.
The more options you have for selling your products and or promoting your opportunity the easier it will be and the more money you will make.
4) What is the Realistic Income Potential for this Home Based Business Opportunity?
Some businesses have considerably more income potential than others, and before you invest your time and money into any home based business opportunity, you should understand how much you could realistically expect to make. This means studying the compensation plan and running the numbers.
It's also important to understand your breakeven point and how long it may take for you to reach the level of income that the home based business opportunity claims is possible or that you've set as a goal.
5) How Long Has the Company Offering the Home Based Business Opportunity Been in Business?
While the idea of getting in the ground floor may sound appealing, companies without a track record are often unstable. In fact, most companies that fail, do so in the first five years.
New companies often try to lure you in with the idea that older companies are saturated, but in fact, that's a home business myth. If you have a great product and find your market, you can be successful.
With that said, if you're attracted to a new company, you can join, as long as you put things in place to protect yourself if the company starts to struggle.
Regardless of how old or new the company is, if it's in the area of direct sales, check if the company is in the Direct Selling Association, which requires a level ethics and standards for member companies.
6) What Products or Services are Involved with this Home Based Business Opportunity?
You might be lured in by flashy products and the promise of big bucks, but your success will depend much on how well you can promote the products or services. If you're not excited by what the company offers, you'll have a tough time selling them. So, ask yourself:
- What are the products and services like?
- Are they high quality and worth the price?
- Would you buy them even if you weren't a rep?
Also consider ease and difficulty of selling the product. Consumable products are things people have to re-order and replace. Consumable products create more stability and regularity of income due to repeat customers. Non-consumable products can only be sold once and then you have to go out and find more customers.
7) Are There Quotas or Minimum Inventory Requirements for this Home Based Business Opportunity?
If you are required by the company to buy a large quantity of products on a regular basis then it can be difficult to maintain the business or it can be financially stressful if you need to temporarily stop working your business. The last thing you want is a basement full of unused products. While it's nice to have a little bit of inventory, be wary of any company that asks you stock a huge amount of product.
8) Are the Products or Services that this Home Based Business Opportunity Will Offer Affordable?
The majority of the population must be able to afford the products or services the home based business opportunity is offering to customers. The more expensive the product or service, the harder it will be to sell and your target market could be very limited because fewer people will be able to afford it.
They also need to be worth the price. Most home business product are often slightly more than what consumers can buy locally. For them to buy from you, there must be a value that's important to them. That can be getting higher quality products. Or it can be personalized service from you. Or delivery to their door.
Updated May 2018 by Leslie Truex