Which Home Based Business Option is Right for You?

Deciding between Starting from the Scratch, Buying a Business, Buying a Business Opportunity and a Franchise Business from home.

choosing the right home business to start

Even though you have read about the various options available to you when wanting to start a business from home such as starting a business from scratch or buying into a existing business or business opportunity, the choices can still seem confusing. At the end of the day, you might want to decide what option is right for you based on your personal likes, dislikes, experienced, skilled, ability and what you really want from your business set up. Lots of other factors such as the amount of money that you have to spend, the amount of time that you want to put in your business start up will all make a difference in choosing the right business to start at home. No business startup is guaranteed 100% rate of success. Even though you started at home. But a business does have a better chance of success if it is closely matched to your requirement, your need and your ability.

Here are some of the common factors that you should consider in order to choose the right business to start at home.

Are you a natural seller?

A majority of the people that buy into business opportunities and direct selling opportunities do not stop to consider this fact. The result is that many people sign up over the direct selling companies when in fact they do not have any idea how they’re going to sell the product beyond their immediate family and friends. If you do not have a natural talent or liking for selling directly to people on a face-to-face basis, then the option of direct selling and business opportunity may not really be a good one because both of these usually require active selling. You will be better off with a franchise or cultivating business idea that suits your personality better.

Do you have your own idea for a home-based business?

If you have your own idea for a home business home based business, you might want to start from scratch. Starting from scratch has its own advantages. If it is a new business idea, you will have less competition. Starting from scratch can also mean less startup capital. Starting a home-based business based on your very own idea means that you get to do exactly what you want to do and to shape the business end the exact format that you desire. Franchises and direct selling require that you closely follow the parent company’s established system.

Do you want your business to be independent?

If you are an independent person and would not like to run a business on somebody else’s terms, policies and regulations, starting from scratch is again option for you. Franchisees and direct selling usually do close monitoring of the business owner as well as telling you how to run things. At the end of the day, with a home-based franchise, the franchisor is the boss. If you have your own idea about how you want to develop and grow your business, starting from scratch is a good option. Starting from scratch also allows you to put in as much or as little effort as you want and work on your schedule along with putting in as much time as you desire.

What kind of income are you looking to generate from your home business

The amount of money that you wish to make also decides the kind of business you choose to start from home. Startup cost also direct you towards certain business models and keep you away from others. It is a fact that half of the people working in direct selling opportunities such as Avon or Mary Kay cosmetics only make $500 or even less in a year. Generally speaking, starting a business of your own from scratch is more profitable in the long run because any effort put into the business goes directly towards increasing the profits and benefits for you.

How unique you want your home business to the

Do you have a unique business idea or do you want to stand out from the crowd by starting a business that is different from all others. In this case, starting a business from scratch allows you to accomplish this goal. Franchisees and other opportunities are closely affiliated with established corporate identities. While this works for people who like to be associated with known corporations and brand names, others may want to carve their own identity.

What are your long-term goals

Your long-term goals will also determine the kind of business opportunity he choose. Depending upon how much money want to make in the long run, how much effort you want to give the business, how much you want to work, your retirement plans will all shape the choices that you make for your home-based business. Your long-term goals have to be compatible with your home-based business. If you’re contemplating existing business opportunities that you can buy into, look at the lives of the existing business owners who have invested in the same opportunity. Were they able to leave their careers behind? Were they able to become independent and lead the lifestyle that they always want to, did choosing the business opportunity help them accomplish their retirement plans? What is the reality behind the stimulating sales pitches for a business opportunity?

Disadvantages of A Home Based Business Opportunity

Disadvantages of a home based business opportunity

home-based business opportunity

There are some downsides to choosing a business opportunity as a home-based business model as well. Here are a few points you should consider

  1. While many people like the freedom that comes with working with a business opportunity, for someone without any experience with the prior business for themselves this can be a disadvantage. The probability is that you would not be provided with any training or ongoing support for the business opportunity and this leaves many people high and dry when it comes to starting off and generating income. This means that many people who sign up for a business opportunity could have potential problems starting up.
  2. There is no regulation governing business opportunities by the federal government and the state and local regulations also differ. For this reason there is a lot of scam and fraud in the this field as well. Beware of business opportunities that try to over sell and if they sound too good to be true, they probably are. Ignore any business opportunity that claims to earn you thousands of dollars without doing much work or menial work like stuffing a envelopes etc. However, the FTC has made great effort to root out these scams and they are much less rampant than they used to be some years back.
  3. Most owners of legitimate business opportunities do work harder than they ever did in a regular job. Chances are you will have to as well.
  4. The success of a business opportunity is directly proportional to your personal effort. Since it is not a franchise, you would have to rely more on your own personal effort and tactics. This could mean that there are more chances of the business to fail. Be sure to have a sufficient financial backup to support yourself and to weather a serious business setback.
  5. As in any other kind of business, you should explore your options before you invest your hard-earned money in a particular business opportunities. While most of the business opportunities cost little with little upfront payment, there are those that can be expensive such as applying for a dealership for a well-known company or product.

What Is A Home Based Business Opportunity

What are the business opportunities

business opportunity

If you are looking to buy into a business that does not fit into the category of a franchise or direct selling, the odds are that it is a business opportunity. Usually franchises and direct selling have a well-defined infrastructure and can be easily identified. Business opportunities come in all flavors, shapes and sizes. For this reason, you need to be extra careful when choosing a business opportunity as this field has its share of scam artists as well. In general, a business opportunity can be defined as an idea, product, system or service that someone else has developed and allows another entity or business to use that same product, system or business model to start a business on their own.

Usually the business opportunity belongs to one of these following categories.

  1. Broker – A broker is someone who buys or sells products or services for parent company often acting as agent. Examples include real estate and insurance brokers. Although brokers are independent contractors they are generally paid commissioned by the parent company for their efforts.
  2. Dealers and distributors. – Dealers and distributors is often an interchangeable term. However, there is a difference between the two. Dealers usually sell the consumer product directly to the consumer. For example, a dealer who sells carpets produced by several different companies to customers and uses his or her home for operating. Distributors get their supply from wholesalers and manufacturers and resell them to sales organizations, brokers and dealers. Distributors do not sell to consumers generally however some of them do through direct mail orders or online.
  3. Licensing – Licensees buy the right to sell, market, produce or use established product brand names, technology and systems. This business model is a little bit like a franchise but licensees have greater freedom to run their business according to their requirement.
  4. Mail Order Businesses – Mail order businesses take orders for product over phone and e-mail on the Internet and send those products directly to consumers. In some cases mail order businesses can have the products drop shipped as well which means that the product is shipped directly from the manufacturer removing the need to maintain the product inventory while dramatically improving cash flow.
  5. Vendors – Vendors sell material and supply for the companies for their own consumption for example office supplies, for use in their own production process, or for resale to consumers or other companies.
  6. Manufacturers – The manufacturers build and produce products that are eventually sold to consumers. Manufacturers can also sell to consumers by the same methods as mentioned above such as direct sales, mail order or the Internet. They usually sell to brokers, dealers, wholesalers and others.
  7. Wholesaler – Wholesalers buy products directly from the manufacturers, put the profit margin and sell them to retailers. Retailers are people who sell directly to the consumer. In most cases wholesalers do not sell directly to the public.

The business opportunity that you choose will be either one of these or a amalgamation of the above mentioned types. The kind of business opportunity you choose will dictate the kind of business you run and the kind of lifestyle you have. It will depend the kind of job that you need to do in order to run your business and make it successful. In order to make the right choice, make sure that you fully understand what the business opportunity requires you to. Do your due research and figure out if your strong points and interests match the requirement of the business opportunity.