Home (noun) – The place where you live
Based (transitive verb) – To form or provide a base for
Business (noun) – an industrial, commercial, or professional operation
Hmmmm. Not really all that enlightening is it. The problem with this title is that it covers an extremely broad group of activities. So let’s try to narrow it down.
Small Businesses
Firstly there are the Home Based Businesses that are essentially a Small Business. These are usually a more socially acceptable style of business and aren’t that different from a Bricks and Mortar business. They will generally need you to acquire assets and sometimes employees. They come in two main varieties.
- Your own idea or concept. A good example of this is a Self employed Builder, or someone who runs their own cleaning company, small tour company or even a Ice cream van. These are cheaper to start but you’ll generally have to learn all the ropes yourself.
- A Franchise. You buy the name of a company that is already doing what you want to do. This will give you a set of systems to follow and also brand recognition, the downside is this could cost you anything from $5,000 – $500,000. Eg. Jim’s Mowing or a nationwide home childcare company.
Internet Marketing
Next we have Affiliate marketing.
Essential what you do here is advertise someone else’s product. I like to think of the guys on the infomercials that change products each week. You usually have to pay either a one off fee or a monthly subscription. You then go out, advertise their product or service and send people to the company’s website and get a commission for each sale.
NB. that for this the company will usually provide you with or have their own marketing website; you just have to get the people there.
Related to this are Internet Marketers that come up with their own ideas and market/sell them online. This is extremely broad and is only limited by your imagination. You could be a web site designer, make your own range of calendars and sell them online, make e-books on home repairs or how to raise children. The JOY of the internet is that you are no longer limited by where you live and no matter how small your niche market might be you can access the whole world from your living room.
Network Marketing
MLM (Multi-Level Marketing) – A lot of people dread these 3 letters!
These guys are into direct sales but usually for pretty low cost/profit items. Traditionally it was all about talking to your friends and family, making “lists”, everyone is a potential customer, and hotel/living room meetings. We’ve probably all had a friend or family member try this at some stage. Luckily, there is a trend away from this these days using something called attraction marketing, but that’s a story for another day.
MLM is good in the sense it has a very inexpensive start in point, usually under $500, but you need to keep an inventory of the products at home and move a lot of it to make a significant income. Also the compensation plan can be ridiculously confusing. One of the biggest companies we probably all know is Amway, but there are many smaller and niche companies out there.
“Top Tier” Direct Sales Opportunities –
A Top-Tier business has aspects that can be similar to MLM with a couple of very significant differences. As we mentioned an MLM business deals in low cost items, so it can take you a while to build up the income you want. With a Top-Tier company you directly sell an initial product with a retail value of between $1500-2000 leaving you with a profit of $1000+. They will generally also have higher end products that can give you commissions of anything up to $10,000. For the same amount of work in finding customers/business partners as an MLM company, you can see it is much easier to generate a higher income. Also you generally wont have to “stock” the product yourself. You find the customers, they pay you direct, you pay the wholesale amount to the company and the company ships out the product.
Naturally the initiall outlay of money in these opportunities is higher than an MLM based business (usually the cost of the initial product) but it is much easier to make that money back. With Top-Tier businesses it is possible for anyone to earn a 6 figure income in their first year.
Unlike the first category of small business’, which will often take 1-4yrs to turn a profit, if you are willing to learn, put in a little effort and hard work the results can really pay off quickly.
Scams
These are the main types of Home Based Businesses you could get involved with. Unfortunately there is also another sort of “opportunity” out there.
These are advertised all around the place and are basically “get rich quick” schemes that are devised to part the eager, honest, if slightly naive, man or woman from their hard earned cash. They come in a multitude of different forms and can be represented by low or high cost opportunities.
If you follow what I say then you should be able to steer clear of them.
It is sad that this group exists as it brings down people’s opinion of the all home/internet based businesses and makes everyone sceptical. The reason I say sad is that some people who might otherwise have been amazing at a given opportunity will pass it up because they or someone they know has been burned in the past.
So now that we’ve had a view of the different types of businesses out there… Which is the right fit for you?
