Archive for

Newbie’s Best Home Based Business Guide

What is the best home based business for people looking to make money online? Many starting an Internet Business have no prior business experience and many will have little to no computer skills. Yet complete Internet newbie’s are coming online and making money. What do you need to know to discover the right business model to profit?

With new online businesses coming online it can be difficult to find the right model to profit. It becomes increasingly difficult for those with no prior skills or knowledge in building a business. Many newbie’s coming online have a higher chance of falling prey to the some of the misleading claims, and websites that misrepresent information online. If you are new to the Internet Business arena, and want to make money online, do not worry there are some guidelines to protect you and to assist you in finding the best home based business that will help you to make money online.

How To Find The Best Home Based Business

If you are ready to make money online then you probably do not have time in choosing the wrong opportunity. Our current economic situation is causing many to have an urgency to make money online. Regardless if you are experiencing an urgency to create an income, you have to take necessary steps and complete the necessary research to have you find the best home based business to meet your needs.

The list below is designed to help you find the best opportunity to help you to make a solid income online.

1.) Research Company Claims – Finding the best home based business for you, starts with Researching the online companies. You need to know everything you can about the platform that will assist you to make money online, you have to feel good about the credibility of the business. Research the company to see if there is an excessive amount of publicity regarding the business opportunity, both positive and negative. If there is an excessive amount of negative publicity then I would reconsider the business opportunity as a choice. Finding an opportunity with low negativity results and high publicity regarding the structure of the model is considered to be optimal choice for new business owners.

2.) Automated Business Claims – People first starting an Internet Business will get caught up in the automated business claims. These automated claims suggest that there is no work and you will be able to make a secure income online. While business models are allowing a more automated system, there is no business online that is totally automated. Be very careful of the automated business claims, as they are not factual and are misleading you at the beginning

3.) No Experience Necessary – Do you need to have an excessive amount of knowledge to start a business? While you do not need to have extensive business skills nor extensive computer skills to start an online opportunity, it is important for you to not be misled by no experience necessary. You will have to learn skills, and business building techniques in order to be successful online. Find out what type of training and skill building techniques the company, or your online mentor will be providing you.

4.) Training and Mentoring – Finding the best home based business in order to have you profiting is important. To make money online it is important to find the right training and mentoring to teach you the steps to creating a successful income model. For new online business owners, it is suggested to find a trainer who will assist them in learning how to market their opportunity, products and services for free.

5.) Multiple Product Ranges – When you are working online you never want to narrow your marketing audience down. You should look for models that offer multiple product ranges to enhance your earning potential.

6) Testimonials – If the company does not have testimonials of people that have had success with the business, or with the products or services I would question the authenticity of the opportunity. Research the testimonials, as these will answer a lot of questions about the credibility of the online opportunity.

7.) Business Enhancements – The best home based business is suggested to continue to grow and add enhancements over time. You do not want a business model that does not upgrade, or add new products to the market place. Find out if they add new products and services to their model, and what there five-year projections are for the business.

8.) Website Creation – When you are just starting off learning how to build a website is should not be expected. There are two things you should consider, what website does the company provide me, and if you found an online mentor will they create me a personal branded website. These are important questions to ask at the beginning of your business.

9.) Free Marketing Strategies – When you are just starting off your goal is to make money not lose money. Consider getting trained on free marketing strategies to grow your business until you see an increase in profits.

10.) Direct Sales Compensation – For those looking to make money online quickly it is suggested to review direct sales industries. Compared to MLM payment structures direct sales get paid to you first, and have a much faster turn around time than MLM industry.

Online Business Opportunities are creating more legitimate and lucrative ways for people to make money online. There are many compensation plans within Internet Business structures that are lucrative and hold large potential for new business owners. While the compensation structure should be a key components in choosing the best home based business for you, it should not be the sole factor in your decision.

Use the list above to help you find the best home based business opportunity that fits your needs.

Writing a Business Plan is Not Something to Delegate

How to write a business plan is among the very first decisions you, as a future business owner must make. Do you write it yourself, or give in to the temptation to take an easier path? By taking ownership of this first, most important step in building your business, you will gain far more than a crisp document to be read by others. You will develop a deep understanding of what it will take for your business to succeed. For this reason, it is essential that the business owner be the primary thought leader or sole author of the business plan. Outside help should be reserved for fine tuning, validation and in some cases to prepare financial projections.

Let it be YOUR Business Plan

As the founder and business owner you will be charting the course for the business. It will be important that the business plan be an extension of your personal vision for the company. For most entrepreneurs, the opportunity to call the shots and lead the way was an important part of why they wanted to get into business. Now is the time to start being a leader. Leaders develop their own plans and call the plays along the way. When it’s not your plan, you relegate yourself to performing as an operator. You will find yourself going back to the business plan someone else wrote to occasionally re-read the directions, or ignoring it altogether. Either way, the value of having a plan has been greatly diminished.

The Value is in the Process

The act of writing a business plan is one of forced discipline, problem solving and reconciling the results. When approached and completed in this manner the end product and the process itself will increase your self-confidence and assuredness about where your business is headed.

Starting with a simple business plan template, and there are lots of them available, force yourself to think through all the critical aspects of the business. This will be an iterative process that you repeat, fine tune and re-write. As you develop each section of your business plan, your thoughts about the other sections will evolve-even those that you’ve already written. You go back, edit and in the end, you make it all work together. That’s the idea. You are developing an understanding of the relationships between every aspect of your business.

To underscore the importance of writing your own business plan, take this little exercise. Read the paragraph below as quickly as you can. Then stop, take a breath and move on to the next one.

Who will my customers be? What problem will I solve for them? How much are they willing to pay to have this problem solved? What are my costs associated with each sale? Why will customers choose to buy from my business? How will I find customers? Who will sell, produce, and deliver? Which markets will I go after first? Why? How much will it cost to operate the business each month? What will my break even point be? How fast can I get there? How much startup capital will I need? How will I succeed?

Okay, slow down now and consider this: The most important question isn’t listed. The most important question is, “How are these factors interrelated?”

Imagine that today someone handed you the answers to all of the questions from our fast-read drill above. It would certainly save you a lot of time. Better still, these wouldn’t be just any answers, but they would be the right answers from a solid business plan for a business that had already been proven to be successful, a business just like the one you’re planning to start. You could read and re-read the answers many times over, practically memorizing them. You would know that they were the right answers. Yet, doing so will not help you develop an understanding of how the answers are interconnected.

If you change the way you plan to find customers, how will that impact your monthly operating costs? If customers are only willing to pay 80% of your planned price, what will that do to your break even point? How will the answers to these two questions impact how much capital you need to start the business? This example looks at just two questions. Realistically, the answer to each question is highly dependent on the answers to several of the other questions. In the end they must all work together and you must understand how they all work together.

If you develop your own business plan, section by section, thinking through all of the answers to the critical questions, you will also develop an intuitive sense of how they work together. It will require a lot of thinking and rethinking of your ideas and it will take time. This is not meant to be a fast drill. In the end, it will be the difference between memorizing the lines and actually being the character. Small business ownership is not the place to be reciting someone else’s lines. You are the character. Write your own lines. Be the leader.

When to Bend the Guidelines

There are some times to reach outside for help. For example, perhaps you would say, “I’m not a numbers person; I don’t think I can do the financial projections.”

First, plan to become more of a numbers person because business ownership is about numbers. Sales, expenses and profits are the three that are most important. Even so, many business operators who have a good feel for the numbers need assistance with spreadsheets and financial statements. It is okay to get outside help preparing your financials, just be sure that you understand them when they are complete. If you are going to pay someone to prepare them, be sure that they also save time to go over them with you from top to bottom. Ultimately they are your numbers.

Others might say, “I have great ideas, but I’m not a great writer.” It’s understood that there can be a lot riding on someone else reading the final product of your business plan-such as a loan or an investment decision. For that reason, if you are not a strong writer you should start by going through the process of organizing, writing and rewriting your own business plan as best you can. Force yourself to go through all of the steps of writing, rethinking and rewriting as your ideas evolve. Then, have someone else take your finished draft and craft the final polished document. What is important is that the final document must accurately reflect your concepts, ideas and thought process, not the editors.

What if I Just Can’t Do It?

Finally, some would say, “I want to start my own business. I am a strong operator, but honestly, I don’t think I could write a business plan myself. What do you suggest?” Simple: Buy a franchise! They are perfect for people who are strong operators where someone else provides the strategic plan, the systems and some guidance. This might be the best ownership model for you. That’s a topic for another day.

Do You Have Enough Money to Start Your Own Business?

Lots of variables come into play when attempting to figure out how much money you will need to start your own company.

Why is it important to identify those variable? Because the number one reason new businesses fail is that the person starting the business was not thorough enough in their information gathering stage and as a result, drastically underestimated the amount of cash it would take to run the business.

Successful business owners need to be optimists but being overly optimistic when determining how much money you are going to need to start and run the company is not a good thing. People wanting to start their own business tend to see the world through rose colored glasses. They see sales starting out strong and getting stronger, they see profits rolling in early in the start up and growing every month from then on. I could go on, but you see what’s going on here.

If you start out with an aggressive overly optimistic view or prediction of how well your new company will do, then there is a very good chance that it will take more money than you budgeted. Sometimes a lot more money. People often think that if they are off by a little bit then that’s okay, but it isn’t. If you don’t have the money to fulfill an order, then the order gets cancelled along with all the profit you were anticipating from the sale.

If you under estimate the amount of money you need by just a little bit and in the end you can’t come up with that little bit of money, then you are out of business. For example, if you make a big sale but don’t have the money to order the product you have sold, then you are out of business. I have seen companies “sell themselves broke”. You wouldn’t think it was possible but it isn’t that hard to do. A company that spends nearly all of their start up money in advertising must have money set aside to buy the inventory needed to fulfill orders. Too many times I have seen companies take 10-20% down payments on sales, then spend that money on sales commissions and in the end not be able to fill the customers orders. It’s easier than you think to do and if it happens to you, your new company is out of business.

So how much money do you need?

The first thing you need to do is NOT think about the company. The first thing you need to know is how much money you will need to live on until the company turns profitable. That means an honest assessment of your living expenses. You must know the bare minimum your family will need each and every month until the company can begin contributing to those expenses. Mentally this is a very tough thing for people to do. There is a tendency to say things like “If things get tough, we will just cut back”. With that attitude, you are almost certain to fail. You can’t put the future of your company on something as vague as ‘cut back’. You have to know the exact number you need every month. Just to be safe, you should run two sets of numbers, the ‘what I think will happen’ and the ‘worst case scenario’ too. That’s a smart thing to do. If your business plan shows the company will be profitable in 12 months, then run a worst case scenario. It may show 18 months to profitability. Be prepared for your worse case scenario.

Now, here is common problem with new owners. They do not put the money for their projected living expenses aside in a totally separate account. If your worst case scenario shows you will need 9 months of expenses, then you should have 9 months expenses set aside in a separate account earmarked just for living expenses. Why a separate account? Because if you underestimate the amount of money you need to start your business then you do not want to spend your living expenses on the company. If it happens, it will be tempting but you absolutely must not use your living expenses account for anything else.

At this point, a lot people are going to say “No way. If I wait until I save that much money, I’ll never go into business for myself”. If you are thinking that, then you are not prepared to go into business for yourself and you SHOULD NOT even try. If you don’t have the discipline to execute this sort of plan, then you most likely don’t have the discipline necessary to start and grow a business either. That’s probably not something you will hear from your family or friends but I am neither of those. I’m just trying to get you to open your eyes.

If you are still reading then I’ll; assume you agree that you need to set aside your living expenses. Next we move on to the actual money it will take to set up/start your business. This is not the cost of running the business, but just starting the business. There are a lot of one time expenses which you will incur when starting a business and these are totally different from the expenses of running a business.

Here is a short list of “Start Up Expense Items” you may have to consider. This is not all inclusive, and is designed to hopefully get you to really start thinking.

Office Supplies

Deposits – telephone, utilities, city permits, etc.

Insurance – Business and Property as well as Liability and possibly Worker Compensation Insurance

Signage – A simple neon sign on the front of your building can cost thousands of dollars.

Licenses and Permits – There may be special permits or licenses required for your industry. These can be very expensive if your business is highly regulated at the state or federal level.

Furniture and Fixtures – Office furniture, counters, displays, office equipment like fax machines, computers and printers.

Equipment Installation – If your business requires specialized equipment or is a highly regulated industry, then you may be required to have all equipment installed by ‘licensed companies”.

Facility Lease Payments – For a new company, you can expect to have to personally guarantee all leases as well as have to make payments in advance.

Professional Fees – Fees related to the legal entity you elect will vary. A simple “Assumed Name” or DBA (Doing Business As) is the cheapest but may not be the right choice for you. You will need some legal advice on the proper way to go and it will not be cheap. You might also like to meet with an accountant (CPA) to assist you in setting up your bookkeeping system.

Cash – this is the amount of daily cash you will need to put in your cash registers to get started.

Employee Cost – in some cases, you may want to hire an employee to help you with the start up activities. If this is the case then budget for their salary and federal taxes.

Unexpected Expenses – because no list is complete, you should budget an amount for ‘things I forgot’ or ‘things that cost more than I thought they would’. A good number for this category is to total up all the other expenses and then take 15% of the total for this. The number may seem high but it’s better to plan on the fiscal conservative side.

Advertising – Some people think it’s strange to put a advertising category in start up expenses but think about it. You don’t want to wait until you have opened the doors on your new business to start advertising. You want your initial advertising timed to get people in the door from the very first day. Some advertising mediums require up to 60-90 days advance notice. This is especially true if you are considering any magazine advertising. Check with the companies you plan on advertising with to make sure you plan according to their schedule.

Conclusion:
All of the expenses outlined in this article are needed before you ever even open the doors of your new business. Take your time and prepare thoroughly. You don’t want any unpleasant surprises when working to get the doors open on your new business.

In my next article, I will be discussing the major categories of the expenses of actually running the business. Those are more of a recurring nature.

Plan wisely.