How To Discover Your PERFECT Home Based Business – The 1st Of 7 Keys – A Profitable Business

This is the first in a series of seven articles that tell you how to sift through all the home business opportunities you hear about every day, and find the PERFECT home based business for you.

Are you ready to start making some real money in your own home business without working 60 hours per week? Are you ready to stop throwing your money down the “home business opportunity rat hole”?

Read on and I’ll show you how to test every home based business opportunity to make sure it fits the definition of The PERFECT Home Business, before you invest your time and money. Then, focus on the one that fits the best, and make it a success.

Each letter in the word “P.E.R.F.E.C.T.” stands for one of the 7 keys to finding the perfect home based business. Each key is something your home based business opportunity MUST have in order for you to enjoy the financial freedom and lifestyle you want.

What makes an opportunity P.E.R.F.E.C.T.? The “P” in PERFECT stands for “Profitable”. If your business isn’t profitable, why do it? If it isn’t highly profitable, you won’t be able to earn enough to make it worth your time, or you won’t be able to grow your business by reinvesting your profits back into the business.

“Profitable” means:

• High gross profit margin (preferably greater than 65%) and net profits of 20% of sales or better before taxes.

If you sell something for $1.00 and it costs you $.50, your gross profit margin is 50%. That’s about the profit margin most retail stores get. You need to do better than that to survive and thrive in your home business.

All of your other expenses such as advertising, overhead, and so on, have to come out of your gross profit before you have any “net profit”. If you sell something for $1.00 and the costs of your product, including all of your other expenses, add up to $.90, you only have ten cents per dollar in net profit (that’s a 10% net profit).

So, for example, if you want to earn $50,000 per year from home with a 10% net profit, you would have to sell $500,000 worth of your product. Wow, that’s a lot of product. Wouldn’t it be better to only have to sell $250,000 worth of product, or even less, to earn your $50,000 income goal?

That’s why you need a business with at least 20% net profit. And, if you really could sell $500,000 worth of products, wouldn’t it be better to have 20% net profit and earn $100,000 per year on that $500,000 in sales? The PERFECT home based business may even enable you to earn up to 40%-60% or more (sometimes more than 90%) in net profit. Yes, really.

At 90% net profit you would only have to sell $55,556 worth of product to earn your $50,000 income. That’s my kind of home business!

• “Profitable” also means a net profit (your “salary”) before taxes of at least $50,000 per year. And $100,000 or more per year would be more like it (unless your goal is to supplement your income to the tune of $500 to $1,000 per month. But, would you turn down $50,000 per year if you didn’t have to work any harder than you did to earn $10,000 per year?).

Your goals may be different than mine and you may be satisfied with lower profits. But, I believe you need to set your goals high, yet at a reasonable level. Then, even if you fall a little short, you will still be very successful.

• Low overhead (less than 5% of sales). Overhead is all the “fixed expenses” of running your business such as computers, printers, other equipment, furniture, office supplies, and office space rental costs.

A home based business is ideal for keeping overhead low, but you still have to be careful to minimize the space needed, the cost for utilities, and the equipment needed to run your business. Don’t go hog wild buying an expensive desk and file cabinets with your first profits. Instead, reinvest those profits in your business and keep your overhead low. You’ll be glad you did.

• Low labor content for manufacturing, assembly, or shipment of the product(s).

You don’t want to spend all of your time assembling and shipping something you sell. Most of your time should be spent on marketing and growing your sales and profits. The PERFECT home business enables you to sell products that involve little or no labor cost to make them or ship them.

• A high average order. Believe it or not, it takes as much effort to sell a $5.00 product as it does to sell a $50.00 product or a $500.00 product, maybe even more effort. So, the PERFECT home based business offers products with a high perceived value and a price well above $20.00. The exception is when you want to sell a low priced product, or even give something away, just to get customers added to your e-mail list so you can sell them other more expensive items later.

• Low initial investment required (less than $1,000 preferred). I don’t know about you, but business opportunities that require $5,000, or $25,000, or more to start scare me a little, unless the return is well worth the risk. There aren’t too many people that even have that kind of money to invest in a business. Why not find the PERFECT home based business that only requires $1,000 or less to get started, perhaps even a few hundred dollars?

• Small inventory with rapid turnover, or no inventory required. Imagine your garage or basement stacked from floor to ceiling with products waiting for someone to buy them. Yuk! Much better to fill each order as it is received without having any inventory in your home, or at least a very small inventory. The PERFECT home based business will allow you to do that.

• Repeat or backend sales potential. One of the highest marketing costs is the cost of getting a new customer. If that customer buys your product over and over from you (repeat sales of a consumable product or a monthly membership fee, for example), or if the new customer buys other products from you later (backend sales), you can dramatically increase your sales and profit. This is a very important ingredient in the recipe for a successful home based business.

21 Key Questions To Ask Before Starting A Home-Based Business – They Do Need Answering

Before starting any home-based business it’s imperative to ask yourself a few key questions.

The questions have to do with three main areas of business – the business type itself, the products themselves and the services offered. For this article, the home-based business will focus on eco-friendly health and wellness products although most of the questions will equally apply to any product sector.

In terms of the business itself, you may have already decided, after researching the vast amount of data online about home-based businesses, that this is what you really want. Home-based businesses are viable but do require planning and work.

In terms of the products themselves, you may have stumbled across or been told about some amazing new product or discovery or you may have been a user for many years. In either case, you want to share all this ‘good news’ with as many others as possible.

In terms of the services offered, you may be in a position to offer home-delivery, no-question, money-back guarantees or even be the money collector for the supplier.

Let’s look at the first area – the BUSINESS itself. Here are some must-ask questions.

Will I be able to…

  1. Earn residual income as well as make the money up-front?
  2. Be my own boss or CEO? Maybe this is important because you have always worked for someone else and have never been boss. Be careful here – being boss means doing ‘bosses’ kind of work.
  3. Do the work from home? This may be the most important thing because of physical circumstances, transportation limitations and more.
  4. Get sufficient business training when I need it?
  5. Avoid direct selling because I am not a salesperson! That is, will I be using warm and/or cold marketing techniques?
  6. Earn the income while genuinely helping others? This may or may not be important to you. Do you want to just provide products or do you genuinely want to help people improve their health, wellness, lifestyle or whatever by these products?

Will I have to…

  1. Lay out a lot of ‘start up’ money? How much and when in the start-up process?
  2. Carry inventory? Do I have space and do I want to keep boxes of product in my home?
  3. Offer personal satisfaction guarantees? For example, will I be offering the return policy or will the manufacturer be offering the robust return policy?
  4. Purchase the products for my customers and then have to deliver them’?
  5. Be involved in the money exchange?

Now, let’s look at some PRODUCT questions.

Will the product(s) that I am involved with…

  1. Provide a healthier home, body, skin, nutrition etc
  2. Be environmentally ‘friendly’?
  3. Be safe to use for adults, children and even pets?
  4. Use scientifically tested and verified ingredients?
  5. Have a proven track record?

Lastly, I want to look at the area of SERVICES. If you are putting yourself out there as an expert and the CEO of your own, established and creditable business, you should ask yourself the following questions.

Will I or should I be offering…

  1. Membership Protection (if there is a continual membership required) such as auto re-ordering?
  2. Online ordering?
  3. Door to door delivery?
  4. Strong product support from the manufacturer or his representatives?
  5. Strong team support if this is a type of business structure that involves up-links and down-links?

It seems like a lot to think about, but I assure you that these are all important questions to ask no matter what business area you are contemplating.

I have personally found in the eco safe health and wellness products arena, that these are critical questions to ask yourself. And, it is important that you be satisfied with the answers before heading into the world of home-based business.

Slow down, take some time and ask these tough questions. You will be the better off for it.

Why You Should Consider Looking At Starting A Home Based Business

Why are more Americans starting their own home based businesses? The numbers have been out the roof with the number of people who own and operate their own business from home. What a great time to start one for yourself! With the high unemployment rates and threats of layoffs people are starting to realize that the days of job stability are over. Some people think that home based businesses are rinky dink companies selling cheap products that no one buys. That couldn’t be farther from the truth. Majority of home based business opportunities are with reputable companies with superior products,services, and they allow you to make a great income selling their products or services from home. Some of the top home based business company’s make over $1 Billion dollars in sales every year. Even Bill Clinton fully endorsed the industry because of the opportunity it gives to Americans to live the American dream through financial freedom, and business ownership.

Types Of Home Based Businesses

Product Based Companies

Product based home businesses sell products to consumers directly through a independent distributor which would be you. There are thousands of companies that sell anything from nutritional products, makeup, juices, to Tupperware. The sky is the limit with the amount of different companies that sell different products that you can choose from.

Service Based Companies

Service based home based business opportunities sell a service versus a consumable product. These companies include insurance,electricity and natural gas,internet,mobile phone,legal, and many other services.

Unlike product based opportunities you are offering a service to people instead of selling a product. These services offer substantial savings to consumers and gives you an opportunity to earn a great income just for referring their particular service.

Affiliate Programs

Affiliate programs are similar to ones I listed above but the only difference is how you get paid. With an affiliate program you get paid a % on the sales that you make when you sell their product or service. These do not offer any type of residual income that the other companies pay. Residual income is when you get paid over and over again for selling a product or service once. Affiliate programs pay you one time for every product or service you sell.

Benefits Of Owning A Home Based Business

Low Start Up Costs

Starting a home business is the cheapest and easiest way to start your own business. Most traditional brick front businesses cost hundreds of thousands of dollars to get started and takes years to get into profit. The great thing about a home business is that it’s really affordable from $100 and up to get started and your up in running in minutes not months.

Your The Boss

When you start your own home based business you are the boss. You work when you want and how often you want, but if you treat it like a hobby it will pay like one. So treat your business like a multi million dollar corporation because it can pay you like one.

Unlimited Income

The sky is the limit with the income potential that a home business can generate. There are people making millions of dollars in the industry. Instead of earning a hourly income you are earning a weekly or monthly residual income and once it’s up and running you are getting paid regardless if you work or not. That’s the freedom that a home based business can allow for you.

Tax Benefits

When you start any type of business including a home business you get tax breaks that regular employees do not. Here are a few examples of tax breaks:

  • Mileage- Write off mileage when any kind of business trip is made.
  • Utilities-Cell phone, internet
  • Travel- Let’s say you go on vacation. You can write off the expenses as a business expense if you do it right. Why not have a business meeting in Hawaii?
  • Meals- Write off your meals when you are doing business and this includes on vacation.

Check out a book called Lower you taxes big time! By Sandy Botken. He use to work for the IRS and gives you loop holes you can use for your home based business to take advantage of the tax breaks.

Overall I hope you get an idea of why it’s a great idea to start your own home based business. Imagine earning thousands of dollars every month and getting to spend more time with your family and doing the things you love. The supplemental income can have a great impact on your bank account and you will have more money to spend or save or do whatever you want to! So I hope you make a decision to start your own business and cash in on the American dream!