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.

What Makes A Home-Based Business Successful

If you’re looking to work from home you have many choices. There is no shortage of people willing to take your money in return for a home-based business opportunity. How do you know which opportunities are legitimate businesses and of those which one is right for you. Before you decide if the business opportunity is right for you here some things you should look at.

•The company
What is their track record, how long have they been in business, what is their standing with the Better Business Bureau?

•The product or service
Is this something people want or need, will you have competition, is it priced competitively

•Support and training
Are you completely on your own or will there be people and resources to help train and guide you

•Cost
Is the product or service priced competitively, is the cost of starting the business affordable for you and others

•Compensation plan
Is the compensation plan fair, understandable, and most of all can you make money

When researching the company check with the Better Business Bureau. If a company has no complaints that are no guaranteeing that they are a reputable company. Likewise, one or two complaints does not necessarily mean the company is bad. It’s just one more little bit of information. Remember anyone on the web can write about a company in a positive or negative manner, so you need to do more than just read anonymous opinions. It is best if you can talk to a person that you know and trust that has first-hand knowledge of the company. The key here is to be thorough and take your time; you should not feel rushed or pressured into making a decision.

When deciding whether to start a home-based business the product or service is very important. There is a difference between wanting something and needing something. If what you’re selling is needed by many people you have a much bigger market in which to sell and are more likely to be successful. The price of the product must be competitive. Some network marketing companies claim their products are a higher quality than similar products available in stores. And because of this their prices are a little higher. Even if their claims are true and their products have better ingredients you’re now at a disadvantage in competing for the sale. Another important factor is convenience. Not everyone wants to shop a month in advance for house daily household products. Or have to fill out paperwork, or have a small window of time in which they have to pick up their products. The process must be fast easy and fit into their busy schedules.

The company must provide support and training. The training should be ongoing, and you should have a mentor or person that has an interest in helping you succeed. They should provide websites and conference calls as training aids as well as one-on-one conversations with your mentor. Think of them as your business partner. They are there to help you but remember it is up to you to ask for help. The lack of a large paragraph here on training and sport should not indicate that it is not very important. In fact it is very important. The chances of you succeeding all on your own without any help or training are very low.

We have already talked about the cost of the product. It must be competitive! But the cost of starting and maintaining the business is important also. Does the price make sense to you, will others be able to afford it. The price range for home-based businesses range from just a few dollars to several thousand dollars. Only you know what is right for you. Just remember in order for you to be successful presenting this to others you must believe that the opportunity is a good one and that includes the price.

There are many different types of compensation plans. A few of the different types are unit level plans, forced matrix plans and binary plans. I am not going to go into detail of the different plans here, but you should know there are several out there and they differ greatly. If you are seriously considering starting a home-based business you should research that company’s specific compensation plan. If someone introduced you to a business they should give you specific detailed information about the compensation plan. It should also be on the company’s website, explained in detail and understandable.

There are many different home-based businesses out there and if you look hard enough you could find several people in each one that are very successful. But the bottom line is can you be successful? Is this the right business for you? Why do some people succeed in a particular business while others fail? Of course there are many reasons for this, communication skills, work ethic, financial resources and desire to name a few. I believe one of the most important factors if not the most important is your belief in the company and its product or service. It is very difficult to sell or promote your product if you believe it is overpriced, not needed or of poor quality. The same is true for the business side of it, if you don’t believe in the company or are unwilling to do what is necessary to build your business, you will have a very difficult time convincing others to do what you are unwilling to do.

I believe if you find a solid company with a product you believe in that is priced competitively there’s no reason you can’t be successful. Network Marketing has received some bad press over the years and to many people it has a bad reputation. Don’t misunderstand me there have been some less than truthful companies over the years. But the Network Marketing business model is a legitimate one. Personally I like companies with very few restrictions and a lot of freedom. One example of this is a company that does not require you to bring new people into the business. Of course it is always an option but you are not required to do so. In other words you could choose to market the product or service and make a nice income without recruiting others. Some companies don’t allow this, they require you to promote the product and recruit others into the business in order to make an income. I like knowing that I can make an income from marketing the product without recruiting. This is very important to me because this makes the business legitimate. The product is real. People want it because it benefits them. It has value. Otherwise you are just in the business of recruiting people. You get two people to join who get two people and so and so on. That’s not a real business. The foundation must be a product or service that has value to people.I think this option also makes it more appealing to others.

So take your time and do the research. Find a good company with a great product and join those who supplement their income working part- time from home.

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!