When you start a Home Based Business, it is very easy to get caught up in the emotion of the idea. Emotion is a wonderful thing and is the underlying factor of many success stories. However, it is critical for your success, to stop, step away from the emotion and evaluate the business model to determine if it is in line with your goals.
You should find the business model most congruent with your "goals". If you have aggressive goals such as replacing your current income the first year or making a Million dollars within 2-3 years, these are attainable if you have the right business model. Or possibly, you just want to build something slowly and methodically and in a few years replace your income to leave your job or have extra retirement income. Any of these are attainable but depend on the business model you choose.
Let's take a look at a few aspects of various business models and evaluate some of them.
What is a business model? It is a conceptual tool which identifies the aspects or qualities of a business, how it works, what it takes to operate and how the compensation works. Very simply said, it is the nuts and bolts of the business.
Some components to consider, from the size of the product line, profit margin on those products, retail vs non retail potential, growth potential and of course, the effort and time required to see profits based on your goals.
But let me step away for a moment to make a critical point! Only about 20% of businesses succeed. Regardless of the business, the numbers do not change very much at all. The reason is usually from lack of focused effort but also from unrealistic goals and expectation. This comes from not understanding the business model. When the business model fits with the goals you set for yourself, you dramatically increase the success rate.
Some questions to ask yourself about the business you are starting or evaluating, keeping in mind you must base this evaluation on your goals.
1) How many products will I have to be familiar with? Very important question since you must obviously know your products and be able to quickly advise a potential customer on the right product for them to purchase. Do you have the time to learn about hundreds of products?
2) What is the profit margin? Do you make $10.00, $100.00, $1,000.00 or maybe even $10,000.00 on a sale. Obviously, the higher the profit margin, the fewer customers required and the faster the potential for substantial income.
3) Does your product line appeal to a retail and a non-retail customer? In other words, who will your customer be?
4) What is the growth potential for this business? This is a "biggy". Take a hard look at how long it will take to grow your business to meet your goals. It is very important to focus on your goals and not get caught up in the emotion of the product or the company. To accomplish your goal, you must determine if this business will get you there and are you willing to do what it takes to make it. For example, if you have a goal of $50,000 profits in your first year, is that possible with the business you are evaluating and if it is, what will be required of you to accomplish it?
5) Does the company offer a specific training program designed to reduce your learning curve? It is important to know you are not on your own.
6) Does the company offer mentoring and support? Learn from those who are having success in order to feed on the success they are experiencing.
7) Does the company offer a sales program to allow you support in closing your sales?
8) And very importantly, how much time and effort will be required? If your goal is $50,000 the first year, how many people will you need to talk to in order to make $50k? $50,000 per year equates to $961.53 per week. How many people would you have to talk to every week to make $961.53? Again, looking at your profit margin, if your profit margin is $100 per sale, then how many people would you speak to in a week to get 10 sales? The same with a $1,000 profit, how many people would you speak with for the 1 sale?
My point is very simple. I believe in very big goals, but from a reality point of view. If you have major goals, such as leaving your full time job, making $100,000 plus per year from your business, living a lifestyle of abundance, you must take a serious look and determine if your business is the appropriate route to get there.
If you "choose" to stay in a job for the next 5 years and spend the time and effort to build a business slowly, that is fine. But realize there are choices. You must stay focused on what YOU want and make sure you have a business which is congruent with those goals.
To your success...
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