| I have been an entrepreneur for as long as I can | | | | biggest headaches in business. Hiring firing, and |
| remember, and the last several years of that | | | | managing can be one of the most |
| have been spent in the home based business | | | | time-consuming, expensive and potentially |
| industry. | | | | frustrating aspects of business. |
| Even before the economy took a downturn, I | | | | 7. Has Low overhead. It does not need an |
| always heard people say they would love to start | | | | expensive location; it does not need large |
| a business, and how great it would be to get rid | | | | amounts of electricity, advertising, legal advice, |
| of the man and work for themselves. | | | | high-priced employees, large inventory, etc. |
| After having some time in the trenches of | | | | 8. Has customers that want the product you are |
| business ownership, I find it very interesting how | | | | selling. Pretty obvious, right? I agree, but you |
| people seriously contemplate starting different | | | | might be surprised how many people fail in |
| kinds of businesses without really considering what | | | | business because they try to sell products or |
| goes into starting and running it successfully. | | | | services before they know there is a demand. |
| For example, one I hear quite often is "I would | | | | Assuming you can get good profit margins, the |
| love to own a restaurant". Maybe, but be aware | | | | best situation is where you can sell something |
| that restaurants are rarely (if ever) something | | | | that people are already buying from places they |
| you can start without significant capitol up front, | | | | are familiar with and trust. |
| they require long hours (including weekends), and | | | | 9. Has "inelastic" product demand. That's a fancy |
| the management of restaurant employees is | | | | way of saying people will buy it almost regardless |
| typically very challenging because it is an | | | | of price. A great example these days is gasoline. |
| extremely transient 'career field'. | | | | The market has also shown that people buy |
| So while there is a glamorous side, you should also | | | | health and wellness products regardless of |
| be ready to sacrifice the long hours, weekends, | | | | whether the economy is strong or weak. |
| and be ready to fire and hire people on a | | | | 10. Does not require you to use your home as a |
| consistent basis. | | | | warehouse. This applies more to the home |
| Its just one example, but the point applies to any | | | | business types, but sometimes people in the |
| business you are thinking about starting: seriously | | | | internet age forget how many companies required |
| consider what goes into running and starting the | | | | you to buy a large supply of their product and |
| type of business you are considering. | | | | keep it in your house before you could sell for |
| The natural question I get whenever I get on this | | | | them...not necessary any more. |
| soapbox is "what factors should I consider?" and | | | | It's hard to argue with a business that can meet |
| "what are the characteristics of an ideal business?" | | | | those standards! :-) |
| So here is the list I put together. Its not | | | | So the natural follow up question is what kind of |
| necessarily exhaustive and I admit that I am | | | | business has those key components? |
| biased after spending time in the home based | | | | Traditional Franchising? Nope. Almost always |
| business industry, but take a look at the list and | | | | requires large amounts of capital to start and |
| see if you agree... | | | | can't be done in your spare time. |
| The 10 Characteristics Of An Ideal Business: | | | | High End Direct Sales? Nope. This is a good option, |
| The ideal business... | | | | but the large up front buy-in puts it out of reach |
| 1. Is geographically flexible. This means you can | | | | for a lot of people. |
| make money and be effective from almost | | | | Affiliate Marketing? Nope. Can be done in your |
| anywhere. Physical presence is not a necessary | | | | spare time, but its very difficult for affiliate |
| ingredient in the money equation. This key | | | | marketing to become residual. |
| characteristic opens up a lot of options...Aspen, | | | | Start A Company From Scratch? Nope. Difficult |
| Monte Carlo, Switzerland or maybe the beaches | | | | to do with limited time and low capital outlay |
| of Brazil! | | | | (licensing, lawyers, product development, |
| 2. Does not require big cash outlays or major | | | | manufacturing etc). |
| investments in equipment. In other words, it does | | | | While there are excellent opportunities in each of |
| not tie up your capital. While investment is always | | | | these areas of business, I would argue that the |
| required, it is no longer necessary to drop large | | | | only one that meets the characteristics of an ideal |
| quantities of cash to start a successful business. | | | | business is a home based business with a low |
| 3. Can be started in your spare time. Again, it boils | | | | barrier of entry (fancy way of saying it costs less |
| down to risk. If you can start a business without | | | | to get started). |
| having to risk your ability to put food on the table | | | | Don't get me wrong. A lot of people fail in home |
| and pay bills, it is a much better way to go. Once | | | | businesses regardless of how much investment is |
| its bringing home the bacon at a level you are | | | | required to get started, but all other things being |
| happy with, you can keep your current job or | | | | equal, I would rather the business I start require |
| quit it all together. | | | | less up front capitol. |
| 4. Gives you free time. In other words, it doesn't | | | | One of the reasons people fail in a home business |
| require your labor and attention 12, 16 or 18 hours | | | | is because the factors to look for in an ideal |
| a day. Yes, work is important, but too often it | | | | home business aren't always intuitive and there |
| doesn't allow us the time to pursue the things we | | | | are some businesses out there that make your |
| are really passionate about. | | | | chances of achieving success a really long shot. |
| 5. Can become residual. Every business takes | | | | This is outside the scope of this article/post, but if |
| work up front, but the ideal business is one that | | | | you are interested you can check out the link in |
| you can walk away from and it continues to pay | | | | my resource box where I have a specific |
| you. | | | | checklist of components to look for. |
| 6. Has No employees. This is usually one of the | | | | Good luck and hope this helps. |