So, you want to start a home based business? According to the U. S. census, there are over 700,000 businesses in the United States with no employees, so you’re definitely not alone. The best part is that about 20,000 of those businesses had gross receipts of over $1,000,000! That is over a million dollars for a single person, working out of their home. Obviously not every person starting a business is going to make anywhere near that kind of money. You need to have several things to even have a prayer of getting a solid, profitable business going. The type of home based business you are looking for is one that can pay you a very handsome profit, year after year, and allow you to take enough time off to enjoy the fruits of your labor.
So, how do you get such a business started? First, you need a plan, a real, solid business plan. The plan should encompass everything pertaining to your business;
A business plan is essential for a number of reasons. First, it causes you to think through your business carefully. You can make sure you have covered all your bases and that no details have been missed. Next, it will be a necessity in the event you need to seek financing. Investors will want to see a well thought out business plan.
The first decision you need to make when starting your home based business is: what will you be selling? There are many options. Do you have much needed expertise in a certain industry? If so, you could start a lucrative consulting business. Consultants in certain industries make $100 - $200/hr. Some are paid as a percentage of the money they save the client. That can be extremely profitable. I’ve personally seen consultants save businesses over a million dollars a month! If you had a fee structure such that you only received 5% of the savings, you would get a $600,000 annual paycheck! That is an abnormal, but by no means an isolated example.
You could start an online store. It is much easier to begin an online store than a bricks n’ mortar operation, however you still have a lot of work to do. You’ll need to, as with every business, evaluate your target market. Who are you selling to? What types of products will you be selling to your target market? You have distribution and fulfillment decisions to make as well. Will you be using a drop shipper, or will you be stocking products yourself?
Most small internet businesses, except for those that are selling products they produce or source locally, use drop shippers. The advantage to a drop shipper is you never touch or stock the products you sell. They are shipped directly from the fulfillment center to your customer. The advantage is obvious. Your inventory carrying costs are reduced or eliminated completely. You need not have a staff to package and ship your inventory either. The disadvantage to using a drop shipper is that you usually pay a little bit more, 3% - 5% on average, than you would if you used a traditional wholesaler. Many traditional wholesalers have fulfillment departments specifically for e-commerce businesses. You’ll have no minimum orders, but possibly a small set up fee, usually less than $100.00. Beware of the many, many fake wholesalers on the Internet. A real wholesaler will typically be used by many online and bricks n’ mortar businesses. They will buy directly from the manufacturer or importer of the products. They will not charge you a membership fee or a larger fee to get better pricing. They make their money from selling you products, not from marketing you a price list.
You could sell information products. There are four ways to obtain information products for your business:
Information products are delivered as hard copies of books or other recorded media such as tapes or CD ROMs, or they are downloaded directly to your customer’s computer. The download method works very well because you are paid instantly when the product is downloaded if you are selling your own products. If you are selling as an affiliate, you’ll typically be paid bi-weekly or monthly. In either case, you need carry no inventory. You can sell the same product over and over again, creating a nice revenue stream. Many successful home based businesses use this approach.
Another very popular home based business is selling other businesses products as an affiliate. This approach has many advantages. You carry no inventory. You are not selling the products yourself, but being paid a commission for sales to customers referred by you. You don’t have to deal with many of the headaches and expenses of traditional businesses; returns, customer service and inventory. There are many affiliates making substantial profits every month using affiliate marketing. The disadvantage is that due to low barriers to entry and low risk, there is substantial competition. You have to differentiate your business to be successful.
There are many ways you can join the exciting and profitable world of home based business. You’ll free yourself from the problems of the traditional job market and enjoy a whole new life. Make the leap!
Steve writes about a multitude of business and finance topics. He has been a principal in several businesses both online and bricks n’ mortar, including one that grossed over $1.5 million a year. See The Home Based Business Opportunities Guide for great home business opportunities and valuable information about growing your home based business.