The Home Based Business Phenomena: Is It Right for You?

If you’re one of the many people looking to find a business to work from home then you should consider if it’s right for you. No doubt if you are looking into this type of revenue generation, then you’re probably tired of working long hours for little pay, building someone else’s dreams. Have you ever heard that whoever owns the business owns the dream? Well I believe that’s true and if you spend most of your time working to build someone else’s dreams then I hope you understand that you don’t have a shot in the dark of making it big financially in this country! It will never happen! Most people are so busy making a living that they forget to live a life and before they know it they’re older, their kids are grown and they don’t have much to show for the “40/40″ plan, working 40 hours a week for forty years of their lives. We live in the richest country in the world, so why do so many people scrape by? If you want to be successful in life, find out where 98% of the people are going and go the other way. Almost all successful people have built assets rather than work for a paycheck. They’ve owned their own businesses and built pipelines. So the question isn’t whether a home based business is right for you, but rather can you build a successful home based business. The answer is an undoubted YES YOU CAN. But how, you may ask? First you need to decide what kind of business you’d like to operate. With so many different businesses to choose from, how do you know what’s right for you? To answer this question, you must see the difference between a traditional “brick and mortar” type small business, a franchise, and a non-traditional, e-commerce type business usually referred to as MLM (multi-level marketing or Network Marketing).

First off, with traditional small businesses, there are four factors to consider: time… money… knowledge… risk.

Time: To show a profit, you’d have to be open for business for long hours every day, including weekends. Usually, a 70-90 hour work week is very realistic in this type of business model. As the owner, you’d have to be there that long, or at least hire a manager that you could trust to run most of your day to day operations and pay that person enough to stay reliable.

Money: As an owner, your overhead in this business model is fairly substantial. You have leased space for your business, insurance, paid electric/utilities, heat and water. Then you have inventory and computer and software to manage it. Usually a cash register, and you must register with a bank as a merchant to process Visa, MC, Amex, and Discover Card payments. Not to mention any other equipment needed to maintain the business.

Knowledge: How to run a small business is not taught in college. If a person does not have a relative under whose tutelage he/she can learn, they must be self-taught… in the school of Hard Knocks. Most small business beginners are shocked to find that filling out paperwork takes the equivalent of one day per week. If they don’t know basic bookkeeping, they hire an Accountant. If they need advice on business structure, whether and how to use a Corporation, a Limited Partnership, or a Limited Liability Company (LLC), they hire an attorney.

In either case, they exchange money which they need for knowledge which they also need. This is a wise trade, since a small mistake made early can compound to a big problem later, but it is costly. Not to mention the sole proprietor cannot approach the competitor down the street for guidance on how best to organize his/her store. So like a person entering a dark room, they must feel their way carefully or they will trip over what they can’t see. Even with care, ignorance is not bliss and can cost the owner dearly… maybe cost the enterprise to fail. Take a look at this article ( http://www.usatoday.com/story/money/business/2013/02/01/retailers-close-stores-24-7/1873745/ ).

Risk: The new businessman has “tied up” in the venture several thousands of dollars which they cannot afford to lose. Also, hundreds or even thousands of hours of their lives invested as well… which in time can never be recaptured. Look at what happened to Hostess, maker of Twinkies and Wonder Bread.

As you can see, the traditional small business venture can run upwards of tens of thousands of dollars with more “work” involved than having a job. You simply bought yourself a job with the business.

Franchising, on the other hand, is that you plug into an already proven system. People think you are “buying a franchise”, but actually you invest your assets in a system to utilize the brand name operating system, and ongoing support. Think of one of the largest franchises of our time, McDonald’s. People who buy a McDonald’s franchise buy into the system already in place of producing Big Mac’s and Filet o Fish without having to “reinvent the wheel”. All you have to do is follow the “system” and your franchise will be successful, so they say. But the desire to “be my own boss” is not fully satisfied by a franchise. Franchisees cannot think of themselves as an independent owner. If they do they will be tempted to try to change the system. Does Mickey D’s sell hot dogs at all? Of course not! The home office does not permit anyone to “tinker” with their formula. The franchisee owns the assets of their own franchise, but is licensed only to run someone else’s business system. The desire to become a franchisee is grounded on belief that they can be more successful using someone else’s brand, and operating according to their methods, than they would be if they opened up their own independent business and competed against them. The problems with most franchises like McDonald’s, is that: it costs substantially more than a small business, there are royalty fees (usually 5-10% gross profit), loss of personal control… need to quit your full time job and be “locked in” to suppliers chosen by the franchisor, the inability to will your business to your family, a one-sided contract drafted by franchisor that may not fully protect your territory and interests. However, a franchise allows for: opening more quickly, developing a profitable customer base faster, has less risk, national advertising presence, built-in name recognition, strong support system that can be called upon for advice, readily identifiable trade name and goodwill associated with it, centralized, and collective buying power.

Now that you understand the differences between the two, what we need is a home based business that can adapt the best of both worlds: a way to generate full-time income with part-time work, a system that produces residual income that keeps coming in although one’s advancing age eventually prevents putting in much, if any, time.

More and more companies are entering forms of innovative cooperation with outside marketers. Reducing their own in house personnel has prompted them to enter strategic business alliances or joint ventures in which two or more business entities help each other. Since the 80′s, three powerful trends have converged.

First, threatened by corporate layoffs, highly capable men and women are looking for ways to diversify their income. Quite a few have asked themselves, “why go back to a corporation, even if I can find one to hire me, and risk being cut by the same layoff axe in a couple of years? Why not become an Independent Contractor?”

Second, not everyone laid off was “dead wood”. When companies cut their ranks by tens of thousands, they also cut thousands who were productive. They need to hang on to the productivity of the people they did not keep. So they started scrambling to find Independent Contractors to reach their market

Third, since the early 90′s, the introduction of the personal computer and soon after, the internet have allowed small, part-time businesses with few or no employees to compete on a level playing field with anyone in the world. Some of the smartest businessmen in the world have found a unique way to harness these trends to their advantage.

This is where MLM and e-commerce come in. Successful business models that harness the power of the internet and e-commerce along with the concept of independent contractors has made MLM companies a major power house in business today. Companies like Avon, Mary Kay, Herbalife, Amway, Melaleuca, Primerica, Pampered Chef, Ambit Energy, and many others have all realized the top 20 reasons for non-traditional business.

1) Low investment- usually less than $500 to start, depending on the Home Based Business opportunity..

2) No Boss-the independent contractor determines how much money to make and how hard they want to work.

3) Ability to work from home- daily commute consists of walking to your coffee pot on your kitchen counter. (That’s why it’s called Home Based Business!)

4) Fewer, more flexible hours- people are just too busy now a days!

5) Time-compounding through duplication- what you do and teach others to do the same adds to your business exponentially. Would you rather have 100% of your own efforts or 1% of 100 people’s efforts?

6) Minimal legal liability- no person in a “downline” can create vicarious liability for the sponsor.

7) No special licenses or training to join- unlike a realtor or insurance agent.

8) No discrimination-8) No discrimination-a Network Marketing type of Home Based Business rewards a person for movement of product and sponsoring others to do the same, regardless of sex, race, creed, or religion.

9) Tax Benefits- ability to claim home office deductions, utilities, gas and mileage, and business conferences, even while on vacation as deductions.

10) No employees- one works with, but not for the parent company.

11) No risk- startup costs are trivial compared to traditional small businesses and franchises.

12) No accounts receivable and collection headache- “cash and carry” type business.

13) Inexpensive, usually free training- upline mentor has vested interest in helping downline grow so the mentor will provide any and all training to help their downline. Like a good parent guiding their child teaching them what and what not to do.

14) Early Income-possibility to recoup initial investment in first month in business.

15) Unlimited income potential- Network Marketing has no floor. You could make nothing at all. It is because of no floor that it has no ceiling either. The sky’s the limit!

16) Inelastic Demand- a good Network Marketing company offers products or services that are top-quality, which people want, need and can afford, and have to buy again. Repeat business.

17) No regulatory Problems- the Parent Company takes care of all of the regulators and taxing authorities so the individual marketer is freed up to be creative.

18) Insulated against disaster- no single location; rather, it connects the country and the world with small individual participant-outlets.

19) Time flexibility of training/support system-time cost super small compared to medical school, business school, or even law school. You are in business for yourself but never by yourself.

20) Willable to one’s children- Network Marketing business can be transferred to one’s heirs usually estate-tax free. It’s the transfer of cash flow not assets that allows your heirs to keep the wealth.

Now that you see the many benefits of Network Marketing compared to traditional business, it is clear that this concept is by far the simplest and fastest form of generating extra income, regardless of what your mother-in-law, or brother-in-law think they know. So, again the question is, is this right for you? Only you can answer that, however, if it is right for you, how do you get exposure for your new MLM business? Very simply put, you need powerful training at little or no cost that will flood your inbox with potential customers and business partners in the easiest way possible. For a step-by step guide on developing this plan and maximizing your income from your MLM opportunity,

click here to access a free training series.

. “Small opportunities are often the beginning of great enterprises.” – Demosthenes

Choosing the Tools for Social Media for Small Business

The initial part of this series explored the need for small businesses to use social media and what were some of the critical steps in the process. Questions were raised to assist the small business owner to focus their efforts in the best way possible to achieve the desired results based upon the overall objectives and goals of the marketing plan. It gave a few tips on how to specifically identify the target audience and where they could be found on social media.

It is possible to compare the selection of the tools for social media to how a farmer selects the tools. First he/she surveys the land to determine the best type of crop to plant. This is similar to the owner reviewing the business website. The website for the small business is very much like the land for the farmer. It must be easy to use, provide content, contains various ways for people to interact with business and other ways to link with the business. As the farmer begins to make a choice of crop or crops to plant, he/she identifies who will be buying the crops. For the owner, it is the identification of the target audience. The farmer then makes the selection of the crop or crops that will produce the greatest results for them and develops a plan or process that will be used to plant the crops. This includes the review of the tools the farmer has on hand and the tools he/she needs to purchase or lease to complete the job of planting. Thus the farmer reviews each of their tools to ensure they are in good condition and able to perform effectively the tasks that need to be accomplished.

As the farmer makes the decisions about crops, the owner has to make the choice of the products or services he/she are going to provide to customers. The owner must review the website and began asking the questions that will assist in making the correct decisions on improvement.

For instance,

  1. How effective has the website been in assisting creating more sales?
  2. What kind of content are we providing that helps prospective customers?
  3. What is on the site that keeps the customer captured in order for them to spend more time looking at other products?
  4. Do I have links to other social media sites?
  5. Do I have a place for them to sign up for something free I am giving them?
  6. What other things can I offer to them to keep them on the site longer or have them buy a product or service?

The implements for the farmer are limited by the type of product they are going to produce and the overall size of the area to be planted. For the owner, the implements for social media are much more varied and are dependent on the target audience and the overall time that a small business owner plans to expand on social media. Presently, the major tools being used include: Facebook, Twitter; LinkedIn; You Tube; and Google+.

While the ones listed above are the most popular and used most often, they are not the only tools that are available for a small business. Some other tools being used are Tumblr, Slideshare, Instagram, Foursquare, Yelp, Pinterest, Gentlemint and Merchant Circle. Each one of these tools provides different formats and reaches different audiences.

So much as the farmer decides on the best tools for planting the crops, small business owners must do the same thing. As we review the popular tools, it is important for you as the small business owner to keep in mind your target audience; also, the amount of time you want to expend in using social media.

Social media tools discussed below have requirements that you create a profile. The profile will differ somewhat between social media platforms. It is important that the owner complete each of the profiles. This becomes the key for people to learn to know about the owner and the services or products that the company provides. Some of the requested information include: name, picture, professional headline, current title, web sites, public profile, summary, specialties, experience, education, interests, groups and associations, skills, personal information, contact settings, and companies.

The tool called Facebook is one of the most popular of the tools and is constantly growing. Businesses of all sizes are using this tool. Businesses create fan pages and business pages to promote their business. They ask people to like their pages in order to create greater number of followers. When they post updates people who have asked to get notifications and feeds will get them. This is a way for them to promote their brands, events, and coupons. Before selecting this as the place where you want your business listed as an owner must understand that just posting a page is not sufficient. It requires time to place status updates and respond to updates in a timely manner. It is about the relationship you are creating. Prior to select this tool the owner should check for the demographics of the website to ensure it fits the target audience.

LinkedIn as a tool is one of the most powerful tools for connecting with professionals. It is a tool that allows a person to develop a professional profile, upload a resume and join groups, create groups and follow individuals and companies. It is a good source to find information about a person or company. It is an excellent way to connect to other professionals across the nation and world as well as generate request for introductions to others. It allows a user to maintain a contact list of people they know and trust in business and can use to help connect with others. As with other tools, it must be used professionally and needs to have ongoing maintenance. Interactions are also important in establishing your creditability with this tool.

Twitter is another of the more popular tools in social media. It requires more attention than others because it is more like carrying on several conversations. It is used worldwide and can be considered a micro blogging site. It is a good tool to keep people posted as to what is occurring in your industry and information that as a business should be shared with others. It is a means of connecting with leaders in your industry and finding out their thoughts and how they influence people. As with the other tools, it requires a time commitment to maintain and respond to twits or updates from people.

YouTube is a video sharing social media site that is owned by Google. This site has grown considerably and is now the number two search engine. Business and individuals use this as a means of connecting with people using a visual mode. Studies show that people will watch a short video rather than read a large amount of data. It is also used as an educational platform and provides various types of self-development information. It is a great platform for delivering video-based testimonials, how to guides and commercials promoting products and/or services. As with other tools, a business can subscribe to other users and receive information when new posts are made. Before selecting this medium recognize that new videos will need to be developed and uploaded to be an effective tool.

Google+ (Google Plus) is a relative new tool as far as social media is concerned. It is used by both businesses and individuals. It provides a few more tools to use within the site than some of the others. Some of them include: Circles, Hangouts, Messenger, Instant Upload of Photos, Hashtags, Explore posts, Find People, Events, Find Local Businesses, Create Business Pages and more. The features make it easy for an individual to use. Since it is part of the Google product line one must have a Google Email account to use Google+. As a whole when viewed with the other Google product provides a great arsenal of tools to assist small business become more successful.

The tools we have briefly discussed are some of the most powerful being used presently, but they are only as good as the owner who selects to use them. The owner must remember that as a farmer selects the tools, the owner must do the same that are best for the designed marketing plan. The use of the tools themselves for owner is most important. Once the farmer prepares the field with the right tools and plants the seed, it is now important to water the seeds and plants until it is time to harvest. The owner has prepared his website, selected the social media tools based upon the marketing design, prepared each of the sites with the requested profiles and published each of the sites.

Now as the farmer waters the owner must use the status updates, tweets, messages, videos, slides. Responding to comments is also the way that a owner works with small business to establish the know, like and trust factors. This must be done with consistency overtime. As discussed in the previous article, social media is the developing of relationships with people and that does not happen quickly. Thus it is of utmost importance that a regular schedule be developed and implemented on a weekly basis.

The next segment of the series will review and look at social media sites that are up and coming and sites that are very powerful but have not gained in the overall popularity. As with the others, each has its strengths and weaknesses. Each therefore has different demographics and different targets. The business owner needs to have an understanding in order to select the best tool. A discussion of some of the sites that are better for international use will also be discussed. The subsequent articles will deal with tools to use to make using social media a little easier and ways to measure the return on investment of social media. The final part of the series will discuss other web-based tools that can assist small business become more effective in delivering services and products to customers.

As a owner, take the time to review each of the demographics for the sites. If you do not have a social media site, then select one that fits your demographics. Ask questions, raise concerns, review your goals, and talk to those who are using the sites, and then move forward with your plan.

6/5/20132 Lonnie G. Juarez, Jr. Ph.D. Visionary/CEO Social Business Media Connections and Social Business Media Managers

Why Make a Business Plan?

In many cases business plans are very important but so much of the time it’s a plan to try to convince someone else that you know what you are doing with your business like banks, investors, partners, etc. Now it’s true that a well written business plan can also be a major benefit to your success as well if done right. It can guide you and keep you on track and can be the vehicle to get you were you want to be especially with so many outside forces now days that bombard you. A plan can be extremely important to your success especially when you look at the statistics that says 51% of small businesses fail sometime during their first 5 years.

So why make a business plan? I want to show you a totally different kind of business plan. What if you made a business plan that focused only on what you want for your life? You have dreams about what you would like your lifestyle to be, right? Why not make a business plan that could give you those dreams? What would your business look like if it gave you exactly what you want in life. What kind of salary would your business need to give you? Why not build a business plan around that? Decide how much salary you would need to support your dreams and then build a business plan that would show exactly how your business could give you that. Wouldn’t it be better to have your business work for you instead of the other way around?

Did you ever stop and think what a unique position you’re in as a business owner? I don’t know of any other way you can have as much control over your success than owning a business. When you work for someone else, you are totally at their mercy as to what your future may be like. It doesn’t matter whether it is a private business you work for or a large corporation. Your future is in their hands. The only thing that might qualify other than owning a business would be to inherit or win a lot of money that would give you everything you want in life.

So, why make a business plan the normal way when you could first make one that could give you what you want in life? Have you ever thought about doing a plan like that? Would you know how? Would you have the time to do it?

Well if you don’t or not sure, let’s at least see what’s involved.

Here are the steps you would need to take.

First, you would need to know all your current business numbers. This will be the basis for the plan. You’re going to need to know:

1. What your current average monthly sales are
2. What your current average monthly material cost is
3. What your current average monthly labor cost is
4. What your current average monthly fixed expenses are
5. What your current average monthly variable expenses are
6. What your average number of transactions per customer per month are
7. What your average dollar sale per transaction is
8. What your average monthly profit is
9. What your average monthly profit margin is
10. And what % capacity your business is at right now

Second, decide what you want your salary to be

Third, determine how many years in the future you want to plan for

Fourth, you will need to know:

1. What % is your material cost of sales?
2. What % is your labor cost of sales?
3. And what % is your variable expense of sales?

Why do you need to know these percentages? As your sales increases or decreases, your material cost, labor cost, and variable expenses will track accordingly. They will track very close to the same % as your current business. As an example, let’s say your current sales is averaging $100,000 per month and your material cost is averaging $20,000 per month. That’s 20% of your sales ($20,000 รท $100,000 = 20%). So, what would your material cost be if your sales were averaging $200,000 per month? It would still be 20% but it would be 20% of $200,000 or $40,000. So with these percentages, you can project your material, labor and variable expenses. See how it works?

But your fixed expenses don’t do this. They remain the same no matter what sales does. That’s why it’s call fixed. These are expenses like rent, taxes, utilities, phone, salaries, insurance, etc. A lot of business owners never consider this. They just lump all their expenses together. But you could never make an accurate plan if you combine all your expenses together. If you project your sales higher and want to know what your expenses will be, you have to separate your fixed and variable.

So, thinking about this principle, let me ask you a question. If your sales grew 10% and nothing else changed, would your profit margin be higher, the same, or less? Profit margin is % of profit against sales

If you said the profit margin would be higher, then you are right. Why would your profit be higher? If you said because of the fixed expenses, you would be right. Your material cost, labor cost, and variable expenses would have gone up 10% but your fixed expenses would have remained the same. You brought in more revenue because of more sales and you spent 10 % more on material, labor, and variable expense to cover the extra sales, but you didn’t spend any more on your fixed expenses. So, less overall expenses, would give you higher profit margin. Make sense?

So, let’s see how we would make a business plan that would show exactly how your business could give you the salary you want.

First you would determine what you would like your salary to be. You’ve dreamed about having a nice income to support your dreams I’m sure. Let’s say right now you only make what your profit is giving you which might not be much. So let’s say the first year, next year, you would love to have a consistent monthly salary of $4,000 a month, every month. And every year you would like to be able to increase it so that after 10 years it would be at $10,000 per month. And let’s say you would like to grow your business 10% each year.

So, what would your business look like over the next 10 years to give you that?

Could you build a plan that would show exactly how your business could do that?

It would show what your sales, fixed expenses, material cost, labor cost, and variable expenses would need to be. It should also show you how many customers you would need and would show you what your profit and profit margins would be each year.

All it takes is your current business numbers as we listed earlier and you can make a business plan as many years out as you like.

Now, in addition, when you know the average number of transactions per customer and you know your average dollar sale per transaction, you can also project how many customers you would need over those 10 years as well. This would tell you everything about what your business would need to do to give you the salary you want.

So, wouldn’t it be nice to see what a plan like this would look like? Could you do it? It might not be as tough as you might think.

There is no doubt it would take some time and would require a lot of calculations, but when you understand these principles and know how to put it together, you could probably do it. What do you think? Have you ever thought about doing a plan like this? It’s actually kind of in reverse. You decide what you want and let your business give you that.

Now assuming you did do this and it looked reasonable to you, how would you go about making it happen? What approach would you use? This could be a little harder. Well let me show you something. It might be easier than you think.

Did you know there are 7 ways to increase profit in business? If we decided to grow our business, most likely the first thing we would think about would be to add more customers. Adding customers will increase sales and as we seen above can increase profit as well, but it might not be the most effective way to increase profit. Take a look at these and see which ones you think could work for you. Would it be to:

1. Add more customers?
2. Increase your transactions per customer?
3. Increase your average dollar sale per transaction?
4. Decrease your fixed expenses?
5. Decrease your variable expenses?
6. Decrease your material cost?
7. Or decrease your labor cost?

What’s more important, sales or profit? Profit is what generates your salary. You could actually make more profit with less sales. Less sales could actually be less work. The most important thing for a business is to make money. That’s profit. Now some might say, I don’t care so much about making a lot of money. I like the freedom of owning a business. Well that is probably true, but if you don’t watch your profit, you might lose that freedom.

It’s always amazed me how most businesses, even very large ones, talk about how much their sales are. You hear comments like, that’s a $10,000,000 company. But what’s a $10,000,000 company if it has no profit. Now I do admit that 2% net profit of $10,000,000 is a lot bigger than 2% of $1,000,000 but most likely the large one carries a lot more headaches too.

Maybe it would be much better to have focused on profit than sales. What if profit had been the focus instead of sales. What if this could have been the result?

$10,000,000 x 2% = $200,000 profit
$1,000,000 x 25% = $250,000 profit

So when using one or more of these 7 ways to increase profit, the first one (adding more customers) might be the one you want to focus on last. It’s probably more expensive

Now, if you had your plan completed and it showed what your business needed to do over the next 10 years to give you the salary and profit you wanted, the next thought would be how do I make it happen. Well the best way would be to take it one year at a time. Concentrate on next year first and then choose one or more of 2 through 7 to work on before trying to add customers.

As an example, let’s say your current average number of transactions per month per customer is 3.0. Which says on average each customer does business with you 3 times each month. You could calculate how much more profit you would get if you could increase it to 3.5. And I can tell you that would probably be enough to meet your plan. And if that did generate enough profit, all you would have to do is maintain everything else; sales, expenses, labor, average dollar sale, etc, and then just figure out how you could increase your transactions from 3.0 to 3.5. Maybe it could be with some type of promotion that would get customers to come in more often.

Once you chose which one or more of the 7 you want to use and calculate exactly how much impact they have on meeting your plan, you would now have a definite approach on how to make your plan work.

It seems simple. At that’s what it’s all about. It’s about how to make your plan work the easiest and smartest way you can eliminating all the guesswork or trial and error methods. Want to increase your profit? This is a good way to do it.

So, you see, once you decide which of the 7 ways you’re going to do, then the only thing left for you to do is figure out how to make the one or ones you have chosen work.

No doubt there would be a lot work to do to do a plan like this. You would need to figure out how to put it all together, do all the calculations, do a lot of what if’s, etc.. And I’m sure one of the biggest things would be, would you actually take the time to do something like this or even have the time to do it? You could pay someone to do it but that would probably cost you a lot. Plus if you did that, most likely it would require a lot of back and forth work to get it just like you wanted it which would be even more expensive. But even then, would you spend the money to do it?

There is a better way. If you would like to develop a nice plan like this for yourself and give yourself a good shot at making your life better, then find a planning software that does it all for you.

One place and probably the only place I’ve found is http://StrategicBusinessSolutionsLLC.com.