In a down economy comes a very bright spot that doesn’t seem phased by the constant barrage of negativity regarding many American’s financial situation: the home-based business. The home-based business has been around for longer than I’ve been alive as well as many of you reading this article. However, thanks to some significant events, the concept of home-based businesses has never been stronger. Over my career, I’ve watched this trend ebb and flow, but now I’m 100% convinced that home-based businesses (HBBs) are one of a handful of movements that are going to help our economy recover its robust and aggressive growth.
1. Frugal is in. It doesn’t matter where you look, advertisements are dripping with implications of saving money or spending less on what you already buy. That’s not particularly innovative or original. What is significant, however, is that brands that have rarely (if ever) discounted their products are turnings towards this tactic. Even Porsche is running specials with 0% financing! Entrepreneur Magazine even published a list of 50 businesses you can start on less than $1500.
2. Unemployment is high. When unemployment rises, people start opening their minds to other income-earning options. HBBs benefit because there are low startup costs and potential for some significant income. While you may not be making Madison-avenue money, you have to count the fact that your HBB doesn’t require a commute or any of the expenses associated with a full time job in corporate America–like eating out, transportation, etc. You don’t have to gross nearly as much through a home-based business as you do a full time job to achieve the same lifestyle.
3. Family is in. Let’s face it. People are tired of missing birthday parties, little league games, and school plays so that they can stay late at the office. Some of my friends–high powered attorneys and highly successful sales representatives–are looking at their lives and telling me "there has to be a better way." I’ll be the first to admit: given the choice between leading the closing team on a big business deal or watching my son bat in his little league game, I’ll chose the game 10 out of 10 times. I submit that I am not unique in my opinion, either. More and more professionals are choosing to stay home and work.
There are two kind of HBBs: those that you start yourself and those that are loosely based on a franchise-type model. The first could be anything from your own CPA or consulting firm, tree removal, painting, or who knows what. The second allows you to plug into a system and generate business using a proven or "turnkey" system. If you choose to go into business with this second type of HBB, I submit that there are five key essentials that you should look for:
1. Corporate Management. If the management team has a proven track record of success, integrity, and good business practice, your chances of success are much better.
2. Sales Leadership. The reality is that almost all businesses come down to sales, like it or not. You may not be doing the selling yourself, but your business will undoubtedly be affected in one way or another by the sales leadership. Find people that you could do business with based on a handshake.
3. Timing and trends. Your business should be based on trends that are growing. Nobody could convince me that selling 8-track tapes is a good business right now. There are several solid trends happening right now, even in this economy. Nutritional supplements, housecleaning, and home-based accountants, and several others.
4. Product. Your product must fit into one of the expanding trends. Think of surfing. It’s much easier to ride a wave if you’re out in front of it than if you’re trying to catch up to it.
5. Compensation. At the end of the day, no home-based business is worth the time and effort you will put into it if you are not compensated properly. Many HBBs rely on a contract or per-hour payment structure. The best kinds of compensation works on a residual basis. This can come in subscription form or with club-based consumption models. (Think BMG music or credit reporting programs.)
These key essentials will help you navigate the crowded space of home-based business opportunities. Find the one that works for you and cash in on one of the hottest trends in the US right now.
Strategist, coach, and trend watcher