Home-Based Business Opportunity Evaluator

The Five Distinct Characteristics of Pervasive Industries

1. Affordability - Can every household that wants the product afford it? Or is it out of the reach of most on price alone?

2. Legs - Does this product have the ability to "walk off the shelf" without promotion once a critical mass of people own it? Or does it require continual stimulation through promotion and incentives?

3. Continual Consumption - Will this product encourage continual consumption and purchase? Or, is it a one-time or infrequent purchase?

4. Universal Appeal - Is this a product that a mass market of consumers who learn about it will want it?

5. Low Consumption Time - Does the busy consumer have time to enjoy this product? Will it save the consumer time?

If you were able to meet all of these criteria, you've discovered a product that has the potential to become ubiquitous and appealing to the mass market of consumers.

Let's move on to the next evaluation criteria - the company and management.

Evaluating the company and the management team is essential. Many companies have failed even though they had a great product. One can often point to the company and management team as one reason.

Financial Fitness - Is the company profitable? Has it paid off its investors? Can it pay its employees, suppliers, and parters on time? Is it taking on more debt to finance operations or expansion?

Operational Efficiency - How is the customer service and support? Are they responsive? Is there quick turn for the products? Does the company have short lead times for shipments or does it take a long time to receive the product?

Company Management - What kind of experience does the management team have? Do they have a proven track record or is it their first time running this kind of business? Have they been involved in any scandals (i.e, corporate, personal) or do they have a clean record?

These are just a few areas to investigate when evaluating the health of the company and the management team. After all, you want to make sure you're joining an business venture that is more likely to beat the odds and survive.

Are you joining a mature industry?
Is it a saturated market? Or, are you entering the early stages of an emerging trend?
What's behind the trend? Is it just a passing fad?

Hint: Some examples of industry trends that make sense right now include the "wellness" and Baby Boomers. Following these trends as an example will reveal where the money is moving in the coming decades.

If you really want to read more about these trends, I recommend reading the following:

The New Wellness Revolution: How to Make a Fortune in the Next Trillion Dollar Industry

Turning Silver into Gold: How to Profit in the New Boomer Marketplace

This section is part of my own personal criteria. I believe businesses should also be socially aware and give back to the community.

I am much more enthusiastic about a particular opportunity if it aligns to my own personal beliefs. In my books, a company that offers a home-based business opportunity and makes the world a better place gets high marks.

Examples of giving back include:

1. The company donate a portion of their proceeeds to a particular cause (fight poverty, deforestation, etc.)

2. The company purchase supplies and ingredients at a premium to help preserve the environment.

3. The company has established partnerships with non-profit organizations and community leaders.

Note: A company that is socially aware also has a better chance of succeeding because they are connected to and have the support of the community.

If you're considering a specific home-based business opportunity, you should spend a significant amount of time understanding the compensation model.

Some questions to consider include:

• How much is the pay out?


• What is my earning potential? Is there a cap at a certain level?


• How easy is it to receive payments once I start working this home-based business?


• Will this allow me to develop a passive, residual income or will I have to keep working this business to earn income?


• How many people are successfully earning income (many versus few)?

Beyond these examples, I would encourage you to compare the compensation plans. If you study a few as I have, you'll begin to see that not all compensation plans are constructed the same way. Some plans are constructed with high minimum requirements (expenses) and low payouts (income) initially. Others have generous payouts and low monthly expenses. Study several plans carefully so you can compare whether or not your home-based business will provide the best reward you for your effort.

If the home-based business opportunity is network marketing or multi-level marketing (MLM), then having a great sponsor is VERY important.

Why?

In network marketing / MLM, how your sponsor treats you can actually increase your chances of succeeding. For instance, there are some who just recruit people to join their networks and never provide training / support. Others "go to work" for the people they sponsor by providing training, support, encouragement, etc.

Hint: If you're joining an MLM or network marketing opportunity, I suggest you INTERVIEW your sponsor and ask for references even if that person is your close friend or family member. After all, this is a business and you get to choose who you want to work with.

If you're doing some kind of Internet marketing or affiliate marketing business, then you'll want to find a coach or mentor. In other words, get to know someone who is already successful doing what you want to do (learn from the best).

Evaluating a home-based business opportunity is considered "due diligence". Do not rush your decision and jump at the first opportunity presented to you. Instead, take your time, be selective, and apply these key criteria.

If you have not been exposed to home-based business opportunities, you can find numerous companies through the Direct Selling Association. However, this is just one of many resources available to help you find the right opportunity for you. You can also check out JeanCheng.com