Business Opportunity

Prospective Business Owners Should Read This Page Carefully
(Financial Health Warning-it could make, or save, you a fortune!)
This page gives a comparison of the traditional business model to franchising and network marketing.

For anyone starting new in business, who is looking for a low risk model, I recommend network marketing for the reasons given below.

At the bottom of the article is a link to a video about the UK-based network marketing opportunity in which I am involved.

If you can’t be bothered to read the article, then go straight to the link below:

What’s It All About? video

Choose a Business Opportunity That’s Right For You

Introduction

By reading this article, you will understand more about the risks attached to most small business opportunities. You will see that there are other small business opportunity options that can help to eliminate some, if not all, of the risks. It will help you to compare the business opportunities you find and choose a new business opportunity that is right for you. Above all, it will help you to understand that it is possible to start a lucrative, virtually risk-free home business.

Why small business failure is more likely than success

There are significant pitfalls and difficulties in starting a traditional small business. How do I know this?

Well statistics indicate that most new small businesses do not survive beyond the first two years. Also, I was in corporate banking for 25 years and dealt with the financial and emotional fall-out every single day of struggling and failing small businesses. As well as a few spectacular successes, I witnessed at first hand the misery and heartache that a struggling small business can cause.

I then spent 5 years in business consulting and 18 months starting and running a manufacturing business with rent and rates of £20k per quarter to find and 25 employees. Eventually, after practically working myself into the ground, I sold out to a competitor.

Exploring the problems of running a traditional small business

Even with all my experience and expertise in business, I didn’t find running a traditional small business easy and here are a few of the reasons why:

If your small business needs premises, you will need to pay financing costs and/or rent and rates, maintain them and insure them. Often you will spend money on kitting the premises out, health and safety issues and you are forced to commute to them daily. They may be too big or they may constrain your business and it is often difficult and expensive to move. So ideally you want a small business without premises.

If you need to employ staff, you face the expense of recruiting them, training them, kitting them out with the tools of the trade, managing them, paying them and dealing with all the staff problems such as late attendance, sickness, constant expectations of higher wages (whether deserved or not), theft, dealing with poor performance, employment legislation and redundancy costs. You definitely want to avoid employing staff – the maxim ‘hire slow and fire fast’ is true!

If you have a physical product you may have the costs of product design, patents, manufacturing costs, supplier problems, quality issues, and stocking costs such as insurance, storage and despatch. Making and/or keeping a product in stock should be avoided if at all possible.

Once you’ve got your product or service, you then need to find a way of telling the world all about it through advertising, word of mouth and all the other marketing methods and you will usually need a fairly hefty slice of your capital to finance this and, more importantly, know what you’re doing if you don’t want to waste a large slice of your budget. So the problem becomes how to let the world cost-effectively know about your wonderful small business when your competitors are trying to do the same to the harassed, debt-ridden consumer.

To make all of the above work, you will need to develop systems and processes and some pretty good management skills in order to ensure that cash is generated at the right time to pay all the bills, and these skills are not acquired overnight. Not surprisingly, the biggest cause of business failure is poor management. So ideally we are looking for a very simple small business model that is easy to understand and duplicate for a person of average intelligence and abilities.

Then you have the problem of financing all of the above. This can often be exacerbated by the fact that your customers require credit terms and are reluctant to pay you. The Bank demands that you guarantee your loans with them so that you personally take the risk whilst they charge you a fee for the pleasure. On top of all these issues, you have the Customs & Revenue breathing down your neck as their unpaid collector of PAYE, VAT, tax and national insurance. You will quickly realise that you never ever want be at the mercy of Customs & Revenue, your customers or the bank manager who will ‘offer you an umbrella when the sun is shining but will want it back when it starts to rain’.

With all the costs of running a small business, even if you successfully negotiate the myriad of problems you will encounter, you cannot control what is happening in the world or the economy. The threat of competitors doing it faster, cheaper and better than you may ever aspire to (and, with the power of the internet, that is now a global threat, rather than a local one, for many businesses!) Quite apart from Gordon Brown mismanaging our economy and plunging us all into recession and threatening the very survival of your business. For these reasons, you definitely do not want a fixed cost base and you want to be quick and fleet of foot. But, if you have the entire infrastructure described above, you will effectively have a large mill-stone around your neck – you can’t easily downsize premises, staff, stock etc when all about you others are doing the same.

Have I put you off the traditional small business model yet?

Before, I miraculously explain how all these pitfalls and difficulties may largely be avoided, let me digress for a second and compare the traditional small business model above with a franchise business.

Franchising is a less risky option

Since the 1980s, franchising has been an attractive format for starting a business – that is, until recently.

‘Franchising’ is where a successful business owner (the franchisor) systemises his business from top to bottom and then teaches other small business owners (franchisees) to duplicate his business in other locations in return for a franchise fee and a cut of the sales of the franchisee.

Whilst it does not eliminate the headaches of running a traditional small business, franchising definitely provides a lower risk route into starting a small business. By buying a successful franchise format and by following the system to the letter, you have a much higher chance of succeeding.

In limiting your risk, however, you must choose your franchise opportunity carefully.

The costs of starting the franchise business can be high and your upside is limited by the franchisor creaming his fees off the top.

Creativity at franchisee level is not encouraged or rewarded as you are expected to follow the franchise system without deviation.
Why I recommend the network marketing home business model

I now want to compare the business models above with a network marketing home business opportunity currently available. Ideally you want your perfect business opportunity to have:

Low cost of entry – do you really want to risk a lot of your own capital only to find that your new business is not for you after all? A small investment buys you your initial stock, free training and website and may even be refunded if you find early success through bonuses.

No premises as you work from home – no more commuting on congested roads in the rush hour!

No employees other than yourself – you truly live or die from your own hard work and efforts – no-one else to blame if you do not succeed.

Consumable products and/or services that everybody uses every day, that are not a discretionary spend i.e. your customer has to use them every day, and your work from home small business can supply them at a lower cost than your much bigger competitors.

A British business backed by a PLC i.e. a strong, debt free and fast growing company that is well recommended in the press and on the internet.

A company whose business is recession proof – in fact a business where recession is good because more people are looking to save money and looking for a good, low-risk business opportunity to earn extra money.

A small business where high-quality training is free and you are supported by other successful people in the business because, if you succeed, they succeed.

A small business where you receive residual income i.e. you make the sale once and get paid for it monthly for as long as the customer continues to use the services. With so many pension schemes in tatters, this is a massive benefit for many people.

A business whose services are recommended by independent magazines such as WHICH? as the best available, based on criteria such as customer service and value for money.

A business that has weathered the initial start-up and early growth stages and is now on the point of even more rapid expansion with proven services and a high quality customer service and distribution system.

Delivering the service and collecting the money from the customer are largely handled by Head Office leaving you free to develop your work from home business.

A work from home business that has huge leverage i.e. that given enough time will expand exponentially to create a big business as you show others how to succeed and they show others in turn, while you receive a small percentage of all their efforts including your own. (It is better to receive 1% of 100 peoples efforts than 100% of your own).

A work from home small business that can be run part time or full time. This allows you to initially support yourself through your normal day-time job whilst building the business part time until it can support you full-time.

A business that is a saleable, willable asset

A business that will reduce your business, household and home office costs, just by being a customer.

A simple home business opportunity where, to succeed, your attitude is more important than your skill and you have the real possibility of generating a substantial residual income.

While all this may seem too good to be true, amazingly I know of at least one home business opportunity that meets all these criteria. I even know of easily teachable but cutting edge methods for promoting their home business opportunity that will get customers flocking to you, rather than you facing the unpalatable option of chasing them.

Of course, there are other network marketing home business opportunities that meet some, but not all, the above criteria.

Conclusion

So let us recap.

I have shown you that the network marketing home business opportunity model eliminates most of the pitfalls and risks inherent in a traditional small business. I have compared a network marketing business to a franchise business and also to a traditional small business and outlined how most of the risks and pitfalls may be removed.

You should be under no illusion by now that starting a traditional small business is no easy undertaking and there are other, less risky options available to you for fulfilling your dream of owning your own money-making machine i.e. the perfect home business.

Mark says:

Going into business for yourself is a big decision (perhaps the biggest decision you will ever make), so take your time to make sure that it is the right decision for you and you choose your small business opportunity carefully.

I encourage you to take a close look at the network marketing business model above and contact me on 00441212861316 for more information or you may watch the ‘What’s It All About’?’ DVD for more information about the attractive UK-based network marketing home business opportunity I describe.