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Why Do Businesses Fail?

It is a sad fact that every day in the UK, businesses fail.

In fact to be more accurate, in a normal year on average around 50 companies go into liquidation on every business day of the year. During a recession such as in 1992 that figure went up to over 90. And that’s just the companies. It doesn’t include the sole traders and partnerships that go under as well.

So why do businesses fail?

Business failures are a bit like fires. Something smouldering may be difficult to see but can be relatively easy to put out with little damage or risk if caught early. Once a fire is really going, it is much easier to see, but is usually much more difficult and dangerous to extinguish as it consumes resources, and crucially, cash.

Cash is king as the old saying has it. And no one believes this more deeply than turnaround executives. Because fundamentally businesses fail when they run out of cash.

And while there are well established ways of tackling businesses that are starting to burn their cash, one of the major problems for turnaround professionals is that we are often called in too late.

You would call the fire brigade if you saw a burning house. If you see a business that is fire fighting, it is time to call in the business fire brigade, a company doctor.

What causes business failure?

There are really four types of business failure.

Firstly there is the start up that never does. It’s a well known statistic that most businesses cease trading within their first three years. In many ways this is an inevitable result of the willingness of entrepreneurs to take the risk of starting up and testing the market.

Given how difficult it can be to raise money in the UK for a new venture, many such businesses have so few resources to start out with that a relatively small set back in the early years can be sufficient to wipe them out, where a larger business would pull through. Having got through these critical first three years however, business failures then fall into three main camps.

Catastrophic business failures where the business suddenly ‘falls off a cliff’ are the second type of failure. While often being high profile, these are actually quite rare and are often due to the impact of some traumatic event such as a major fraud, lost litigation or sudden change in the law.

The third type of failure, overtrading, by contrast is a relatively common cause of business failure in boom times as businesses grow faster than their cash resources can support.

But most failures are of the fourth type and follow what has come to be known as the business decline curve where a business that is underperforming, starts to become distressed and as the decline steepens, falls into crisis and eventual failure.

How do you spot the warning signs?

One particularly frightening thing about the decline curve is how as a business descends the slippery slope, problems start to compound.

An underperforming business makes lower levels of profit than its competitors. With less profits it can reinvest less into the business. Slowly, insidiously, it starts to slip behind and over time market reputation and share are lost, resulting eventually in the first losses being recorded.

As it has to fund losses, a business in distress starts to stretch and juggle its cash. The bank manager wants security and personal guarantees as the account starts to be constantly up against the overdraft limit, and the business starts to delay sending in management accounts; the business starts to stretch payments to suppliers and subcontractors or make round sum payments on account as a way of eking out the available cash. The staff know that the business has problems and morale and quality of work sinks.

By the time it is in a crisis the finance director has either jumped ship or has gone off on long term sick leave. It is on stop with its suppliers and the CCJs are starting to fly. So sub-contractors are stopping work and the business cannot get the materials needed to complete its contracts or products and so collect in cash from its customers.

And if it cannot get the cash in to pay the rent or the wages at the end of the month, suddenly it’s all over.

What causes normal business failure?

So how do businesses get themselves into these sorts of situations?

There seem to be five main contributing factors to most ‘normal’ business failures in varying degrees.

Firstly and usually most importantly, there are management problems. The autocratic managing director whose drive has been vital in the past, but is now driving the business into the ground while simultaneously driving away anyone who tries to disagree; the board dispute that has led to civil war; the lack of anyone who really understands what the numbers are telling them; the family company run in the interests of family members and not the business’s needs. Any and all of these sorts of issues can prevent the business recognising or dealing with the problems facing it.

Because secondly, any business needs to have an eye out for the strategy challenges that it will inevitably face, whether these are changes in the market and customers demands; technological changes that require reinvesting and moving on; or changes in the competition which require improved efficiencies to keep the cost base competitive.

The third area is a lack of financial control, where it is usual to find that cash has become tied up in old stock, debt or retentions; that lack of proper reporting means costs are actually out of control (is all that machinery we are paying hire charges for really still on site?), management do not have accurate costings so they do not really know how much margin each job is making, and there is weak control of variations and valuations so the eventual outcome is uncertain.

Fourthly there is a lack of operational control of both hard issues such as up to date machinery; and the soft issues of organisational structure and staff management.

Finally there are any ‘big project’ such as a new computer system, a problem acquisition, a huge new contract, or a premises move. Anything that adds extra disruption to the business, while taking away cash and management time can prove to be the straw that breaks the camel’s back.

So if you start to recognise any of these signs, seek professional advice from an accredited turnaround professional with experience in dealing with these types of situations.

Treat Your Business Like a Business

The first rule of being in business for yourself is to go to work every day as if it were a job. Whether you are new to being an entrepreneur or you have primarily or exclusively worked for someone else, this way of planning for your workday will help you transition into being a profitable business owner. The sooner you take your business seriously, the happier and more prosperous you will be in your venture.

The second rule is to get in the game and stay in the game. You must remain active over time in order to prosper and to develop yourself into a competent and seasoned professional.


Create a game plan so that you can lift your business off the ground as soon as possible. The details of this plan will depend entirely on your goals, your level of ambition, how much time you are able and willing to allocate to your business, and whether or not your network marketing income is going to be your primary or secondary source of revenue. This should be discussed openly with your sponsor from the beginning. It can become an on-going dialogue as you, your vision, and your business evolve.

Madeline is one of the top earners of a network marketing company. Madeline started her business fourteen years ago with the goal to get her products paid for. At the time, she had four small children and only worked a few hours per week. Her customer base grew gradually as she shared the products with people she knew. She never became aggressive in her sales attempts. For years she never ventured outside of her circle of friends and acquaintances, enrolling a few friends and helping them enroll a few people whom they knew.

What Madeline realizes now, but did not see then, is that her efforts were building to something far more significant than her initial goal. If she had it all to do again, she said she would have been grateful for those few hours per week she was able to devote to her enterprise, instead of always telling herself that she was not doing enough. She did not foresee herself achieving her current status with her company and influencing as many people as she has over the years.

If you want to make ten thousand dollars per month in one year, and you have only five hours per week, you will need to adjust either your goal or your activities. Ideally your sponsor will help you figure out how much time and effort is necessary for you to achieve your goals and what you can realistically expect from the time you can allocate to your business. Discussing your goals with your sponsor will help you steer through this initial start-up phase. With an understanding and appreciation of the fact that you will need to put time into your business before you see significant results, you will be better prepared to defer gratification as you give your business time to stabilize.


It is important that you start your names list shortly after you complete your application. This list is the basis for identifying people whom you might like to work with and who might be interested in your products. No names list, no business. Your names list is as important a tool for you as a hammer is to a carpenter.

Who will you contact and how will you find people? Some distributors prefer to do all of their marketing on-line, with leads, virtual ad campaigns, and social media. However, keep in mind that most people get introduced to this business by someone they already know, or someone they meet personally. Even if you meet someone in a chat room or from an Internet lead, you must focus on establishing a relationship with that person. You need to develop your ability to deepen your connections and build rapport with the people who are considering your business and your products. You must connect with people before either party decides to work with the other.

Since nobody you speak with must become your next associate or your next customer, you can relax. If you think that someone could be the next superstar in your organization, keep your expectations in check. The only person who has the potential of being a big contributor and strong leader on your team is someone who is willing to make building his business a priority and take this seriously. Discuss goals openly with all of your prospective business partners. Separate your needs from these conversations with people and you will exert less pressure and feel more at ease. You will also be better prepared to listen to what someone wants to achieve if you suspend what you want during the discussion. The mantra is: Make it about the other person. Serve more people if you want to sell more products and enroll more associates into your organization.


If you are unsure about network marketing, it will be difficult to encourage others to believe in what you are doing. If you have not experienced your company’s products, it is unlikely you will market them successfully. Educate yourself about your company and the industry so you can speak reliably about both. Become your own best customer and product user. You want to stand tall and firm in your secure knowledge of the value of what you are offering.

Your unshakable belief is what you relay when you speak with people. The stronger your belief, the more people you will influence. When your belief is strong no matter what anyone says, you will not get knocked to the ground and your journey will be much smoother. If you encounter “dream stealers”-people who want to talk you out of your new business-you remain steady and confident. This is posture and it comes with practice.

Gradually, the final and most important belief kicks in: belief in you. It cannot happen overnight, so try to stay grounded and focused as you build up this cornerstone of your business. You may have been blessed with high achievement and expertise in another field, perhaps the one you were involved in when you started your network marketing business. Even if you have already done well elsewhere in your life, it is your belief in your ability in this, your networking business, that is essential for you to build a thriving and sustaining organization Believing in yourself and feeling confident in your new venture may come in fits and starts, but come it will as long as you are continuously practicing and improving


Your funnel represents the people who are in various stages of reviewing material about your products and your business opportunity. Your business will grow as a result of your finding good, strong, motivated individuals for your group and loyal product users as customers. You will be solely responsible for this by keeping yourself in production mode and continuing to contact people as you develop your network. Just as a dentist needs teeth to repair, you need people to be looking at your products and your business. The more prospects in your funnel and the more skillful you become at helping them understand the benefits to them of your business and product line, the more likely you will develop a strong customer base and a thriving organization of active distributors.

Successful entrepreneurs develop simple, effective routines which they repeat day in and day out over a long enough period of time to eventually experience quantum returns. For example, Jacqueline is a realtor who was very busy when she started in network marketing. In the beginning, she built her networking business by looking for just a couple of strong team members to help launch her organization. She decided to build her business by doing two things every week:

1. She made calls every Wednesday morning from nine to eleven-thirty.
2. She attended one opportunity meeting with at least one guest every Thursday evening.

She did not experience immediate results, but because Jacqueline was persistent and consistent, after a couple months of this activity she brought two very strong members into her organization. Both immediately focused on building their organizations. In this same time period, Jacqueline also picked up two loyal customers. The return on both of these placements is potentially quite significant. The results did not develop overnight but they could pay Jacqueline back indefinitely.

Follow up is the key. As you fill your funnel, keep track of people who are not interested now but who might be more open-minded later when their circumstances change. Keep notes on these people so you can help them move forward when they are ready to take action. You will need some kind of system to remember all of the people you have spoken with and where you left off with each person. What material have you shared with this person? What were his concerns? When did you agree to contact him again? Whether it is an old metal box with file cards or a completely high-tech electronic contact manager, the only thing that matters is that you put your system to use consistently.


Learning how to effectively approach people to see if they might be interested in your business and products is among the most important skills you will acquire. In the early days of your business you will need to talk with many more people relative to the number who will actually want to buy your products or join your organization. This is an important time to keep your expectations in check. It is also the time that you are climbing up the learning curve, honing your expertise. Checking in with your sponsor, role-playing, and using all of the training tools that will be made available to you will make a world of difference. As you get some success under your belt, this aspect of network marketing can become a lot more fun and less daunting than in the beginning. I have found after considerable practice that I have been able to attract loyal customers and strong business partners with much greater ease with each passing year. Now, after many years in network marketing, it seems that I attract quality customers and new associates everywhere I go. This was definitely not my experience in the beginning.

If you or the person you are enrolling has concerns about approaching friends and family, take heed. The very nature of network marketing is word-of-mouth advertising. You should learn how to approach friends and family in an ethical and professional manner. Learning approaching methods that honor the relationships you have with people you know, love, with whom you work, and who you care about will be very good for business and ultimately good for the people who you approach. If you chose products that you believe can be of great benefit to those who use them, it should become apparent to you that it is your job to be the spokesperson for your company so that others can learn about them. Why would you want to deny the people you care most about the benefit of the products that you now distribute? Only fear and a lack of know-how could get in your way. Resolve both by learning the ropes. Your warm market-people you already know-are a gold mine for getting your business off the ground. And with the proper mind-set, you are offering your friends and family a gift by sharing with them the benefits of your products and, for some of them, your home-based business opportunity.

Here are some tips for successfully approaching someone about your business and products.

• Do not say anything about your products or about the opportunity until you know that the person you are speaking with has a need or want that you believe you can help him achieve.
• Think of yourself as a purveyor of information and a resource for solutions. Be a trustworthy advisor, always keeping the other person’s best interest in mind.
• Be disarming by telling someone that you do not know if she will be interested. By letting her off the hook, she can relax more and hopefully listen better.
• Create conversations with people. Communicate, do not lecture. Ask questions to engage people in the discussion. One of the most common mistakes made by someone whose communication skills are lacking is to ask a question and then neglect to give the other person time to think of his answer. Conversely, a good communicator asks questions and waits while the other person takes the time to consider the question. “John, you are nodding your head in agreement. What does this information about living a longer, healthier life mean to you?” Pause. Give John a moment to reflect.
• Once the dialogue begins I let people know that as a result of their listening to the information I have to share with them one of several things could happen: they might become interested in my products and in becoming a customer; they might be interested to learn how to do what I do, which is recommend the products to others for profit; they might be interested in neither at this time; or perhaps they would consider referring someone they know to me. Any of those outcomes is fine with me; I will help them see if there is anything of benefit for them in what I offer.
• When speaking with prospective associates or customers, you might wonder whether you should lead with the business or lead with the products. Instead, listen to what they need and lead with your heart. Listening to someone’s interests and concerns will guide you in knowing best how to serve her with your products and/or your business opportunity.

When approaching someone, here are two techniques to begin a conversation. I call this the “I Thought of You” method.

• I thought of you because… [Fill in something that this person wants or needs that you believe can be addressed by your products or business.]
a. I thought of you because you have recently talked about wanting to lose weight.
b. I thought of you because you have mentioned lately how tired you are at the end of the day.
c. I thought of you because you told me last week that you are unsure about the security of your job.
d. I thought of you because you told me you did not know how you would balance having a new baby with working.
e. I thought of you because as long as I have known you, you have been talking about wanting to be your own boss.
• I thought of you because… [Fill in something about this person that represents a skill or talent you see as a potential asset for your marketing organization.]
a. I thought of you because you are one of the most out-going people I know.
b. I thought of you because you seem driven like I am, and I like that about you.
c. I thought of you because I see what great leadership skills you have.
d. I thought of you because you are a walking billboard for healthy living and taking great care of yourself. (You can adjust this to reflect the products or services your business offers.)
e. I thought of you because you have excellent people skills.
f. I thought of you because you are one of the most goal-oriented people I know.
g. I thought of you because of your passion for serving others.

Speak the truth. Do not cheapen any of these conversation starters by being insincere. Even if you are using the most sophisticated on-line tools, ultimately people will join your organization because of you. The videos, websites, CD’s, DVD’s, and testimonials you share with your prospects are the tools. Building relationships based on authenticity, service, and trust is the craft.


Once you have begun the conversation with a prospective associate or customer, you will want her to do something to learn more. That could be any of the following:

• Sample some products.
• Watch a DVD.
• Visit a website.
• Read a newspaper.
• Attend an event.
• Attend a webinar.
• Meet with you
• Listen to a full presentation.

You will find that people will not always follow through on their promises to try products, review materials, or even show up for events. Succeeding in this business requires a lot of patience. I don’t stress when someone reschedules an appointment or does not do what she said she would do; nor should you. But once someone is engaged, I monitor her diligently, for it is my responsibility to help her move forward. My job is to help someone do something that is in her best interest. If things do not go as I had hoped, I must remind myself that some of the greatest connections I will ever make-in life and in business-may be the result of a slow start. You can begin with the end in mind, which is to help people see the personal and specific benefits of using your products and joining your organization. But do not let yourself be blinded by that vision. Create interest and reduce resistance. Taking things step by step increases the chances that you will stay connected to and be in harmony with people.

While your prospective associate or customer has materials to review, it is good to touch base, ask him if he has any questions, and say something genuinely encouraging that is personal to him. For example, for the man who recently joined my organization, I focused on the fact that he is a fitness trainer and is in incredible shape. I mentioned that I was excited to find out if he saw how he might incorporate the weight management products my company markets into his work with his fitness clients. Use word pictures to paint a mental image of how the person you are speaking with may benefit from what you have to offer. When I enrolled a public school teacher, I asked her if she was open to having an event to which we invite other teachers who, like her, wanted to earn more money. I also told her that I was excited to put her teaching skills to work since much of this business entails training others. Use your imagination to help people see how they can work within their communities and within their own circles of influence to help expand the network. You must help people visualize themselves being successful.

The sequence is fairly predictable, although variations will present themselves. For example, what begins as a discussion about the business might evolve into a conversation in which someone decides to be a customer. The opposite can happen as well. The key is to be flexible and to listen to what the other person wants and-just as importantly-what she says she is willing to do. If someone tells you that she would never, ever consider taking nutritional products-or whatever your product happens to be-that she doesn’t believe in them, and that she has no interest whatsoever to understand the benefits, you can try to convert her, but I do not recommend this. In a situation like this, there is probably too much resistance. A new associate who repeatedly tries to convert people in this way might actually quit the business because working against people who are very close-minded is incredibly unpleasant.


The most successful business leaders learn how to give an excellent presentation of their company’s products and business. The best network marketing companies provide their distributors with standard presentations in a number of formats, which highlight the company’s business and products. Top distributors may also share presentations that they themselves develop or modify. Whether you’re a new associate or you have been in the business for a while and now want to move to the next level, the smartest way to acquire and hone your presentation skills is to continually tune into presentations provided by your company and its top distributors. If possible, acquire a recording of one of these excellent presentations and have it transcribed. This will be an invaluable basis for your own presentation. It may take you a few months to become proficient at giving a top-notch presentation, and you will definitely have to practice quite a few times. But doing so will reward you for the rest of your networking career.

Working with a variety of personality types has taught me the importance of my being adaptive while building personal connections with prospective customers and associates. If you are super-high-energy or have an aggressive personality you may need to tone it down just a tad to make sure that you are not overwhelming the person you are speaking with. If you tend toward introversion and are very soft spoken or even shy, you should become more animated and perhaps more assertive when giving a presentation. In either case, learning how to move toward the middle is good practice for learning to be a more expressive, well-rounded person. Whatever you can do to enhance your ability to connect with another person will be good for your business and good for your own personal development. Top earners in network marketing continually practice their people skills, seeking to master the art of connecting with others. They also tend to be genuinely enthusiastic and excited about their products and business. This is something worth striving toward if you want to take your business to the next level.

As one who enrolls new associates on a consistent basis, I have studied and practiced numerous aspects of communication, persuasion, influence, listening, and selling. I realize that when I am sitting across from a prospective customer or associate I can make or break a conversation that could alter the course of this person’s life. Because it is my intention to bring on as many qualified new team members as possible, I have a few personal mandates that shape every presentation I give. It is the direct communication of these core values that I believe supports my ability to consistently bring new people into my organization. You too can practice these.

• People will encounter hurdles as they consider the business. You can address these hurdles one at a time and discuss them openly as you move along in the discussion. For instance, one hurdle that people frequently encounter is that this is a home-based business. You should mention that although we interact with other people regularly, there is typically no office outside of the home where we conduct business. Find out what the other person thinks about this. I have released many individuals who were 100% positive that they wanted a regular nine-to-five job and had no interest in learning about alternatives. Discuss the benefits of your products openly and ask the prospect if she would tell others about them if she knew what to say and how to say it. We train our new associates. Is the person you are sitting across from trainable? It takes about ten hours a week to launch a business like this. Is that feasible? You should identify the hurdles relevant to your opportunity and discuss them frankly.
• Think continuously that you are helping the person you are speaking with understand the value of your company’s products and business opportunity. Your job is to explain how the products work, how we make money, what the training entails, and what the lifestyle benefits are. When presenting, the more you help, the more your business will grow.
• Engage your prospect. A great presentation is more a conversation and less a lecture. Ask for feedback. Encourage questions and concerns. You want the other person to participate in moving this conversation forward. As part of your discussion, explore the benefits for the prospective associate. How many ways can you see eye-to-eye with this person with whom you are considering a working relationship? The mini-agreements that you create with the other person become the building blocks for forming a full-fledged business partnership.
• In Influencer, the authors (Patterson, Grenny, Maxfield, McMillan, and Switzler) state that if we want to influence someone to do something, it is important to be trustworthy. Avoiding hype and manipulative alterations of the truth will enable you to be even more influential. Trustworthiness trumps exaggeration every time and is a key ingredient among members of a stable organization. The no-hype rule begins when you first speak with a prospect, and continues well into the presentation and beyond.
• Have your prospect’s best interest at heart. When your intentions are pure, you can help the person you are speaking with to be more open and receptive. Ask the person you are speaking with to consider you as an advisor. Let her know that you will be considering everything about her situation as you make recommendations.


If you want to put to rest any concerns you have about your prospective associate or customer’s objections, ask for them. You can say this. “Jamie, along the way hopefully you will have questions and concerns. Let’s make sure to get them out in the open and I will address them as best I can.” When you discuss her concerns with her in this way it helps her feel that you are there to help. If you hear an objection that you do not know how to address, tell her that you think it is a terrific question, and that you would like to do some research, or perhaps bring someone to the discussion who has more experience than you do.

You can guide a conversation toward higher ground with a positive attitude. Saying “I am so pleased how this conversation went today” conveys to the prospect that you are not attached to a different outcome, you accept his position, you appreciate his concerns, that you don’t need for him to make a decision today, and other subtle cues that keep him engaged. Recently, I spoke with a woman who apologized for not wanting to meet with me until she had seen the on-line web tour. I told her that was an excellent decision and I looked forward to sending her the link. It doesn’t matter if I wanted to meet with her in person if she was not ready or if that is not what she wanted. By having her decision validated, she feels good about the next step, and we can move forward together. In fact, during this particular conversation, she started off sounding skeptical and hesitant. By the end of the conversation she thanked me and told me how much she was looking forward to reconnecting with me the next week.


By the time you have gone over all of the material, you may have a new friend. The person who is sitting opposite from you has gotten a sense of you. She feels honored and supported. The encouragement you have offered along the way has been genuine and personal. You have addressed her questions openly and responsibly and she knows that you have her best interest at heart.

I always let a prospective associate know that the outcome will be up to her. If she wants to move slowly, I will be a step ahead of her with fresh ideas to help her achieve the goals she sets for herself. If she wants to move very fast, I will be a step ahead of her to ensure that she gets exactly what she needs to move her business along quickly. I let her know what she can count on me for, and we talk about what is expected of her in terms of contributing to the organization. What special talents does she have from which the rest of the group can benefit? Teachers are encouraged to teach, fitness trainers are encouraged to present the benefits of the products to athletes, and corporate warriors are asked to shed light on organization development. I help people feel that they can make a difference to the entire group.

By now in the process, everything has been discussed and an enrollment is the natural next step. The person who is right for this business will often self-enroll by asking you what is required to become an associate. A pattern has emerged in which everything has been talked about openly. Trust has been established, and you have moved together toward a partnership. A seasoned associate knows the difference between encouraging someone at the right time, and pushing back against someone’s resistance. The former feels good and will make you want to keep doing this business. It is a function of sensing when someone is ready for the next step, and having your encouragement align with the person’s eagerness. The latter causes both parties to feel uncomfortable and explains why some people want to quit so early on. Trying to get someone to do something against his will is very different from helping him get what he wants. When you sense that someone is excited and ready to join your organization, offering to help him become a member of your team is the natural progression.

When you help people feel good about starting their business with you, you increase the chances that they will want to continue to be in business with you and will want others to join them. A lasting partnership starts with you as the person whom others trust. You have been impeccable every step along the way and you have earned your title as leader.

You have not tried to force the wrong person into your business. You have focused all of your energy in working with people who participated with you, in moving the process forward. You didn’t push against people. You were in the flow. Imagine that the person you are working with could become an asset to your organization forever.

How to Start a Home Business in Less Than 2 Weeks

What Kind of Business Will You Have?
It is time to think about what type of business you want. What do you like to do? Your skills, hobbies and interests are vital to helping you decide what type of business you should run. Once you decide what it is that you want to do, you can actually start your online search to find a business to run. You could buy an existing business opportunity or even get ideas to start your own.

When you decide on the type of business and look for existing opportunities, do your research. Ask to see proof of income for others in like situations, and phone numbers and addresses of these people so you can actually talk to a real person and not a paid spokesperson. Make sure you are not going to get scammed. Check with the Better Business Bureau to make sure there are no serious complaints against the mother company so that you are not buying into a scandal. If the business you want to buy is in the local classified ads, don’t respond to any ad with all capital letters or many exclamation points, as this is not professional and was not placed by a real company.

Real Opportunities
Actual business opportunities are ones that have been around for many years, and are not new startup companies. Many startup companies take years to get off the ground and are not able to offer franchise opportunities to anyone due to the newness of the company. Do not pay to get scammed, as many fake companies require money to get information alone about the opportunity. Real companies may ask for a fee to start, but they are covering costs such as a $500 startup fee to sign on with their answering service for a year, if it is a telemarketing company. Or for internet companies, you may be asked to pay a specific amount for a website to be built specifically for your business. Many online companies offer you the option of buying a site from them or building your own. This is legitimate and can be trusted in most instances.

Drop Shipping
There are companies called drop shippers that are legitimate companies on the internet. What they do is this: you list their items on auction sites for your own price, and then when you get paid from the auction site, you pay the drop shipper. They in turn ship your goods to your customer with your company name on the packaging. These are legitimate companies as long as you can find their information on a home page or contact information such as a customer service number that is in service. There are companies that say they do this service, but once you pay for their service, nothing is delivered but an inactive phone number and angry customers.

Adult Websites
Many adult websites offer the opportunity for you to be a franchise owner. This means that you would pay the startup cost for the building of your website, and all the products and information comes from the mother site. You simply name your site and advertise it, and the cost of the memberships sold on your site is yours. You would pay a monthly or annual fee for this type of business, but with the adult industry booming, it may be something you want to look into.

Buying Your Business
Look at the amount of money you are able to spend for startup costs. If you can only afford $200 for startup fees, don’t get discouraged about the number of businesses available. Just because you can’t afford $1,000 startup does not mean that you have to get suckered by scams, thinking these are the only opportunities available. Although many require a fee, it is not the end of the world if you don’t find the one you want on the first day of searching. Continue your search and you will find something you are interested in, that is in your price range.

Internet Business
There is less overhead in an internet home based business than in a brick and mortar business. Internet businesses include costs of your home internet service, and computer repair or upkeep, home electricity and such other bills including phone. The monthly or annual fee for your business website is also part of the overhead cost. This can add up quickly, but on average is much less than a brick and mortar business that has to pay employees, building rentals and other costs. The tax advantages of the internet home based business are much better than a business ran outside of the home. Tax breaks on your home phone and internet service as well as upkeep for all office materials and replacement is also available annually.

With all the options available for home businesses, how to start an online home business is very easy to find and open your own business successfully. Remember that research is the key to getting a legitimate opportunity, and just because a fee is involved does not mean it is a scam. Scan the local classifieds for franchise information on local internet opportunities as well as brick and mortar ones. Online home businesses are becoming more popular day by day, and it will pay off for those that get in early and are able to rise successfully to the top. Follow these steps and within 2 weeks you should be ready to start your home business.