Evaluating a Home-Based Business Opportunity

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I have been toying with the idea of getting into one of those MLM companies. I have been wanting to start my own business and have a friend who has been really successful with her health and wellness company. I’ve tried the products and really like them. I’m not sure I’m the “selling” type, though, and I just don’t know if I should do this. Do you have any tips to help me make a decision?

There are a lot of options for starting a home-based business, even if you don’t have ideas of your own. MLM, Network Marketing, and Direct Sales companies (Like Avon, Tupperware, Herbalife, etc) all have business opportunities that you can explore. Before you jump into a company, however, there are certain factors that you need to consider:

1) Research the company for six to nine months before doing anything. Attend all the meetings and conference calls that you can. Don’t be swayed by people telling you that you need to get in “now.” In the story, “The Tortoise and The Hare,” the tortoise always wins. Always. Take your time. You wouldn’t open up any brick and mortar business without doing your research, would you?

2) Start up cost: Is this a McFranchise that will cost you tens of thousands of dollars? Or a minimal start up cost? What is your budget? Do you need to get a business loan? What do you get for your start-up fees? What ongoing or renewing fees are there? Can the compensation plan and all fees be explained in less than 60 seconds?

3) How long the company has been in business? Do the founders have any sketchy legal matters in their past? Is the company debt-free? If the company has been around less than four years, don’t bother. They’re too new to know what they’re doing.

4) Training and support: What kind of training does the parent company provide? If this is your own business, what knowledge do you bring to the table? Do you have a business plan? Do you have a marketing strategy?

5) Follow the person who would be ‘sponsoring’ you, and see how they’re doing. Most likely, they’ll be really new at this, so be sure to follow their up-line as well to determine what kind of support and training you’d be getting. Do you trust them? Do you like them?

Find someone who has been in the business for at least three years and has been successful at it. Pick their brain and see if what they did can be duplicated.

6) Automation: Most importantly, can this business run without you? When you’re on vacation, are you going to be constantly thinking about the business? Will you earn income even when you’re sick? The key here is to make money even while you’re sleeping.

7) Determine if the compensation is worth it to you. Can you make decent money just by selling products? Most companies will make it very worthwhile to have distributors under you, but if you have to spend most of your time convincing people to join the business instead of selling your products then you’re doomed to fail. Not everyone is an entrepreneur, but everyone is a consumer. Make sure your “consumer compensation” is worth your time.

8) Growth: What potential does the company have to grow? Can they offer new products and services? Are they stuck in an archaic way of doing things? What ideas do you have for improvements?

9) Try the products. Do you like them? Do you have a realistic monthly quota? It’s very hard to sell what you don’t like. Get trial samples, or invest in some products to see if you are, or can be, a raving fan.

Don’t be swayed by the hype or the supposed ‘easy money’. After going through the logistics, if your excitement grows instead of wanes you’ll know you’re choosing the right opportunity for you.


Think about all the extra money you could make by being a mystery shopper, starting your own business, or working from home for a legitimate company. Take control of your income and check out our LEARN page for a list of classes, books, and more!

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2 Replies to “Evaluating a Home-Based Business Opportunity”

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