Lesson 3: What is my business going to be all about?
Saturday, February 7th, 2009
Now that you have decided on the type of income you want to have, the next step in your quest for the ultimate home-based business will be selecting the business model you are going to use. This selection, in my opinion, should come before you decide on a market and a product. To create an income of the type you selected, a business model that provide that type of income should be chosen. Only then will you select a market and a product that best fit the business model of your choice.
We can begin our treasure hunt by looking at different business models and examining the up and down sides of each. But before we discuss possible “solutions”, we need to be clear about the basic requirements this solution needs to answer.
First of all, we are talking about a home-based business. That, for me, means that you are not going to employ other people (as this will not be a “home” business any more). On the other hand, you are looking for leverage (not relying only on your own efforts). These seem to be contradicting requirements but there is a way around it! Some might say that outsourcing (subcontracting work to other people) is the answer but I tend to think that because it will require handling suppliers and coordinating the work of others (which is more work for you) it’s not really a solution. The solution, in my opinion, is creating a team of independent “colleagues”, all having the same goals, and establishing some form of collaboration. For example, an affiliate program can fit that model.
The second requirement I would like to address is related to “product”. I assume that you are not looking to “play store” – there will be no storing and distributing of goods from the home. It does not mean that there will be no physical product. It just means that you will not be handling it personally. Some sort of automatic or third party solution will be needed.
Obviously, you are looking to create an income. Additionally, I assume that a “money game” is of no interest to you, as it is an illegal operation in many countries. I’m sure you will agree with me that a basic requirement of your business will be that something of value to people (not necessarily monetary value) is going to be sold and your income is going to be based on revenue from those sales.
To sum it all up, you are looking to leverage the power of a team in order to provide people with products of value that you are not going to sell personally. In addition, lets not forget your primary incentive, which was creating a residual, passive source of income. I am not saying that it’s going to be a walk in the park – you will need to work at building your business. But once it’s on the right track, you will be able to “take the foot of the paddle” and the income stream will keep on flowing.
If you examine existing home-based businesses, you will find that most of them are, traditionally, nothing more than a “job” – people are still exchanging time for money. Any business that is based on your unique skills, selling something that you have personally created or require your personal involvement will not fit the basic requirements we have discussed.
I will not be talking about investment businesses – they require specific skills and knowledge that can be gained with time and money. I’m going to limit this discussion to businesses that do not have a long learning curve and enable you to start making some money as you go.
There are two basic types of businesses that meet all the criteria that we have talked about earlier, and these are: On-line Marketing and Network Marketing. There are many methods of conducting businesses on-line but most of them are using the Internet as a vehicle and are still a “job” (exchanging time for money). We will only be discussing business models that are pertinent to our basic requirements.
An on-line marketing business where you sell your own creations (usually some form of electronically delivered information – e-books, newsletters, videos, etc.) may meet our requirements if properly constructed. Using such businesses models as affiliate, community, subscription or utility model is the right course to take. However, these require a certain degree of technical know-how if you are going to set them up by yourself. Using ready-made systems can be a viable alternative. A more accessible method will be to join someone else’s business as an independent associate or distributor (usually by means of an affiliation program or some sort of mlm system).
Basically you are left with this choice to make: create your own “product” and establish the mechanism to market it or build upon someone else’s product and use his provided mechanism for marketing. Either way you will need to apply strict criteria when making you selection.
The following lessons are going to deal with the selection criteria, one by one.
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