Business ideas, and working from home.

Many of us have dreamed of starting our own business; the current recession has resulted in redundancies and layoffs so many people are forced to consider whether self-employment is the way to go. Will working for yourself ultimately give you more security? Are you disciplined enough to manage your time and resources effectively?

Money is tight, and the banks are not lending, so what type of business is best to start in a recession? Here are 10 points to consider before deciding what type of business is best for you.

1/. Should I purchase an existing business for sale? This route may be problematic if you do not sufficient cash reserves to purchase the business. To borrow money during a recession isn’t easy, banks will want to see a detailed business plan and will want to assess whether you have the right qualifications to manage the business.

2/. Do I have the right qualifications to start a business? Banks will look at your track record to determine whether they think you will make a success, and whether you are a good financial risk, someone to lend money to. TV shows like Dragon’s Den show up contestant weaknesses, many budding entrepreneurs have a very poor understanding of how to make an assessment re whether a business idea is viable. Under the scrutiny of investors, unless you have the facts and figures available to show projected turnover, profit margins and net profit, return on investment, you will fail, so you must do your homework. Is the business viable? Why is the business owner selling? Will you need specialist training? Will training be provided? Who valued the business? Does the vendor’s valuation match an independent business advisor’s valuation? If not, will the seller negotiate on price? These are questions to ask when purchasing an existing business.

3/. Should I buy a franchise? A franchise is supposed to be a proven business, proven to make money and be a winning formula, but be sure to do your research to see evidence of the profit that franchise operators are supposed to make. If a franchise is being sold on, ask why the owner is selling – does the profit match the marketing hype? There are thousands of vinyl printing machines and badge embroidery sewing machines stored in back rooms around the country, so be sure to talk to existing and past operators – a good place to do this research is through search engines and business forums.

4/. Should I consider working from home? The Internet provides great opportunities to create a work from home business. Working from home will reduce your overheads, and you can spend less time and money commuting to an office. By using VOIP telephone services like SKYPE, you can keep communication costs down to a minimum.

5/. What type of business can I start to work at home? Internet marketing is one area that has proven to offer potential, but as with all business, you need to take advice and be wary not to spend money on “make a million overnight” type videos and DVDs. The Internet is a fabulous resource for free information so use it for research to determine what type of affiliate program to sign up for.

6/. What is affiliate marketing? Affiliates are paid to promote products or services, usually on a commission basis, or according to the number of customers they drive to a particular website, owned by the affiliate program operator. Affiliates do not make a fortune overnight; so do not fall for promises of phenomenal wealth.

7/. What type of product should an affiliate promote? The best type of product to promote is one that is not too common, e.g. not mobile phones or ring tones, since if too many people sell the same stuff; the cost of advertising will be too high. Internet advertising is sold on a pay per click basis, auction style, and this means that the more people use the same key words on programs like AdWords, the more expensive these search words will become.

8/. What type of affiliate product should I promote? The best affiliate products are niche products. As an example, I sell leisure Hovercraft and for every hovercraft I sell, I make $1000 or more. Rather than pay for advertising, I target the type of customer who purchases small hovercraft, for example leisure users, rescue organisations, military personnel, rental operators, resort owners, bridge maintenance and repair companies, SuperYacht owners. Because I approach customers most likely to need my product, my focused marketing efforts are rewarded through more sales. Some affiliates just advertise products in a scattergun approach, and so spend a fortune on advertising for minimal reward. It’s all common sense stuff really.

9/. Choose a small business with growth potential. Ok, on a budget, you may need to start small, and this is a good way to start. However, if you continue to think small, and operate in a narrow market, your growth potential is restricted, so find a business that offers growth potential. Starting out as an affiliate with virtually no overheads allows me to test market products and markets for growth potential. If I sell a few more hovercraft, then I might elect to become a dealer or rental operator. As a dealer I can sell direct for better commission rate, or as a rental operator I can sell hovercraft rides at say $10 per ride. People love hovercraft and this market has growth potential.

10/. Home business opportunities are plentiful, and you can keep your costs down by working from home. No need to employ expensive accountants, tax advisors are usually quite capable of advising how to do your accounts with a simple income/outgoings ledger to keep track of profit made. The best affiliate programs provide free training and resources, so keep costs down to a minimum.

For further information about the affiliate and dealer programs mentioned in this article, please visit my website http://businessidea2010.blogspot.com/