If you're looking into owning your own business, there are many options for you to choose from. You can start a business "from scratch", you can buy a franchise, or you can join a direct sales or network marketing company.
Starting a business "from scratch" usually comes from a passion, experience, or a good idea. Unfortunately, for many people looking for a home based business, those things just don't always happen. So for the rest of us, there are some great alternatives.
The appeal of owning a franchise...
The appeal of owning a franchise is, most importantly, the system you get when you buy. McDonald's was the franchising pioneer. They have a terrific system for making and selling lots of hamburgers. Franchising did go through it's share of scrutiny in the beginning, but finally the government decided it was a perfectly legal way of doing business. And today there are thousands of franchises for you to choose from.
Mail Boxes, Etc. has a great system for dealing with your mail. 7-11 has perfected the convenient store. Fantastic Sam's has a system for hair cuts at a low price. You get the idea.
When you purchase a franchise, you not only get the system, you also get instant name recognition, support and training, as well as connections to suppliers, etc. It's a larger-then-life-sized "business in a box."
But, as most of us know, owning and operating a franchise comes at a heavy price: ten's of thousands to hundreds of thousands of dollars (not to mention that most, if not all, franchises cannot be run from your home). And in most cases you're 'baby-sitting' employees. Congratulations! You just bought yourself a $100,000 managerial JOB.
Most of us are trying to avoid a "job" -- or anything that resembles one. Aren't you really looking for more freedom? Time and financial freedom, and the freedom of being your own boss? If that is the case, then a traditional franchise is probably not what you're looking for.
But there is some good news here -- there is an affordable, home-based alternative to the traditional franchise.
Direct Sales and Network Marketing companies are set up similarly to franchises, in that they supply the system, the products and/or services for you to market, in many cases the name recognition (like Avon, Tupperware, or Watkins, for instance), but they also provide you the ability to work from or at home.
Understanding the difference between "from" home and "at" home is vital when you're searching for a home based opportunity. When you work "from" home, you do some work at home -- like making calls, accounting, etc. -- but the main part of what you do is outside of the home. Like in the case of a beauty consultant who has a home based business, but works mainly in other people's homes, giving free facials, doing parties, etc. Whereas there are, for instance, Internet-based opportunities that allow you to work completely at home, using the computer and telephone. One is not necessarily any better then the other, but you will probably have a preference. So it's something to consider when evaluating an opportunity.
Both Direct Sellers and Network Marketers work as "Independent Contractors", for their parent companies. The main difference between the two is this:
Direct sellers get paid commissions on their sales alone. Depending on the product and company, they could get paid anywhere from 1% to 50% of the purchase price. Most of the time you can expect 5% to 20% commissions. Many times, there are also incentives, like free products, prizes, trips, cars, etc., too.
Network Marketing companies compensate you in a similar fashion, but with the added benefit of being able to sign up and train other "independent contractors" for the company, and earning a small to substantial commission on their sales, as well. In exchange for those extra commissions, you are expected to train these new people with the "system" that the company has provided. In many cases, you're paid on several levels of distributors "below" you -- the people you've brought in, as well as the people that they've brought in, etc. Contrary to what some people presume, this is a perfectly legal and ethical way of doing business. Just like franchising, direct sales and network marketing have been through their share of scrutiny, but are now accepted by the government and public at large. In fact, the direct sales and network marketing industries do over $24 Billion in sales each year in the United States alone according to the DSA -- yes, that was a "B" in front of billion.
If you're interested in these alternatives to a franchise, you're first stop should be the FTC web site at . When evaluating a company, be sure to see if the FTC has scrutinized them, or had any "actions" against them (or are in the process of doing so) and what was the end result of those actions. Many times these things will lead to the demise of the company -- if not directly, then indirectly through the loss of their distributorship. On the other hand, many direct sales or network marketing companies that achieve a certain level of success may have to face the FTC at some point, to make sure that they are performing their business in the most legal and ethical of ways. Companies that survive this with flying colors frequently thrive afterwards.
The DSA or Direct Sellers Association www.dsa.org, on the other hand, is a "self-policing" type of organization. The DSA requires it's members to adhere to the "Association's commitment to ethical business practices and consumer service" and code of ethics. In this way, the member companies are regulating themselves by upholding the strict standards and guidelines that the DSA requires. So you may want to consider a company that is a member.
So, would you like to save thousands, if not ten's or hundred's of thousands in start up costs? Work from home? And own a thriving and profitable business with no commutes or employees? Then direct sales or network marketing may be for you.
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