When starting a home business it's important to evaluate yourself first, to determine whether the company, products or services you're interested in are a good fit. Do you have an interest in the products and services you're selling? Do you believe the company will provide the support and quality your customers are looking for? Do you have the skills and knowledge needed to be successful in promoting online and offline to make your business a success? If you don't have the skills today, are you willing to learn what you need to make your business thrive?
Before starting your home business, you'll want to research business models to find the one that best suits your lifestyle and personality for a number of reasons. Knowing how they operate will help you decide on the model or combination of models that will work best, based on your business and personal goals.
What is a Business Model?
A business model is the way that a company generates revenue through the sale of products and services, and makes a profit from its operations. It has to do with the systems that are set in place to make the entire sales funnel work to fit your business goals and generate a profit.
It will be hard to maximize profits when you start a business without knowing how it operates. You may spend unnecessary time spinning your wheels when you start out this way. Yet so many people are guilty of overlooking this step, not doing their research in the beginning and letting the "shiny objects" take over their judgement.
If you want to have a thriving business that will support your lifestyle, it's important to find a good fit since it's something you will do day in and day out. When you put a little time into thinking of which company, product or service will be a good fit for your personality, you're setting the stage for a successful and profitable experience. If you hop on the bandwagon for the first thing that comes along and you're only looking at the commission structure and popular fads, you may lose interest when the opportunity becomes challenging.
It's important to find the best combination of something you're really interested in, maybe something that supports your hobbies, a cause you're passionate about, or something you've always wanted to do.
If you believe in the products and services you're promoting, it will motivate you to do what is needed to get the job done. It will also come through when you are talking to others about your opportunity. The compensation is a big part of the equation as well, but it shouldn't be the only thing you consider.
In this article we'll discuss a few business models and their general mode of operation. There is also a short quiz at the end of the article that you can use to determine based on your personality, the areas that you can explore when evaluating opportunities.
When starting a home business, the "model" or mode of operation is how you will earn income from your business. If the business model, products and/or services don't line up or support your personality type, you may have a bigger hurdle to climb in order to reach the level of success you're looking for. Simply put, a business model is how you setup your business to make money in a way that suits your personality and serves what you value most in life, and if you're company and your personality don't line up, you may be miserable.
What Are My Options for Selecting a Business Model?
The possibilities for starting a home business are endless. Many six and seven figure earners have mastered and duplicated these models and used a combination of income streams to create their online fortunes. Which model(s) are best suited to help you reach your personal and financial goals? Here are some popular business models to consider:
Selling Your Own Stuff
With this option, you're branding yourself or your company and selling your own products or services, and/or access to the knowledge and skills you’ve acquired in your lifetime (even if you think you have none), which is is one of the most exciting and natural ways to build a business you love. With this model, you could position yourself as a service provider, coach, expert, consultant or trainer and help your clients solve problems.
For example, you can become an expert at landscaping and lawn care. Not just cutting lawns, but providing services that will help customers have a beautify landscape. To add another source of income, you could sell treatments, fertilizers, landscaping products, books, and more from your own blog or website. If you don't have these products yourself, read below about selling other people's stuff through affiliate marketing. Amazon has a great affiliate program that you could use to sell these products online. You could also establish contracts and partnerships other companies like leasing and realty companies to help their customers with commercial landscaping, mowing and snow removal.
A lot of people start their first home business selling stuff they've made, selling information on a particular area of expertise, sharing their knowledge and/or selling services. It's the most cost effective way to start up when you don't have a large budget and many times it allows the business owner to pursue their interests and do something they enjoy.
Thanks to the Internet, there are many ways in which you can brand yourself. You have endless opportunities, to engage an audience that's ready to buy solutions. Ideas include marketing yourself and selling your own products from social media platforms, blogging, vlogging and podcasting. To learn more about using social media to build your business check out Hootsuite Academy where there are free courses you can take to learn to create strategies using social media platforms
To sell information and share you're expertise, video course platforms like creativeLive and Udemy are two areas where you can share your knowledge on just about any topic. Love the creative side of things... crafting and design? Sell your works of art on Etsy!
Selling Other People's Stuff​
Selling other people's stuff as a distributor or an affiliate means you don't have to create or build anything, you just market and promote products. Both of these are popular business models because the company handles all the back end processes like shipping, returns, complaints etc. All you do is sell and promote the products and make your commissions. Learn more about the distributor and affiliate modes of operation.
Affiliate Marketing
Affiliate marketing is the process of earning a commission by promoting other people's (or company's) products. You find a product you like, promote it to others, and earn a piece of the profit for each sale that you make. This a popular business model for bloggers and social media users to inform users, provide reviews and sell products.
If you don't have a blog, take a look at our video series that will walk you through installing a self hosted WordPress blog in less than 10 minutes. The series includes 4 step by step videos on what you'll need to get started, installing your blog, and choosing themes and plug ins to extend the functionality of your blog.
As an affiliate marketer, there are several areas you'll want to pay close attention to. First, read about using Affiliate Marketing to Monetize Your Blog. You'll to learn how this model works and popular brands that offer great affiliate programs. It's important to not only look at the commissions offered, you'll also want to choose products that you can recommend without hesitation.
The companies you associate with should also mirror your brand and quality standards. For example you'll want to associate with companies that will give your customers excellent customer service and quality products and services. Second, recognize that you'll need to disclose your affiliate links, so that customers will know that you'll receive compensation from your review. One of the plug ins that makes disclosure easy is called review disclosure. This plug in provides a short code that enables you to quickly and easily add disclosures to your reviews.
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Network Marketing
Is a business model that is very popular with people looking for part-time, flexible businesses. Some of the best-known companies in America, including Avon, Mary Kay Cosmetics and Tupperware, fall under the umbrella of network marketing. With network marketing, you have the potential to earn life changing income while selling products and services to your personal contacts
Some network marketing companies, like Total Life Changes offer a combination of direct and affiliate sales to offer their reps more flexibility in the fitness, nutrition and skin care industries. If you're good at both ways of earning, you can bring in even more sales! They also offer bonuses and incentives for bringing on team members, but it's not a requirement to earn. The great thing about this company is that you can start earning from day one. Learn more
Network marketing programs usually feature a low upfront investment for the purchase of a product sample kit and the opportunity to sell a product line directly to personal contacts. Most network marketing programs also ask participants to recruit other sales representatives. The recruits constitute a rep's "downline," and their sales generate income for those above them in the program. This is also an industry where training is a crucial factor in the success of your business. Learning to recruit online and crush direct sales
There are network marketing companies that cover a number of industries including communication services, Internet access, nutrition products, weight loss programs, water filtration systems, financial programs, electrical power, solar power, just to name a few.
Amazon FBA - Retail Arbitage
With the Fullfillment by Amazon business model, you store your products in Amazon's fulfillment centers and they pick, pack, ship and provide customer service for these products. Once you get started, you will create product listings and prepare and ship your products to Amazon. Customers order your products and Amazon picks packs and ships your products. They also provide customer service as well.
This business model is a good fit for an online business because the goal is to drive traffic to your Amazon products, so that you can make sales and generate income. Investing in learning internet marketing will pay off in helping entrepreneurs to succeed using this way of doing business.
With this business model, you don't have to deal with the end customer. There is an upfront investment to get set up on Amazon. You also have to find products to sell so there is also an investment to buy the products, pack and transport them to Amazon. You will also have selling fees once the products sell. A lot of entrepreneurs who use this model use drop shippers to send products from the place where the entrepreneur buys them to get them transported to Amazon, thus they never have to touch products. There are fees associated with this service if applicable, as well.
This can be a very profitable option for those who don't want to deal with end customers. If you're detail oriented and good at finding products that are best sellers on Amazon, you can make a great income. The down side of this is that it may take a while to determine what the best sellers are. However there are plenty books on the topic that can help you work around any sticking points.
FBA can help your products gain more visibility in the marketplace, and that can translate into more sales for you.FBA also makes your products eligible for Amazon Prime free two-day shipping, free shipping and other similar options, which customers love. Finally, one of the biggest advantages of FBA is that Amazon is a trusted brand.
There are other platforms including your own blog or website, eBay, classified ad sites and more that you can use to sell products found at garage sales, retail clearance aisles, and outlet stores. Many successful entrepreneurs use a combination of platforms to sell products. Be sure to search the web site's terms of service to learn about their feed ensure that your items meet their requirements.
Have You Ever Heard of Retail Arbitrage?
​Use techniques like retail arbitrage to enhance your profits by finding items locally on retail store shelves that you can flip and sell for a profit. There are apps that will help with this process and shopping websites that have routine deals, like Amazon Gold Box Deals, Amazon Coupons, Outlet Deals, Warehouse Open Box Deals, and Digital Deals (books, music and video). To learn more about retail arbitrage, read Retail Arbitrage: The Blueprint for Buying Retail Products to Resell Online
Direct Sales
The direct selling business model involves the marketing and selling of products directly to consumers away from a fixed retail location. Peddling is the oldest form of direct selling. Modern direct selling includes sales made through the party plan, one on one demonstrations and other personal contact arrangements.
The party plan is a method of marketing products by hosting a social event where products will be demonstrated and offered for sale. It's also a way to generate sales leads as a result of the party. Hostess gifts are sometimes offered for hosting a party based on the amount of sales generated from the party. Attendees are also offered hostess gifts and incentives if they sign up to have a party too.
Here's An Example of How it Can Go Wrong Really Quickly
Regina is an introvert who signed up with a direct sales company because of the low entry costs and their great commission structure. When she signed up, she had never tried the products and didn't really know if they were good or not, but she signed up because she needed quick money.
Regina, a typical introvert, hated making sales calls, giving presentations and setting up home parties. To top it off, once she tried the products, she wasn't really impressed with it. As time went on, Regina became disinterested and started looking for another opportunities. After a few months her sales began to slide because she lost interest in the products.
She felt tied to the in person transactions she had to drum up to meet her sales goals. She felt that she had no other ways to bring in leads and sales. After she ran out of people to contact in her warm market, she was not sure how to proceed. She certainly didn't want to resort to handing out flyers and business cards at the mall.
Next Steps...
Some people are able to take lemons and make lemonade. They struggle through and make it work, while others become discouraged and quit. Some of the most successful direct salespeople have found ways to use technology to sell products versus the conventional in person methods. This has provided some additional options and it's the way that many introverts have conquered direct selling and made life changing income doing so. Investing in learning internet marketing, has helped many introverts and extroverts alike promote and sell products online, where they were not successful before.
Joining an opportunity because of the commission structure is not a good way to select a work at home opportunity. If you don't like the products you're selling and the business model doesn't match up with your personality type, you will more than likely struggle to reach your income goals, Plus, the reason many people leave their 9 to 5 jobs is because they want financial freedom. Struggling and worrying about your sales quota each week is not a good way to live.
Making introductory and follow up calls, sales presentations and setting up home parties is primarily how the direct sales model work.s This is how you achieve success in this kind of company. While I know many people who are introverts who seem to thrive at direct sales, it seems to be a better fit for people who are more outgoing and socially involved. Keep in mind that making sales calls, giving presentations and setting up home parties is the bread and butter of this model when making your decisions.
Take a Short Quiz
There's really no perfect personality for any business model. Some are naturally better suited for some over others, but I know plenty of people who don't fit the mold for their particular business model, but they've been very successful. In most cases your business is pretty much what you make it. And if you're the kind of person that is good at overcoming obstacles, you'll do fine.
If you find that you fall short in a particular area, you can always partner with another person who has the missing links. If you want to find out whether you're have more tendencies one way or another, take Eysenck’s Personality Inventory (EPI) (Extroversion/Introversion). This test is not scientific, it's mainly for fun. or you can take the short quiz below from Staples website, to learn what kind of business might be best for you. No matter what you do make sure to include fun and enjoyment as part of your daily routine.
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When starting a home business it’s important to evaluate yourself to determine the business model that fits your lifestyle, and personality. There is a short assessment that you can take to help you figure out which model will work best for you.