The 5 Essential Characteristics When Evaluating a Home Based Business or MLM

1) Low unit cost

2) Membership based or highly consumable

3) Cannot be easily duplicated/limited competition

4) Experienced company management

5) Must have a lucrative compensation plan

The first essential characteristic when evaluating a home business or MLM is the unit cost. A product or service for a network marketing or home based business must have a low unit cost. Can the general public afford what you are trying to market to them? This should fall into a price range below $40.00. This is what most Americans can absorb into their budgets. A price below this amount does not compete with the cable bill or most hobbies. We know most Americans will give up a limb before they give up their cable TV. If your product is something that brings real value to the consumer they will make room for it. Below $40.00 the main concern would not be can I really afford this. The main concern would be, “Is this bringing value to me and my family’s life?” or “Am I getting what I paid for?” While most of the products that are sold in the MLM or network marketing arena are greatly marked up in price to be able to pay commissions, the optimal network marketing company takes what is very expensive and exclusive and makes it very inexpensive and commonly accessible.

Secondly, your product needs to be something consumers will purchase over and over again. One of the best ways to meet this characteristic is to have a product that is membership based. If your product or service is based on a monthly membership you can count on a monthly purchase from happy loyal customers. Customers can pay a low monthly membership fee or they pay for the whole year at once. A company based on a monthly recurring membership, is direct sales and complimented with a MLM opportunity is one of the best examples of a money making machine. With this combination you have options. You can build a membership base of just customers using your product or service and if you add value to your customers lives they will continue to pay the monthly membership indefinitely. This way if you choose to be just a direct marketer you can become wealthy without a down line. The other way to become wealthy with this model is to build a down line of reps that do the direct marketing for you or build their own down line of reps. You can do this when you have a product that consumers use and continue using for a lifetime. Once you build a membership base of customers paying on a monthly membership or build a down line of associates that build a customer base, you are set for life.

When trying to decide on a home based business the product or services you market needs to be something that is not easily duplicated. There needs to be limited competition or even better, no competition. The health drinks, dietary supplements, jewelry, cosmetics, and utilities like electricity are all great services and products. There are some great companies that sale these needed products and services. At the same time these products are either sold in retail stores for less than what you as a home based business could sale them, or you would have to play the mine is better than theirs game with other home based businesses offering the same product or service. There only a few select companies that fit the characteristic of limited or no competition. Find a company that you don’t have to worry about if Wal-Mart is going to get into the business of selling your product or have to convince a customer that your products and services are better or cheaper than xyz corporation. If you find a MLM company that charges a large start up cost lets say around $400.00 or more that usually means that opportunity doesn't make enough only marketing its' products. This is probably because of fierce competition and razor thin margins. The large start up cost is to pay commissions and this model is to be avoided because that is not a very strong business model when the sale of your products or services can't cover the cost of running the company.

The home based business you decide to become a part of must have leaders that have experience, wisdom, vision. The management team must work together like a well oiled machine and know the business they are in. I will use a sports analogy. We all know of the team that should have won it all. They had the best players, facilities, and fans, but they just couldn’t pull it together. What was missing was a competent head staff or team owner. Don't get caught up in the "get in on the ground floor" hype, if you haven't paid your dues in this business and settled your identity it doesn't matter where you get in at. Paying your dues and settling your identity is a lesson of its own. A true long term opportunity that you can hang your hat on is one with a company that has a number of successful years behind it but is in an expanding market. Find this combination and you've found a gold mine. This is difficult to find, most companies that have been around a while are in a saturated or contracting market.

With all of that said, you might ask “What’s in it for me?” great question. A home based business has to have a lucrative compensation plan. You have to be able to make money as soon as you start your business. It has to be straight forward and easy to understand, and don’t talk to me about “point values, bonus points or matrixes” just tell me how much cash I will make. You have to be able to rely on getting paid when you should get paid. You have to have confidence that the check won’t bounce. One off the most important things is that it has to be lucrative, who wants a home based business that can’t make them rich? Find a company that pays its reps everyday. No waiting for the end of the month or even the end of the week, every time you generate business you get paid within 1-2 days is the best. This way you can see how you can get paid daily. Find a company that pays out based on the amount of revenue you generate and your level in the pay scale, it’s that simple. Of course there should be ways to make bonuses. When you are evaluating a home based business you have to take the emotion out of it and look at it with your best business mind. This is not a hobby you’re getting into, hobbies cost you money, a business makes you money. You need to treat this like a business and make the decision of which network marketing company to join based on a solid business plan, not the next hottest thing or because of an emotional DVD or opportunity meeting.

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