Business Opportunities sometimes referred to as “Biz Op’s or Licensing” is a type of business ownership where a person usually buys a new start-up company (non-franchise). There are very few regulations and laws governing “Biz Op’s or Licensing” and therefore there are many illegitimate and scams with this type of ownership.
Most of the time these type of businesses cost much less than a franchise because they do not give the owner as much help as a franchisor would give. Most of the time they have a high failure rate since they are not regulated very much. Besides giving little help they do not have to disclose their failures. Biz Op’s in my opinion are normally a bad investment. You can sometimes pay much as a franchise to open this type of business yet get no or very little in help in starting or operating it.
There are some good Biz Op’s but most are kind of scary to get into. If you do decide to look at one, research those owners of the company to see what their backgound has been. Be sure to look and research all those owners who have closed their doors. If the company will not give you the list of those closed, do not buy. Also if a company gives you flowery earnings claims without back-up and proven data, then it is probably a scam. Usually they will point to one or two people who have made a lot of money and suggest you can do the same. There is probably a good reason those one or two people have done well. It might take some digging, but if you are serious, it might be worth getting out the shovel.
Just remember most people who buy Biz Op’s or Licienses lose their investment. If you do proper research, you will not be one of them.
Saturday, September 17, 2011
Thursday, September 8, 2011
Multi Level Marketing
Multi Level Marketing (MLM) has been a quick way to get a company’s product or service into the market place. It seems these type of companies can spring up and grow rapidly. They can be over night successes or failures.
Multi Level Marketing according to Wikipedia “is a marketing strategy in which the sales force is compensated not only for the sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and the hierarchy of multiple levels of compensation.” Sometimes MLM has been called Network Marketing, Referral Marketing and sometimes Pyramid selling.
There is a fine line between multi level marking and pyramid selling. Pyramid selling is illegal because it is too easy to cheat the buyer. Pyramids are usually low cost investments where the buyers invest money where little or no product or service is rendered. They buyer invests a little money in hopes when others in their downline sign on they will get a piece of the action. Most of the time exaggerated earning claims are given. Chain letters, Ponzi schemes and other consumer fraud scams are prime examples of pyramid type selling. The crook, Bernie Madoff was involved in a high cost pyramid selling. Many fortunes have been lost in this type of pyramid selling.
MLM marketing has succeeded over the years for the most part because they usually sell a legitimate product or service. But there have been many lawsuits with these companies trying to defend themselves. MLM is not a fully regulated business model so there are many exaggerations being made with very little proof of income. Some people can do very well financially if they have the right personalities, work ethic and personal contacts. Usually these companies will point out a few very successful members but never tell you the negative side of the business.
Most of the time these MLM companies are honest and legitimate businesses with well known names, but they still have their own baggage they don't want to talk about. Usually it is a high failure rate or lawsuits from its members (they do not have to disclose). Well known names like Avon, Tupperware, Kirby, Nuskin, Amway and hundreds of others have used MLM to expand the sales of their product.
I have known some who have become millionaires in MLM and some who have made a good living for a number of years. Mostly I have known people (including myself) who have bought into a MLM business and have quit within a short time. Most people joining these businesses never make their investment back. Since it only cost them a few hundred to a few thousand dollars to join, they chalk it up to experience and move on.
As reported in Wikipedia, they quoted “The Times”, "The Government investigation claims to have revealed that just 10% of ____ (one of most popular MLM company) agents in Britain make any profit, with less than one in ten selling a single item of the group's products." According to Newsweek, in one very popular MLM companies own disclosure statement, “fewer than 1 percent qualified for commissions and of those, only 10 percent made more than $100 a week.”
The USA today had several articles on MLM. Here is what they reported.
• While earning potential varies by company and sales ability, DSA says the median annual income for those in direct sales is $2,400.
• In an October 15, 2010 article, it was stated that documents of a MLM called ___ reveal that 30 percent of its representatives make no money and that 54 percent of the remaining 70 percent only make $93 a month. The article also states ___ is under investigation by the Attorneys General of Texas, Kentucky, North Dakota, and North Carolina with Missouri, South Carolina, Illinois, and Florida following up complaints against the company.
• A February 10, 2011 article stated "It can be very difficult, if not impossible, for most individuals to make a lot of money through the direct sale of products to consumers. And big money is what recruiters often allude to in their pitches."
• "Roland Whitsell, a former business professor who spent 40 years researching and teaching the pitfalls of multilevel marketing": "You'd be hard-pressed to find anyone making over $1.50 an hour, the primary product is opportunity. The strongest, most powerful motivational force today is false hope."
If you go into and Multi Level Marketing, realize the deck is stacked against you. If you have many contacts outside of your family, friends and are willing to give them a sales pitch, if you are outgoing and have a gregarious personality and if you are willing to work long hours during the evenings, then you might be able to make some money in MLM. If you are planning on selling family and friends, it is the fastest way to alienate yourself from them.
If you do go into MLM, just don’t call me to join for I want to stay your friend.
Multi Level Marketing according to Wikipedia “is a marketing strategy in which the sales force is compensated not only for the sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and the hierarchy of multiple levels of compensation.” Sometimes MLM has been called Network Marketing, Referral Marketing and sometimes Pyramid selling.
There is a fine line between multi level marking and pyramid selling. Pyramid selling is illegal because it is too easy to cheat the buyer. Pyramids are usually low cost investments where the buyers invest money where little or no product or service is rendered. They buyer invests a little money in hopes when others in their downline sign on they will get a piece of the action. Most of the time exaggerated earning claims are given. Chain letters, Ponzi schemes and other consumer fraud scams are prime examples of pyramid type selling. The crook, Bernie Madoff was involved in a high cost pyramid selling. Many fortunes have been lost in this type of pyramid selling.
MLM marketing has succeeded over the years for the most part because they usually sell a legitimate product or service. But there have been many lawsuits with these companies trying to defend themselves. MLM is not a fully regulated business model so there are many exaggerations being made with very little proof of income. Some people can do very well financially if they have the right personalities, work ethic and personal contacts. Usually these companies will point out a few very successful members but never tell you the negative side of the business.
Most of the time these MLM companies are honest and legitimate businesses with well known names, but they still have their own baggage they don't want to talk about. Usually it is a high failure rate or lawsuits from its members (they do not have to disclose). Well known names like Avon, Tupperware, Kirby, Nuskin, Amway and hundreds of others have used MLM to expand the sales of their product.
I have known some who have become millionaires in MLM and some who have made a good living for a number of years. Mostly I have known people (including myself) who have bought into a MLM business and have quit within a short time. Most people joining these businesses never make their investment back. Since it only cost them a few hundred to a few thousand dollars to join, they chalk it up to experience and move on.
As reported in Wikipedia, they quoted “The Times”, "The Government investigation claims to have revealed that just 10% of ____ (one of most popular MLM company) agents in Britain make any profit, with less than one in ten selling a single item of the group's products." According to Newsweek, in one very popular MLM companies own disclosure statement, “fewer than 1 percent qualified for commissions and of those, only 10 percent made more than $100 a week.”
The USA today had several articles on MLM. Here is what they reported.
• While earning potential varies by company and sales ability, DSA says the median annual income for those in direct sales is $2,400.
• In an October 15, 2010 article, it was stated that documents of a MLM called ___ reveal that 30 percent of its representatives make no money and that 54 percent of the remaining 70 percent only make $93 a month. The article also states ___ is under investigation by the Attorneys General of Texas, Kentucky, North Dakota, and North Carolina with Missouri, South Carolina, Illinois, and Florida following up complaints against the company.
• A February 10, 2011 article stated "It can be very difficult, if not impossible, for most individuals to make a lot of money through the direct sale of products to consumers. And big money is what recruiters often allude to in their pitches."
• "Roland Whitsell, a former business professor who spent 40 years researching and teaching the pitfalls of multilevel marketing": "You'd be hard-pressed to find anyone making over $1.50 an hour, the primary product is opportunity. The strongest, most powerful motivational force today is false hope."
If you go into and Multi Level Marketing, realize the deck is stacked against you. If you have many contacts outside of your family, friends and are willing to give them a sales pitch, if you are outgoing and have a gregarious personality and if you are willing to work long hours during the evenings, then you might be able to make some money in MLM. If you are planning on selling family and friends, it is the fastest way to alienate yourself from them.
If you do go into MLM, just don’t call me to join for I want to stay your friend.
Saturday, September 3, 2011
Many Ways to Own a Business
There are a few types of businesses a person can own. Over the next couple of weeks I will talk about a few of them. They will include what is called Multi-level marketing, Business Opportunities, Franchising, buying an existing business and starting your own from scratch.
Over the years of have been involved with all of them. I will tell you the good and bad about each. Becoming an entrepreneur is not easy and seems to be a curse or a blessing. If you do it the wrong way, it is a curse. If you do it the right way, it can be fun and very rewarding.
How do you know which is right for you? Read some of my thoughts over the next month and maybe you will have that question answered for you. Remember to always do your homework and don’t let emotions of the moment direct you.
If you know anyone about to start or buy a business, have them read my blog these next few weeks.
Over the years of have been involved with all of them. I will tell you the good and bad about each. Becoming an entrepreneur is not easy and seems to be a curse or a blessing. If you do it the wrong way, it is a curse. If you do it the right way, it can be fun and very rewarding.
How do you know which is right for you? Read some of my thoughts over the next month and maybe you will have that question answered for you. Remember to always do your homework and don’t let emotions of the moment direct you.
If you know anyone about to start or buy a business, have them read my blog these next few weeks.
Saturday, August 27, 2011
Learn, Act & Share
In my religion we have a program to especially help the youth. It is called “Duty to God.” Youth are taught how they can serve God and how to be true Christians. As part of this Duty to God they are encouraged to Learn, Act and Share. There is much to be said about this program in relation to God, but the premises could very well apply to being an Entrepreneur.
Before becoming an entrepreneur you must LEARN a great deal about the product and service you are looking to get involved in. Is it a good product with some sustainability? The last thing you want is to start a business selling a product and have no demand for it. You get stuck with an inventory because the demand dried up too fast. Is it a product with a large or small public demand? If you customer pool is too small your business might not last because of the lack of customers. Are there multiple sources for you to buy the product? If you are only buying from one source and they quit selling to you product, you could be closed within days if not hours. Do you have the talents and skills to run a business? Look at yourself and be honest. Remember if you have the passion, you can learn and be taught most things about running a business. If you do not have the passion and drive to be an entrepreneur, that is OK for it is not for everyone. It is going to take a lot of work, so if you don’t have the passion to run your own business, don’t even try.
After you have LEARNED what you need to make a smart decision, then ACT. Too many people learn but never act. There are those that talk the talk and then there are those that walk the walk. Most of the time skeptical people have too much fear to act. The more information you can learn, the less fear you will have. But there gets to a point where you must act or nothing will ever happen. You will never get 100% of the information and if you think you need it, you will never pull the trigger on anything. I suggest once you have learned most of the important items about the business, make a decision and ACT. Be a doer and not a talker. If you never try, you will never succeed. Once you try, jump in with both feet and don’t look back, but only forward. Work hard and give great customer service and then work some more. Most businesses will not be an overnight success because it can take months or a few years. Once you become an Entrepreneur most will never go back working for someone else again.
The third part of this is SHARING. Once you are successful, reach out and help others. There are not many things more rewarding than sharing what you know and helping others succeed. Be part of the lives of those in need, either by being a mentor, trainer of small business start-ups or a financial contributor to organizations which encourage others to become entrepreneurs. Being able to share your knowledge or wealth is very rewarding personally. If you get help from a person, book, mentor or even a blog, you should “pay if forward”.
LEARN, ACT & SHARE are great principles to live by in church and it works very well for those looking to become entrepreneurs.
Before becoming an entrepreneur you must LEARN a great deal about the product and service you are looking to get involved in. Is it a good product with some sustainability? The last thing you want is to start a business selling a product and have no demand for it. You get stuck with an inventory because the demand dried up too fast. Is it a product with a large or small public demand? If you customer pool is too small your business might not last because of the lack of customers. Are there multiple sources for you to buy the product? If you are only buying from one source and they quit selling to you product, you could be closed within days if not hours. Do you have the talents and skills to run a business? Look at yourself and be honest. Remember if you have the passion, you can learn and be taught most things about running a business. If you do not have the passion and drive to be an entrepreneur, that is OK for it is not for everyone. It is going to take a lot of work, so if you don’t have the passion to run your own business, don’t even try.
After you have LEARNED what you need to make a smart decision, then ACT. Too many people learn but never act. There are those that talk the talk and then there are those that walk the walk. Most of the time skeptical people have too much fear to act. The more information you can learn, the less fear you will have. But there gets to a point where you must act or nothing will ever happen. You will never get 100% of the information and if you think you need it, you will never pull the trigger on anything. I suggest once you have learned most of the important items about the business, make a decision and ACT. Be a doer and not a talker. If you never try, you will never succeed. Once you try, jump in with both feet and don’t look back, but only forward. Work hard and give great customer service and then work some more. Most businesses will not be an overnight success because it can take months or a few years. Once you become an Entrepreneur most will never go back working for someone else again.
The third part of this is SHARING. Once you are successful, reach out and help others. There are not many things more rewarding than sharing what you know and helping others succeed. Be part of the lives of those in need, either by being a mentor, trainer of small business start-ups or a financial contributor to organizations which encourage others to become entrepreneurs. Being able to share your knowledge or wealth is very rewarding personally. If you get help from a person, book, mentor or even a blog, you should “pay if forward”.
LEARN, ACT & SHARE are great principles to live by in church and it works very well for those looking to become entrepreneurs.
Friday, August 19, 2011
Feeding the Entrepreneur
Most people don’t realize it but networking can be a key to owning a successful business in more ways than one. Entrepreneurs feed off other entrepreneurs. That is one of the reasons you find the most successful ones read self improvement articles and books about successful business owners. Their stories inspire.
If you are able to see how others have made themselves into winners, you will be able to see how you can make yourself a winner. If you believe, you can make it happen! If you do not doubt yourself, you can fulfill your goals and dreams.
Networking with other business owners and entrepreneurs will feed your soul. Not only is reading good books and stories important but talking with other successful people will help you grow into become one. We all have heard of the quote, “You are what you eat.” If you put in garbage, only garbage comes out. If you surround yourself with smart, successful people, you will become one.
If you want to become an entrepreneur, go to your local Chamber of Commerce meetings. Find the local Toastmaster, Dale Carnegie, Business Alliance groups, join and attend their meetings. Their excitement for business will rub off and you will find yourself in places you have in the past only dreaming about.
Success in anything takes work. It is NOT handed to you on a silver platter. If you want to become an entrepreneur, work at it and feed the “animal” good inspiring food.
About the only time you will see a true entrepreneur down is when they have not fed themselves the right food. Do not feed yourself garbage!
If you are able to see how others have made themselves into winners, you will be able to see how you can make yourself a winner. If you believe, you can make it happen! If you do not doubt yourself, you can fulfill your goals and dreams.
Networking with other business owners and entrepreneurs will feed your soul. Not only is reading good books and stories important but talking with other successful people will help you grow into become one. We all have heard of the quote, “You are what you eat.” If you put in garbage, only garbage comes out. If you surround yourself with smart, successful people, you will become one.
If you want to become an entrepreneur, go to your local Chamber of Commerce meetings. Find the local Toastmaster, Dale Carnegie, Business Alliance groups, join and attend their meetings. Their excitement for business will rub off and you will find yourself in places you have in the past only dreaming about.
Success in anything takes work. It is NOT handed to you on a silver platter. If you want to become an entrepreneur, work at it and feed the “animal” good inspiring food.
About the only time you will see a true entrepreneur down is when they have not fed themselves the right food. Do not feed yourself garbage!
Saturday, August 13, 2011
How can you get a SBA loan
Below is a test to see how much you might or might not know about SBA loan programs.
See how you do on this SBA (Small Business Association) Test
(True or False)
1. As you can imagine as with all government programs, there is a lot of red tape, paperwork, and time involved in obtaining an SBA loan especially compared to regular bank loans.
2. SBA loans are lower-interest than most normal business loans.
3. You must be turned down by a bank or credit union before you can obtain an SBA loan.
4. A SBA loan must be fully secured by collateral or it will be declined.
5. SBA business loans are designed to be longer term than traditional loans and do not allow “balloon” or other such call type features.
6. The term of the loan (length of the loan) is actually more important than the interest rate, especially concerning the impact on the cash flow of the business.
7. If I have an SBA loan, it guarantees my business will not fail.
8. Any bank or credit union can help me with an SBA loan.
Answers
1. False. Most SBA loans require about the same amount of paperwork as a regular bank loan. They will require collateral, good credit and probably personal guarantee’s, much the same as a regular bank loan. Banks like to give SBA loans because much of the loan amount is protected and if defaulted on will be repaid by the government.
2. False. Generally they are the same as regular bank or credit union loan interest rates. The SBA do not actually determine the interest rate on each loan and one particular program, the 504 loan program, offers a lower than market rate but many cannot qualify for this loan. Generally the interest rate will be the same or close to the normal rate charged by the bank or credit union.
3. False. Most SBA loans are just bank or credit union loans but are guaranteed by the SBA, therefore they must follow those standards set by the SBA.
4. False. Just like a regular bank or credit union loan, they do not need to be fully collateralized. Depending on the credit worthiness of the individual, 100% collateral aren’t always needed. If the finance company can get a person 100% of it collateralized, they will be happy to take it, but it isn’t always necessary.
5. True. There are stipulations on most SBA loans, so be aware of those stipulations and make sure you can live with them. Sometimes other non-SBA loans are better for a borrower.
6. True. Most of the time a borrower loan payment can be more important than the interest rate a person pays. A longer term of a loan can reduce the amount of the monthly payment and many times is a better deal. Cash flow for a business is very important to success or failure.
7. False. No one can or will guarantee the success or failure of a business. Having an SBA will give you some comfort because they require the bank and the borrower to follow proven steps in researching a business.
8. False. Only those financial institutions who have been approved by the SBA can give these type of loans.
See how you do on this SBA (Small Business Association) Test
(True or False)
1. As you can imagine as with all government programs, there is a lot of red tape, paperwork, and time involved in obtaining an SBA loan especially compared to regular bank loans.
2. SBA loans are lower-interest than most normal business loans.
3. You must be turned down by a bank or credit union before you can obtain an SBA loan.
4. A SBA loan must be fully secured by collateral or it will be declined.
5. SBA business loans are designed to be longer term than traditional loans and do not allow “balloon” or other such call type features.
6. The term of the loan (length of the loan) is actually more important than the interest rate, especially concerning the impact on the cash flow of the business.
7. If I have an SBA loan, it guarantees my business will not fail.
8. Any bank or credit union can help me with an SBA loan.
Answers
1. False. Most SBA loans require about the same amount of paperwork as a regular bank loan. They will require collateral, good credit and probably personal guarantee’s, much the same as a regular bank loan. Banks like to give SBA loans because much of the loan amount is protected and if defaulted on will be repaid by the government.
2. False. Generally they are the same as regular bank or credit union loan interest rates. The SBA do not actually determine the interest rate on each loan and one particular program, the 504 loan program, offers a lower than market rate but many cannot qualify for this loan. Generally the interest rate will be the same or close to the normal rate charged by the bank or credit union.
3. False. Most SBA loans are just bank or credit union loans but are guaranteed by the SBA, therefore they must follow those standards set by the SBA.
4. False. Just like a regular bank or credit union loan, they do not need to be fully collateralized. Depending on the credit worthiness of the individual, 100% collateral aren’t always needed. If the finance company can get a person 100% of it collateralized, they will be happy to take it, but it isn’t always necessary.
5. True. There are stipulations on most SBA loans, so be aware of those stipulations and make sure you can live with them. Sometimes other non-SBA loans are better for a borrower.
6. True. Most of the time a borrower loan payment can be more important than the interest rate a person pays. A longer term of a loan can reduce the amount of the monthly payment and many times is a better deal. Cash flow for a business is very important to success or failure.
7. False. No one can or will guarantee the success or failure of a business. Having an SBA will give you some comfort because they require the bank and the borrower to follow proven steps in researching a business.
8. False. Only those financial institutions who have been approved by the SBA can give these type of loans.
Wednesday, August 3, 2011
Are you Happy?
If you don’t like where you are at in life, try something new. The worst thing we can do to ourselves is live in a mundane existence. Whatever you do, be happy, for life is too short to do something you do not like. If it is your job, your education or the way you feel about yourself, if you don’t feel comfortable about who you are or where you are headed, change! It is never too late.
Almost every potential entrepreneur comes to a cross roads in their life. Do they stay the same or do they venture out and take a risk. The entrepreneur takes the risk. The successful risk taker, does their homework and then makes their decision. They know their chances of failure sky rocket if they do not do the research before taking the risk.
"The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try. Once you find something you love to do, be the best at doing it."
Debbi Fields, founder of Mrs. Fields Cookies
We can sit around and wish for something that is not here, or we can go out and find it. As Debbi says, “The greatest failure is not to try.”
As Steve Jobs said, “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
Most people will talk about it; the entrepreneur goes out and makes it happen.
Almost every potential entrepreneur comes to a cross roads in their life. Do they stay the same or do they venture out and take a risk. The entrepreneur takes the risk. The successful risk taker, does their homework and then makes their decision. They know their chances of failure sky rocket if they do not do the research before taking the risk.
"The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try. Once you find something you love to do, be the best at doing it."
Debbi Fields, founder of Mrs. Fields Cookies
We can sit around and wish for something that is not here, or we can go out and find it. As Debbi says, “The greatest failure is not to try.”
As Steve Jobs said, “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
Most people will talk about it; the entrepreneur goes out and makes it happen.
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