For example, if the business opportunity involves providing medical billing services, your likely consumers would be doctors and other healthcare providers. If you’re selling retail products, search online to figure out who buys those products most often. For example, if the opportunity involves selling “athleisure” apparel such as yoga pants, you could search the brand to see the types of people on social media who are wearing that type of clothing.
For example, if you’re looking at buying a restaurant franchise, you might ask how many people in your community ate that type of food and how often they ate it. You might also find out how many times per week they ate out or got take-out or delivery rather than cooking meals at home. What you find out from your conversations should give you a general idea if your business is likely to take hold in your area. If you determine that it’s not, you might want to start looking at different opportunities.
If you’re looking at an MLM opportunity, pay close attention to your friends and family, since they will likely be your first customers. If there are already a handful of people in your circles selling the same product or service, it’s probably a better idea for you to choose something else.
You might also look up the brand itself and see what’s being said about it in news and industry publications.
If the product or service isn’t something you’d use yourself, talk to people who would and get their impressions of it. For example, if you’re looking at a medical billing opportunity but you aren’t a healthcare provider, talk to someone who is.
Reviews can also help you manage expectations of the product or service if you do ultimately take advantage of the business opportunity. It’s just as important to know what the product can’t do as it is to know what it can.
You may have already learned some information about the company when you were doing your market analysis, but at this stage, you’re more interested in the reputation the company has for delivering a quality product and solid customer support. If the company has changed its branding, find out why. Often, when a company changes its branding, it’s to get away from bad publicity surrounding poor quality products or even a lawsuit.
For example, if you’re thinking about buying a franchise, you might stop by the locations of several other franchises to see how things operate. Simply observe for a few minutes before you ask to speak to the owner or reveal that you’re thinking about buying into the franchise yourself.
For example, if you want to start a medical billing business, you might need to buy a new computer or other electronic equipment before you can get set up. The person or company selling the business opportunity will tell you exactly how much you need to pay them. In addition to that, they’ll typically also tell you what other equipment, space, inventory, or other things you need to have in place before you can start. Some of these things you might already have, but others you’ll need to buy. Ask your local small business association what sort of licenses you’ll need to start your business. [11] X Research source Cities typically require you to have a business permit if you’re operating a brick-and-mortar store, but you might need one even if your business is completely online.
If you don’t have enough money available to invest immediately, figure out how much you’ll have to put aside each month to meet your goal. Even if you can’t start now, you might be able to swing it in a few months.
For example, if you’re looking at buying a franchise, you’ll likely be spending 60-80 hours a week at the business to get it off the ground before you ever see a profit. MLM opportunities, such as selling cosmetics or health products, typically don’t require much of a time investment. However, you’re unlikely to make a lot of money with these opportunities and may end up spending more than you make on products. [14] X Trustworthy Source Federal Trade Commission Website with up-to-date information for consumers from the Federal Trade Commisson Go to source
Try to create an initial budget that will cover the first 18 months of the business. [16] X Expert Source Helena RonisBusiness Advisor Expert Interview. 23 January 2019. Your local small business association likely has templates you can use for your budget and cost projections that will help you keep your information organized and make sure you don’t miss any important details.
In general, assume that you’ll be working for several months before you’ll start to turn a profit. Be wary of people selling business opportunities that claim you’ll be able to turn a profit in the first month or “quit your day job” after only a few weeks. People selling business opportunities typically show you “success stories. " Ask for statistics relating to the average person who invested in that particular business opportunity to get a better idea of how the opportunity could work for you.
If the seller of the business opportunity tries to rush you into making a decision or tells you that you don’t have to read the disclosure documents, consider this a red flag. Sellers of business opportunities usually won’t make any claims or guarantees about how much money you’ll make. But if they do, they have to provide additional documentation so you understand what the seller is basing those claims on.
If the company won’t release financial reports to you, that could be a red flag. Do some research on your own to see what you can find out about the company. Public documents available online often tell you a lot about a company’s stability. Have an accountant or business attorney look over the financial reports for you if you’re not comfortable analyzing these on your own. And even if you think you’ve got a pretty good handle on them, it still doesn’t hurt to get an expert opinion before you jump on the opportunity.
Many attorneys provide a free initial consultation. Beyond that, they’re often willing to look over contracts and paperwork and offer advice for a flat fee. It’s worth the cost for the peace of mind you’ll get knowing that you had someone in your corner looking out for you.
If you’re working with restricted products or services, you might also need to get additional licenses or permits that you wouldn’t need otherwise. An attorney can help you with this.
It’s relatively simple to set up and maintain an LLC. Although you can get an attorney to draft the paperwork for you, this usually isn’t necessary. Your state’s secretary of state likely has forms available online that you can download and fill out yourself.
