Think about this phrase… ==> Retail Pays the Bills!
Do you know what one of the most common factors contributing to new home business startup failures?
Cash flow…
As new entrepreneurs begin to build their new businesses there are investment costs.
These not only include the initial start-up costs, but also the costs of product inventories, advertising and other promotional costs, web hosting and other online marketing tools, and maybe even the cost of office or store front space.
These costs vary with the type of business, but every opportunity will have them.
Most new home business owners are working to build their opportunity part time while still working at their regular 9 to 5 job. Most do not have an investment
“nest egg” built up to fund their venture. Their new enterprise is not yet very profitable, so where does the cash come from to pay for these needed costs?
Usually from their home budget which is already stretched thin.
The fact is, most new home businesses don’t fail because the business does not work… they fail because the owner runs out of the cash needed to make it work.
A lot of home business opportunities offer substantial “retail” profit margins for their distributors. Examples of this model include Avon, Mary Kay, and Herbalife.
Another model you will see features “fast start bonuses” paid for generating new customers or distributors. These new product consumers might be placed on an “autoship” program which guarantees future orders. In that way, distributors are not having to “resell” their customer each month.
In this model, future profits are made as distributors qualify through their company’s compensation plan.
Operating without “retail profits” can be a “catch 22″… you can’t earn until you build a team… but you can’t build a team without the cash necessary to invest in your business.
Look for a business which offers the advantage of retail profits which give the business owner cash flow that can then be re-invested in their business to grow it even bigger AND faster.
In our next installment we will look at how recruiting builds the lifestyle.
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