Home Businesses

We love referring to America as the land of opportunity, and it is in many ways. But the opportunities here have shifted. Many people can no longer rely on committing themselves to one company their entire lives. Fortunately, for those who are willing to learn and apply themselves creatively and technically, the internet has blown open doors never before available to the average person for earning income -- from a little extra on the side to a full-time income, even on a large scale.

Unfortunately, many people think that the internet is a magic button for lazy cash, and they get sucked into hype and promises that fail as often online as they do offline. Doing the right thing in the right time and place work online or offline, and sometimes you can earn quite a lot of money almost from dumb luck. But if you think you can just go online and push a button to start making cash, I'd say the odds are stacked heavily against you making more than you waste in time and money.

If you're serious about making money with a home business, though, I'm glad to share my experiences here. My goal is to give you the kinds of tips that will help you find a legitimate opportunity for earning money while avoiding hype and scams.

First Things to Know

I talk a lot about building a home business online because I see it as the big, big opportunity for the average person. If you'll put in the time to learn, you can reach a lot of people without spending a lot of money, and I know this is key for most of us.

But whether you're building a business online or offline, the key is that you need to learn the principles of marketing. I define marketing in today's world as the ability to successfully build relationships and provide value in those relationships that others cannot or do not want to live without.

Constantly posting a sales pitch to Craig's List will only get you so far. Constantly trying to sell at all will only get you so far. It's not about pushing a sale. It's about developing relationships with others. If they are right for what you offer, they'll buy from you; if not, they may refer you to others when you've conveyed value in the right way.

This is marketing in concept. Then there is the practical side of it all. If you're working offline, this means building relationships by shaking hands and talking to people; maybe giving talks or demonstrations or being at relevant trade shows; it probably means having the right kind of marketing collateral.

Online, it means having a website that actually gets found in the search engines and then that converts sales because it has, again, conveyed value to someone and developed something of a relationship with them -- at the very least, it must build enough trust that they will give up an e-mail address (so you can talk to them over time) or pull out their wallets. It probably means developing a social presence on Facebook, Google+, and Twitter, or perhaps places like Pinterest, depending on your business.

In other words ... there is a lot to learn and a lot to do. It can be learned. It can be done. But not by the people who believe in buying into a program and pushing a button to make money jump into their bank account. It can be learned and done by the people who understand that they are starting a home business -- a real business that needs to be built and developed and nurtured, and that has real customers of some sort.

Because there is a learning and doing curve involved in building an income, I encourage people to start a home business on the side of a stable job (assuming you have one). Jumping in with both feet, as I did back in 2001, is risky and involves a huge commitment to learn and act quickly. And the big danger with that approach is that you might PUSH FOR SALES because you need a quick income, rather than letting relationships and sales develop.

There are many, many sources online where you can learn about building websites and marketing at absolutely no cost. Many of the tools for success are also free, or have free options. I encourage you to keep costs low in order to minimize risk and, again, to allow the business to develop organically around you. Of course it's helpful if you can commit some of your current income or savings toward the business, and the amounts needed depend on the kind of business you're getting into.

I'll point out that, if you partner with me in any sort of business mentioned here, I'm happy to act as your guide to the world of marketing. I won't run your business for you, but I'll gladly provide input and recommend tools any time you want help.

Some Tools

I may develop this further over time, but in the interest of sending you in the right direction to build a home business, I want you to know how you can easily build a website and collect e-mail addresses (and even automatically e-mail the people who join your list).

There are many options for building websites, and Wordpress is definitely the most popular. If you have complex website needs, this is possibly the way to go. But if you're an online rookie and want the easiest system possible, I highly encourage you to check out Weebly. There is a free option, with upgrades available, including the option for a pretty nice e-commerce platform. Everything is drag-and-drop simple, and you can add many third-party services (if needed) with their simple HTML widgets. (Don't let the term scare you -- it's easy to do.)

Weebly also has plenty of videos to show you how to use each feature. But if you've spent much time on computers, probably much of it will be intuitive.

As for collecting e-mails (you really want to do this to build a business, though I can't go into all the details here), there are a number of premium services with lots of bells and whistles.

In my opinion, the best of these is AWeber because it integrates with just about every other marketing tool and it's easy to make nice looking lead capture forms with it. BEWARE of other popular options if you want to do any sort of affiliate marketing or network marketing (both of which I discuss below) as their terms aren't friendly to these and you could lose whatever list you build.

Personally, though, I use RocketResponder. Why? Because it's simple, it has a clean user interface, and you can build unlimited lists and subscribers for just $20 per month. It's easy to make either text or HTML e-mails (with a drag-and-drop builder), and has a bunch of other features I love. It's missing a few things like surveys that other systems offer, but nothing I need. The only downside is that many tools don't know about RocketResponder and don't integrate with it, though they technically can if they will take the time.

So if you need every feature and integration possible, consider AWeber. Otherwise, RocketResponder may be perfect for you considering its steady cost as you grow your list.

Ok ... now that we have you online with a website and an e-mail list (that was easy!), let's take a look at kinds of online businesses.
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Freelancing

This is the first way I started earning money online. I had taught writing at a private high school and had worked on a newspaper for about a year. I knew I could help others with the written word, so I set up a website and started writing books and business materials for a living. After a while, speech writing became a heavy part of what I did.

While this sounds lovely, it involved the work I already described -- learning how to reach people online so that I could get myself hired in the first place. So as with any home business, if you want to freelance, you need to learn how to market yourself.

Of course there's a lot more you can do than writing. You just need some sort of skill that can be shared with other people over the internet ... even if you're physically mailing them the final result. Maybe you're an artist and you can take a photograph of someone to produce a painting or sketch. Maybe you're a musician who can write and perform a custom song for someone. Maybe you can edit videos or make custom jewelry or any of a million different things.

Freelancing online has become more of a challenge than it once was because now everyone is trying to do it, so the web's full of people who will work for almost nothing, making it tougher for real talent to be found. You need to decide if you want to work for very little and compete on price or whether you want to set yourself apart by being unique and then charging more. One earns by volume, the other by attracting fewer but higher-paying clients who appreciate quality.

If you're going the cheap route (charging low rates), you can set up profiles on sites like Freelancer.com or Fiverr.com. (You can also potentially offer some service that you can do very quickly and then earn pretty well on a site like Fiverr.) To stand out and charge more, you'll probably need to develop a quality site that establishes trust and then, by example (articles, videos, audios, press coverage, etc.), show your expertise.

Retailing Products

If you don't have a service you offer, maybe you make products. You can sell them on your own site, or through sites like Etsy.com. Research sites that cater to the right kind of audience for what you make, especially if it gives you a platform for selling or will sell for you on a partnership basis.

Other options for retailing include selling other people's products (this involves stocking and shipping product); selling products you have manufactured for you (sounds expensive, but you can "white label" products that already exist, and this can be done at reasonable costs); drop shipping other people's products (you focus on the selling and customer service, then pass along the orders to be shipped for you); and affiliate marketing, which I'll talk about in a later section.

If you can find the right relationships to do drop shipping, this can be an incredible business model. You need to set up a site for making sales, and you have to drive those sales. And you'll need to answer phones and/or emails as well as handling returns, etc. It's not a free ride. BUT ... you make the sale, which means you keep your customer list and can continue marketing to them. You buy and stock nothing. Your work is simply in referring sales and managing the customers. If you work with the right products, this can be lucrative without creating much risk (outside of the potential for returns).

Network Marketing (MLM)

Network Marketing (also known as Multi-Level Marketing, or MLM) is a business model where you're usually required to make some level of personal purchase from a business and then, as a member, you're able to share the product with others to earn commissions from those sales. The "Network" or "Multi-Level" portion of it comes in when those people become members and refer their own sales, and you earn a portion of their sales, and potentially the sales of many levels of referrals.

Whether you have a good or bad taste in your mouth for MLM, I encourage you to read on to consider both the pros and cons of this model. They should both be reflected on when you're thinking of a home business.

MLM Pros:
Network marketing is simply a business model that financially encourages its most passionate customers to spread the word about its products. In an ideal sense, this is a good concept -- word of mouth is perhaps the most powerful form of advertising, so the company invests in that as a primary marketing tool rather than investing in TV commercials, web ads, or whatever.

In its best form, MLM gives us the opportunity to have great products at reasonable retail prices (or even at bargain prices), to personally benefit from those, to share the benefits with other people and bring real value into their lives, and for actual customers -- the people who the business exists for -- to take part in the company's financial success, rather than ad agencies and other middlemen eating up that cash. Done right, this could be a positive business model to advance, because it rewards the right people within the life of the business.

Also, once someone buys from you as a customer or joins your team as a member, you benefit from all their future purchases. And with network marketing, you have the opportunity for extremely leveraged income. For instance, if you refer 3 people and they each refer 3 more, you're now earning from the purchases of 12 people, even though you only referred 3. Of course the leverage works differently in each business, and most of the members you refer will NOT do much if any recruiting or selling. The average person only refers 2-3 others, and many will drop out after a few months. So this leverage has exceptional potential, but in practice it's often hard to build and maintain. If you succeed in doing so, however, it can lead to really meaningful income.

There are people who refer to MLM as a "pyramid scheme," but if the products sold have value, then it's no more a pyramid scheme than the pyramid structure of a corporation, where people earn more as they move up the ranks. Only in MLM, this success is based on sales rather than the variety of ways people can move up a corporate ladder. Yes, there are so-called MLM companies who sell worthless products, like digital products that can be had for free. These are indeed thinly veiled Ponzi schemes. But just like any scam business, it shouldn't define the business model of MLM.

BUT ... read on about the cons of this business model and what you need to look for in an MLM before taking part.

MLM Cons:
Despite the potential of MLM, there are some things you definitely need to watch out for. I've done my best to give you an overview so you can stay safe if you decide to try earning money in this field.

1) Spreading the word about a company is supposed to be a benefit to them, and they're supposed to reward you for sales that you make. For some reason, though, most companies will charge you for becoming a member, and then will overcharge you more for things like replicated websites (identical to the corporate site, but coded with your link so you can get credit for a referral), which shouldn't cost the company much when spread out among many members. In general, I'm cautious about companies that charge me to be a member, or overcharge me for digital marketing materials. (If I want printed materials, there's a greater cost involved and that's a different story.)

2) Most network marketing companies charge way more for their products than a competitive product would cost in a retail setting in order to pay substantial commissions to members. This makes it difficult for you to sell product to other people who aren't interested in the business, and forces you to look for others who will overpay in order to have a business opportunity. But to me, that's not much of an opportunity. People won't stick around long when they realize how hard sales are, and this is why most MLM companies collapse before long.

I always recommend looking for a product that you know is a good value, that YOU feel good about buying even if you're not making any money with the business. This is a good litmus test as to whether you'll be able to sell to others. Frankly, I look for products that sell themselves so that my job is NEVER selling, but simply educating as people have questions. I would prefer smaller, reasonable commissions in order to make regular and recurring sales and build up an honest income that way, rather than building an artificially inflated income that won't last.

Note: A number of MLMs now sell online software services, and because these are digital they can be much more competitive while still leaving room for solid commissions.

3) Some companies require you to buy more product than you will use yourself -- at least as a starter package, if not ongoing. This is especially bad news if the products are overpriced and hard to sell. If it's an excellent product at a very competitive price, however, and if you get a deep enough wholesale discount, then this is similar to retailing any product and can be a legitimate source of income. Just be sure you want to turn around and face the challenge of retailing those products ... and recruiting others who want to face the same challenge. This could make it a hard program to pitch to other people.

4) Many companies have complex compensation plans, and it's hard to know how you'll earn income as a result. Mechanisms are built in so that you can accidentally "place" people on your team incorrectly and then not maximize your income. Or they hide where the money is really going. Etc.

I'm a big fan of simple pay plans, especially those that reward you heavily for the direct work you do (so your income doesn't rely on other people taking action) and then less heavily reward you for the work of your team, with the idea that you are also spending some time supporting them with answers to their questions, but you're not doing the majority of that work. And a cautionary tale: some of these companies will build a large membership and then change the compensation plan, drastically cutting pay for many members.

5) Many network marketers buy into hype, regurgitate hype, try to force their products or opportunity into any conversation (turning off friends, family, and anyone else), and are so desperate for a quick home run that they'll jump from company to company rather than trying to build one thing. As I mentioned earlier, if you're going to run a home business, I recommend that you treat it as a business. Know that it will take investments of time and money (although online, and with affiliate or network marketing, you can keep costs quite low), and plan on a 3-year timeline for building a meaningful or full-time income. It might happen much sooner, but if you think long-term, the way a true business owner should, you won't give up on the brink of success.

Affiliate Marketing

Affiliate marketing simply refers to your efforts to share a unique link with other people in order to refer a sale of products (digital products included). This is a way to start earning money from home with little or no financial risk and with no worries about stocking, shipping product, customer service, etc. You simply build content online (written, graphical, video, etc.) that includes your link.

Affiliate marketing has some benefits and drawbacks when compared with network marketing. First, you're rarely required to buy anything in order to make referrals. Second, since the products you're selling are also sold through traditional retail methods, pricing has to be competitive, making it easier for you to make a sale. Third, it doesn't have a negative reputation the way MLM does with many people. Major companies like Amazon run affiliate programs (which allows you to earn money from ANY product sold on Amazon!)

On the downside, when you make an affiliate sale, that person's account is almost NEVER associated with you permanently, and their future purchases will not yield you any income unless they use your link again before making their next purchase. Also, since you are not making the actual sale (you just refer them to the site where the sale is made), you are not building up any kind of list to continue selling to them. Since repeat sales are generally much easier to make than new sales (because you've established trust), this is definitely a downer. A good idea is to at least try getting people to sign up for your mailing list, where you'll keep them informed about the best deals in their areas of interest. Then when you refer them elsewhere, you still have their name to market to.

Again, you can sign up for Amazon's affiliate program for free (you'll earn about 4% or more on most sales), or find sellers of your favorite products (sometimes the actual manufacturer) and see if they offer affiliate programs. They're almost always free and give you some basic promotional tools.

This is a LOT to digest, I know. If you made it this far ... well you're crazy or a champion. But I hope this helps you with finding something that works well for you.
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My Recommended Program

At the moment, I'm intrigued by the potential of one company that combines the best of both MLM and affiliate marketing while eliminating everything I've seen as a problem in them. (Rolling out its product in late 2018, so it may be available when you read this.)

It is actually a simple, 3-level affiliate program with no cost to join promoting an "up to 5% cash back" credit card. No annual fees. Your only qualification to get paid in the program is to get the card and spend at least $250/month on it. Groceries, utilities, insurance payments ... whatever you would normally spend on another card, spend on this one instead. Then as you share it with others, you earn from their spending. Check it out.
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Join this Program