If you want to start a home based business you may want to achieve one of two main goals. The first would be to earn some extra cash, to fund a hobby or an extra holiday for example. You might have children that force you to remain at home. Alternatively you may wish to replace your main source of income with one that allows you to work from home.

In order to start home based business you may have a clear idea of what you want to do. In this case you need to seek advice about stock purchase, financing, business administration, cash management etc. However if you are unsure about what to do, you might be in the position of buying a business ready made. This means that you are searching for a business package that you are prepared to buy and start running successfully from the start.

Being in this position does mean that you have the task of searching the Internet, reading the newspapers and magazines and soaking up all the available potential business opportunities that are currently being advertised. This gives you a major problem – most if not all of the business opportunities that you may see for sale are seeking to make money from you! Some will have something valuable to sell and some most definitely will not. If you want to acquire and start a home based business you will need to run this gauntlet of ‘would be’ methods for earning easy money and learn how to spot the feasible options.

Before starting a home based business it would be advantageous to sift through as many ideas and opportunity advertisements as you can. Start narrowing down areas that you are interested in. For example you might want to work at home using your computer, and feel that network marketing and other business opportunities are not really for you. Now you can start to amass as much information about computer based working as you can. You will begin to see that that there are a few discrete areas within this field, such as selling over the Internet, Internet Marketing/Affiliate Marketing and the provision of consultancy services such as web design, accountancy and Resume writing to name a few.

Now you can begin to narrow your field down even more. Read some more detail about business start up packages that can be bought and start comparing what you get for your money from each of them. Once you have a business that appears to tick all the boxes of your requirements – now is the time to do some real work. Now you must carry out due diligence on the chosen business to ensure that you will not be throwing good money away on an idea that is either not suitable for you or plainly will not work at all.

Due diligence can be carried out alongside testing of an idea. If you are able to test the way a business will work at little cost or risk to yourself, then you will better be able to judge the likelihood of the business working on a larger scale in the future. Due diligence and testing will allow you to invest money and time into the business with confidence.

Unfortunately there is no simple answer to the question of how to identify sound business opportunities. For one thing, a business opportunity might be good in the hands of one person with certain skills and aspirations, but a disaster in the hands of another. However, this article is concerned with the general attributes of good business ideas compared with downright scams.

When you are looking for a business opportunity you need to do a lot of work. Unless you have an obvious passion for something, and see no alternative but to set up a shop or service serving that passion, you need to carry out extensive due diligence to see if a business is worth investing time and money into for a long time into the future.

The first thing to examine is how the business is being marketed. Is it a very hard sell? If so you have to look behind the marketing to see the bare bones of what is on offer. Promoters of a sound business idea will not be afraid to give you facts and details which you are free to check. Ignore the long list of comments and praise from previous customers – if the opportunity is one of mass appeal, such as Internet Marketing. Better to find independant viewpoints from real people who have been developing the particular business and ask some searching questions. Look behind the glamour and easy promises – try to find verifiable data and if you are unable to do so, steer clear!

So you are satisfied with the presentation and ethos of the business idea. You have determined that it is suitable for your needs – it may be part time, full time, scaleable etc. The next and most important step is to carry out some testing.

Testing a business opportunity

Any offer of the ideal money making opportunity that wants a significant payment up front, such as a franchise or Internet business offer, needs testing before you part with any real money. Promises of refunds if not completely satisfied are not enough. How then do you test a business without committing yourself. This does vary on the type of business – but here are some common methods:

• Internet Marketing – dont pay up front for a course. The best ones will want a monthly subscription and one month of committment is easy to bear. Try a system for a month and if you are happy you let it run.
• Franchises – the best franchises are always the ones that are clearly visible – on the high street, in Yellow Pages etc. A good franchise company will let you spend time at the outlets to get to know the business before committing.
• An established  business advertised in an estate agency or other online agent – this is the hardest, you cannot try out such a business before you buy and the seller is going to want to paint as rosy a picture as he can in order to sell to you. In this case you really need to take professional advice and hire an accountant to carry out proper due diligence once you have gleaned as much basic information as you can.
• Business Opportunities found on the Internet – generally. Unless you can find some way of backing up the offer, some way of finding word of mouth recommendation or reference to the idea in the “real world” you would be safer to back away. There are no easy ways to make money and any that do work with determination, investment and perseverance – can usually be seen to be working anyway.

So spotting a good business opportunity is not easy! Things always sound good when somebody wants to sell you something and a clever pitch is used. I would advise caution always, be a cynic and fear the worst. Try to get involved a bit at a time to reduce your financial risk and wherever possible accumulate as many independant views and opinions as possible. Please remember that I would be happy to supply the main areas to look out for, for any business idea – for nothing. The quid pro quo is that you let me add an article to Business Opportunity Market’s archive database!