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Courting Premium Sales
Have you ever dreamed of selling your book to a large corporation? A sale that would register several thousand copies of non-returnable product on the book sale meter? What's that? You've never thought of it you say? Well, never fear! It's not too...
Credit Card Charge-Off - What Does It Mean And What Should You Do About It?
Have you been told by a creditor that your debt is about to "charge-off"? Did the bill collector make it sound like you will be ruined financially if you allow this catastrophe to happen? If you're behind on your bills, unable to keep up with...
Maximize Profits By Pricing Your Home Right!
Setting a price is probably THE most important decision you will make when selling your house. A solid pricing strategy will sell your house quickly and for the most money possible. The following will help you get set the RIGHT price: 1. Know...
Overwhelming Debt? Bankruptcy May Be Your Way Out, But Maybe Not
Things are bad, really bad. They have to be for you to be considering bankruptcy. It's true that bankruptcy can wipe away your debts, or most of them anyway. Taxes are exempt from bankruptcy protection. You can declare bankruptcy, but if a...
Small Business Loan Basics
Many people who wish to start their own business need an
injection of financial capital at the beginning of a business;
the main source of funding for entrepreneurs is business loans.
Let's take a look at what you should expect if you plan...
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Business Opportunities - Why Pre-Packaged BizOpps are Not Worth the Money
Pick up any "business opportunity" magazine at the local
newsstand, and you'll see a glossy, attractive publication
designed to attract people who are actively seeking ways to earn
extra money, buy a franchise, or open a business of their own.
After all, it's the American Dream to own your own business and
get rich, right?
You've probably heard the old saying, "Most people are too busy
earning a living to make any money." Common sense tells us that
we're not going to get rich working for someone else (with the
possible exception of the lucky folks who started with Microsoft
or Google in their early days and got rich through stock
options). The average American employee lives from paycheck to
paycheck, with barely enough income to cover living expenses,
leaving nothing for investment toward building wealth for a
comfortable retirement. Hence the allure of the "Business
Opportunity."
As you flip through one of these "BizOpp" magazines, you'll see
a wide variety of advertisements for different types of
businesses, ranging from simple "starter kits" for around $29
all the way to sophisticated franchises costing $100,000 or
more. For most people, it's impossible to raise enough capital
to consider opening a true franchise. The franchise fees alone
are often prohibitive, running into tens of thousands of dollars
even for the lesser known businesses, or several hundred
thousand dollars for better known companies. And that's not even
including the outlay required to actually open the doors for
business.
At the other end of the scale, most people are aware that the
cheap starter kits and "business in a box" packages are
basically junk. But that leaves a whole host of medium-priced
business startup concepts, ranging in price from around $500 on
the low end to $10,000 on the upper end. I refer to these as
"pre-packaged business opportunities."
To explain why pre-packaged businesses are usually a waste of
time and money, I'll use windshield repair as an example. As I
write this, I'm looking at an ad for a training program that
costs $3,000, including starter materials. In case you don't
know what I'm referring to here, the basic idea is that small
chips, cracks, or holes in automobile windshields can be
repaired using a special liquid material that seals and repairs
defects. This is obviously much cheaper than replacing an entire
windshield. Hence the "opportunity" to start a business that
helps people save money on their windshield repairs.
Now, in case you're thinking, "There's no way I would want to be
in that business," please bear in mind that I'm just using this
as an example out of hundreds of possible different business
concepts advertised in the same fashion. And of course there are
many people who would be attracted to such a "business
opportunity" -- people who really like cars, people who already
know quite a bit about auto repair, and so on. Plenty of
individuals are attracted to a business idea like this, which is
why this particular "opportunity" has been around for decades.
Now, here's the real question. Can you seriously expect to shell
out $3,000 for some starter materials and training in the
windshield repair business, then put a sign out, and expect to
start earning money right away? Of course not! This is the #1
flaw with pre-packaged business opportunities: you still have to
figure out how to market the product or service on your own.
Let's take a closer look at the windshield repair business.
Let's say your goal is to make $50,000 per year in net income.
If we assume that you can charge around $50 per windshield
repair,
at a material cost of around $10, then you have a gross
profit (not counting your labor) of $40 per repair. To make
$50,000 net, you'd need to find 1,250 windshields per year that
required fixing. That translates to more than 100 repairs per
month, and you'd need to keep this up month in and month out to
meet your income goal. That works out to 3-5 repairs per day,
depending on how many days per month you work.
Now, if you had 1,250 cars lined up down the road, all ready for
the repair work, it would be nice easy money, right? But FINDING
those 1,250 cars and then SELLING those 1,250 car owners on your
service will be the real problem. In other words, you don't
really have a windshield repair job here. You have a SALES job,
pure and simple. Most of your time will be spent finding
business. Obviously, finding one car at a time will be totally
impractical. Instead, you'll need fleet accounts with major car
dealerships, auto repair shops, car rental agencies, and so on.
And you can bet that a number of other people (some of whom
bought the same pre-packaged business that you did) have also
solicited the same companies for their windshield repair
business.
So again, what you really have here is a sales job. If this were
a truly profitable business, then the company selling you the
"opportunity" would not be making all their money selling
pre-packaged businesses to people like yourself. Instead, they
would be making their money by rolling out the service across
the country and selling windshield repair directly to fleet
accounts on a nationwide basis. But they know that there is
actually more money to be made in the BizOpp world, preying on
people who have the dream of starting their own business.
The message here is that any pre-packaged business opportunity
that sells in the $500 to $10,000 range is typically worthless
and a complete waste of your time and money. Please bear in mind
that these numbers are just a guideline, and you must always
exercise good judgment when evaluating any business opportunity.
Just because a "hot" pre-packaged opportunity is selling for
more than $10,000 does not mean that it is necessarily
legitimate. Many rip-offs cost a lot more than that. But
generally speaking, the promoters of these schemes realize they
are aiming at people who can't pay a lot of money to get started
in business. So the packages are marketed in a way that will
maximize the number of people that can afford to buy in.
If you are serious about starting your own business, then a
pre-packaged opportunity is not the way to go. It might seem
like an easy answer to your problem, but the very fact that it's
being sold as a packaged business probably means that there's no
real money to be made without a long hard sales grind. You're
much better off doing your own research, coming up with your own
business ideas, and then testing your ideas with small
advertisements to see if your concepts have any real potential.
That's how many businesses get their start. You'll have a much
better chance of making it in the world of business or
self-employment if you ignore those BizOpp magazines entirely!
About the author:
Charles J. Phelan has been helping consumers become debt-free
without bankruptcy since 1997. A former sr. executive with one
of the nation's largest debt settlement firms, he is the author
of the Debt Elimination Success Seminar™, a five-hour audio-CD
course that teaches consumers how to choose between debt program
options based on their financial situation. The course focuses
on instruction in do-it-yourself debt negotiation. Visit
www.zipdebt.com
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| :: Negotiations Affairs Department :: |
| Information on the issues, history, developments and positions regarding Palestinian-Israeli peace negotiations. |
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