This article concerns the question of how to pick an offline business opportunity. It is particularly relevant to those who are starting with very limited capital - say under $50,000. Those with more money that they can afford to risk have a lot more choices, and can generally afford professional advice. On the other hand if you are starting with only $5,000 or less, you need to be very careful in your choice of an entrepreneurial vehicle.



The Online Advantage

In general (with only one exception), I advise aspiring entrepreneurs, with under $2,000 to invest, to start an online business. Online it is possible to start a successful business with as little as $300. It isn't always easy, but it can be done. Offline businesses require substantial investment and therefore entail much greater risks. Online your overhead is minimal, you don't need employees, you don't require an inventory, you don't need to lease office or warehouse space, you don't need fancy furniture or expensive equipment, you can work from home, and your insurance costs are negligible.

Avoid the Franchise

For those who can afford it, and who want to establish a traditional (offline) business, a franchise can be a profitable investment. Suppose, for example, you find yourself attracted to a service business, like carpet cleaning. This is a very profitable industry. Virtually every residence and business in the world needs periodic carpet cleaning, and the demand is high regardless of the state of the economy.

So you check out what would be involved in buying a franchise from a successful company like Stanley Steemer. They have the know-how and the experience to help you get set up successfully.

For starters you would have to pay them a franchise fee of $20,000. Then you would need to invest and/or finance initial expenses of $100,000 to $216,000, depending on the options you select. Next SS would expect you to hire 16 employees. If you've ever had employees, you know what a headache that can be.

Finally, you would agree to pay SS a royalty of 7% of your revenues, and lock yourself in with a 20-year contract.

Why would anyone do this? Because, if you can afford to do so, it could be a very profitable venture.

Work From Home

So what should you look for if you want an offline business and have limited means (say $2,000 to $5,000) to get one launched?

For starters, you need to find a business that you can work from home with no employees. If successful and you want to expand your business, you can always rent an office and hire employees later on. Don't start out that way. You can't afford it. I mean no disrespect in saying this; it's just the reality of your circumstances.

Look for High Demand

Next, make sure the product or service that you intend to sell is in high demand. If it isn't, you are asking for trouble - serious trouble.

Is your list of candidate ventures getting shorter by the minute? Good! Good choices are scarce, at best; but don't give up.

Don't Stock Inventory

If you must sell tangible goods, make sure your suppliers will drop-ship them to your customers. Don't be tempted to turn your garage into a warehouse. What will you do with a garage-full of widgets if you find out later that you can't sell them? Ouch!

Keep a Low Profile in Your Neighborhood

If your home-based business brings traffic to your home, make sure you have ample parking available. Lacking this, your neighbors will make your life miserable with complaints to local authorities. In many circumstances they can actually put you out of business.

The same goes for putting up business signs. If your home isn't in a neighborhood zoned for business, the use of signage can be deadly to you. This can even apply to magnetic signage on your vehicle. If you are smart, your business will remain completely invisible to your neighbors.

Service is Good

Your best bet is to provide a much-needed service to residences and/or businesses within a ten mile radius of your home. For instance, if you have the skills, you could perform maintenance on computers in your area, or install copiers for a nearby company that sells (and delivers) such machines. Most home-based service delivery businesses (though not all) require a substantial amount of education or training. Look for those that don't. They do exist. I know at least one such business that you can learn in a day. Persevere!

About Profits

A final, but very important, consideration is the potential profitability of your offline venture. Don't take on a business that grosses less than $100 an hour. At $100 an hour, you can make $2,000 a week working half time. Would $8,000 a month as your own boss be a good deal for you? I know a business that meets all the above criteria and pays $150 an hour on average.

Don't settle for less than a superb deal. I am confident you will find a great one if you try.