Copyright 2005 Roger Staubus|
This article rates a home business opportunity using my "New Approach for Rating Home Business Opportunities," of 11 major and 7 minor attributes. Each major attribute can be worth 7 points, while each minor attribute can be worth 3 points, with 98 points as a perfect score. Of course, there are no perfect scores for home business opportunities. The 11 major attributes are-
* Product or service
* Product price and market competition
* Proven business system
* Available Support system
* Available training and resources
* Compensation system
* Profitability - has good profit margins
* Costs involved - both startup and recurring costs
* Will I have full control over my business?
* Can I work this business at my own pace?
The 7 minor attributes are-
* How is the product delivered to the customer?
* Does the product/service have an automated delivery capability?
* Is the Company "On the Net" and E-Commerce enabled?
* Are you supplied with business tools to make your life easier?
* What level of administration is required?
* Consider whether you will be ahead of or behind the trends?
* How great is the potential to make money in this business?
The Company is Sensaria, a Washington state private company that sells Natural Body Care products. The product line includes Skin Care, Body Care, Sun Care, Home Care, and Hair Care products, all of which are sold by individual representatives. There are about 3,600 representatives. The Skin Care and Hair Care products (not makeup) are naturally based with no chemicals, which many people prefer, are consumable and representatives have personal web sites which customers may go to for repeat product purchases. Sensaria is a member of the Direct Selling Organization, which is a significant consideration. The company is about 20 years old, but has been using direct sales for the last five years.
Representatives schedule and hold Spa Parties where products are sampled and introduced, used and sold. The parties are fun events for women and those in attendance have a good time. Representatives plan for product sales, to book additional parties with those in attendance, and to recruit new representatives for the company, with individuals seeking to earn additional income. The cost to become a representative is $180, and another $50 for items that representatives use at Spa parties and for office supplies. Even though each representative has a personal web site for product re-orders, this business opportunity is an offline opportunity, as compared to an online internet business opportunity.
Eleven Major Attributes
* Products are very well received. Women love these products and purchase them eagerly. Samples used at the Spa parties are very effective in producing product sales. This major attribute is the crucially important one for this home-based opportunity. Because the products are consumable, this is a very favorable situation for a representative. This attribute gets a 7 rating.
* Product pricing is competitive in the market place and market competition is moderate. In this instance, a 5 is awarded for this attribute.
* The company is well respected, stable, and can be counted on to deliver on promises made. So this consideration gets a 7 rating.
* Proven business system. Sensaria has a very effective business system for beginning reps that includes getting Spa parties scheduled, presentations for the party, securing bookings for additional parties at each party, and prospecting for potential new representatives. Free products provide good motivation for individuals agreeing to host a party. After a Spa party, each rep has a business suite installed on their personal computer which allows the rep to transmit the orders to the company for efficient order processing. This consideration gets a 7 rating.
* The available support system is generally good, as each new rep has an upline person for questions and problems that may arise. This consideration gets a 5 rating.
* Available training and support is good for this company. New reps attend teleclasses to learn the ropes as beginning home-business entrepreneurs. Teleclasses are one hour in length and about 50 individuals may be involved in each call. More experienced representatives conduct these teleclasses.
This consideration gets a 6 rating.
* The Compensation system is a good one. Each rep earns 30% of the product sales value for each party, and has the chance for bonus amounts each month based on their total product sales. These bonus amounts vary from 6% to 9% of product sales for the month. In addition, a rep earns a 5% override for any reps they have recruited. After 3 recruits, the overrides go four levels deep. For any checks received at the parties, the rep deposits them to her bank account, and remits 70% of the sales value to the company via credit card payments. So rep earnings accumulate quickly during each month, and are available immediately. This consideration gets a 6 rating.
* Costs involved are $180 for the beginning product kit, and approximately $50 for supplies, most of which can be purchased at low-cost at Wal-Mart. The rep will have travel costs to and from each Spa party, and office supplies will be needed for record keeping purchases.
* Will I have full control over my business? The answer here is an unequivocal yes. There are no monthly sales quotas, but purchases of $75 wholesale are necessary to remain active. A rep can go inactive periodically without penalties. This attribute gets a 6 rating.
* Can I work this business at my own pace? The answer is yes, and this attribute gets a 6 rating.
Seven Minor Attributes
* How is the product delivered? The products sold at a Spa party are shipped to the hostess for that party and she delivers the products to customers who purchased. This consideration gets a 2 rating.
* Does the product/service have an automated delivery capability? Not in the sense that e-Books and software can be delivered immediately as downloads after purchase. Each rep has a web site for customer re-orders and they are shipped to their home address. This consideration gets a 2 rating.
* Is the company "On the Net" and E-Commerce enabled? Yes, this consideration gets a 3 rating.
* Are you supplied with business tools to make your life easier? Yes, each rep gets a business suite for submitting orders and other tools as well. This attribute gets a 2 rating.
* What level of administration is required? Keeping customer records, party records, contact records are required for a rep to be effective, and to earn as much as possible. This attribute gets a 2.
* Consider whether you will be ahead of or behind the trends. I don't know the answer for this one, so I am not assigning any number for this consideration.
* How great is the potential to make money in this business? It has very good potential, a new rep can earn from $800 to $1,000 in their first month. Downlines can be willed to family heirs. This attribute gets a 3 rating.
The Company has scored a total of 66 points on the 11 major attributes, and 14 points for the 7 minor attributes, yielding a grand total score of 80. This rating approach requires a 90+ for an Excellent rating, 70+ for a Good rating, 50+ for an Average rating, 30+ for a Poor rating, with zip for an opportunity considered to be a scam. Based on this approach, this is a GOOD home business opportunity.
About the author:
Roger Staubus CPA
Author of the Free e-Book "Looking for a Good Home Biz?" and of a previous published article, "New Approach for Rating Home Biz Opportunities."
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