Should You Pay to Join a Business Opportunity?

By Vishal P. Rao
Posted Friday, October 8, 2004

If you spend any time online, surfing the Internet, or even if you spend any time reading magazines that deal with business topics, you will more than likely run across countless business opportunity offerings.

Business opportunities are in essence, "turn-key" operations, where a major company, or even a smaller company, is offering what are basically franchises or memberships in the company. Any person that joins, becomes entitled to use the company name, company marketing materials, and of course, company reputation. It is therefore, an easy way for many who have no inclination to start their own business, or who have no ideas of their own, to start a home-based business.

There are, however, as in anything, "pitfalls" and "advantages" to joining any type of business opportunity. Many times, one of the "pitfalls" is the fact that there is a membership price to pay when joining, which depending upon the business opportunity, can be quite a staggering fee. It is wise, then, before paying any fees to join a business opportunity to research and ascertain the following aspects of the opportunity:

1. How long is the business opportunity "in business"? Longevity is important. You don't want to join a biz op that's "here today, gone tomorrow", taking your fees with it!

2. How do other members feel about the business opportunity? If you can speak with other members, this would help immensely in any decisions.

3. How much money overall can you expect to make from the business opportunity within the first month? You should at least be able to recover any fees you've spent within the first few months.

4. How many others belong to the business opportunity? Too much competition with other members will make it difficult to make sales, while too few members indicates that it is not a popular business opportunity, so how can it be sold?

5. How often will you be paid? Some only pay when an associate reaches a certain amount of revenue (which if you're a newbie will tie up your money quite conceivably for a while).

6. Are there any "undisclosed" extra fees, such as fees for checks or other payment methods? This will cut into net revenues.

7. Is there a money-back guarantee? If you don't succeed, will the business opportunity supply at least a partial refund?

8. Does the business opportunity supply mentors and marketing materials that can be used? It's easier to start and maintain a business opportunity with these components already in place.

9. How well known is the business opportunity? Whether it's online or offline, some business opportunities are "household" names and are easier to promote and sell as a result.

10. What is the turnover rate in the business opportunity? Those that have a large turnover rate among members are usually poor choices. Turnover means simply the number of members that leave the biz op within each month. A large turnover usually indicates that members are not happy with their experiences.

11. How much overall does it cost? You need to be able to comfortably afford the fee of the business opportunity, or you will start out "in the red" which is not a good way to start any home-based business.

12. How much control does the corporate entity have? If everything is controlled by the corporate entity (the "home" office of the business opportunity, so to speak), your creativity and the way you market may be hampered severely.

There are many business opportunities from which to pick. Everything from larger scale offline ventures, to smaller scale online ventures exists. Research into all the above is necessary when choosing an appropriate business opportunity. Fees are sometimes necessary to cover the costs of shipping and handling, or the costs of the marketing materials. Others charge fees simply because their "name" is important to them as they have spent years building their reputation, and they only want "serious joiners".

There also exist many free opportunities that cost nothing to join and can be a good way to experiment with marketing and the world of home-based business.

The choice of whether to pay or not is an individual choice that should only be made when weighing all possible factors. If in doubt, simply research and patiently wait a while. After all, the biz op will always be there tomorrow (if it's a good one)!

About the Author
Vishal P. Rao is the editor of Home Based Business Opportunities - A website dedicated to opportunities, ideas and resources for starting a home based business. He is also the owner of the Work at Home Forum - an online community of folks who work at home.