Money & Career

Quiz: What kind of home business should you start?

By: Yuki Hayashi

Author: Canadian Living

Money & Career

Quiz: What kind of home business should you start?

By: Yuki Hayashi

Thinking of becoming your own boss? More and more Canadians are self-employed – nearly 2.7 million in 2010, according to Statistics Canada. What's more, the number of entrepreneurial women is growing too, now accounting for a full 35 per cent of self-employed Canadians.

Key benefits of starting your own business are the ability to set your own hours and the satisfaction of running your own business. But not all home businesses are the same. Wondering which of the most common types is best for you? Take our quiz.

1. Are you more creative or numbers-oriented?

Creative: Consider starting your own independent business.

Numbers-oriented: A franchise ownership or sales consultant gig is better.

2. Are you willing and able to invest five or six figures into your start-up?

Yes: Buying into a franchise or starting up certain independent businesses (stores or equipment-heavy services such as construction) can be pricey.

No: Start-up costs associated with becoming a sales consultant are minimal by comparison.

3. Are you planning to invest lots of time, effort and sweat equity into this project? Or are you looking for something more low-key and manageable in your weekend downtime?

High commitment: A franchise or independent business will keep you busy full-time – and then some.

Low commitment: Opt for a sales consultant gig. Their appeal is their flexible nature.

4. Are you an extrovert or introvert?

Extrovert:
Make the most of your outgoing personality as a sales consultant. Independent business owners benefit from networking, making this a good fit, too.

Introvert: With franchising, your introversion is less of an issue so long as you've got paid staff working with the public.


Page 1 of 2 Finish the quiz and discover what your choices say about the type of business that's best for you on page 2.
5. Are you willing to hire staff? (And take on the accounting issues this will create?)

Yes: The typical high-volume nature of franchise operations means staff are essential.
For independent businesses, staffing depends on the size of the operation. Staff may be hired temporarily, too: A wardrobe stylist who normally works on their own might hire someone to assist them on a big one-week photo shoot, for instance.

No: Sales consultants work for their own company and don't subcontract staff.

6. Do you prefer to work within existing frameworks and routines or to make your own rules?

Prefer existing systems: Franchising and sales consulting offer standard operating procedures set by a parent company.

Prefer self-determination: Independent business owners determine their own best-practices.

Results: Read up on the small business choice you selected most often.

Franchise: A franchise is essentially your very own clone of an existing chain. When you buy a Subway or Second Cup franchise, you're paying for the right to sell those amazing Veggie Delite subs or chai lattes in a specific "territory." You'll pay a franchise fee, royalties and other extras. And you have to follow the established business template as outlined in a franchise agreement, from signage to recipes to suppliers.

Your franchise taps into the brand recognition of a national chain. You benefit from the parent company's deep pockets when it comes to marketing and product development, whether it's a Super Bowl commercial or a muffin recipe that's been tweaked and tweaked again until test-kitchen pros and taste-testers deem it market-licious.

Independent business:
Whether you're a tax accountant, landscaper, magazine writer, house cleaner, café owner or online vendor of dog booties, if you work for yourself, you're owner of your own independent business. This gives you freedom and creative control to develop your own services and product offerings.

You may or may not need your own storefront or rental office, but a website and dedicated office space in your home are important. Creative types such as writers, photographers and stylists may want to consider joining an agency until you build your own repeat clients. The agency sends work your way, and handles client invoicing, in return for a cut of your fee.

Sales consultant: Catalogue sales, such as Avon cosmetics or Pampered Chef cookware, are ideal for those who don't want to work many hours. You can sell by planning dedicated home parties/shows, or by leaving catalogues with friends, family or in busy places such as your dentist's waiting room (if they permit it!).

Becoming a sales consultant costs you startup and monthly fees. You may have to pay for training, sales materials, participation on a company website and for a start-up kit of demo products. You may also have to meet minimum monthly sales quotas or buy your own product to keep your account active.

Most sales consultants are most successful when they sell products they're genuinely enthusiastic about to people in their own demographic (young moms, avid home cooks, etc). This helps customers relate and turns your home-based business into a social opportunity, too!


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Quiz: What kind of home business should you start?

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