Starting an online business from home is a growing trend. More and more people are flocking to the Internet to find ways to start a business from the comfort of their own homes. Of course starting an online business from home also has the added advantage of minimum overheads too, so I’m sure that helps!Due to the current economic climate there is also sometimes an air of desperation surrounding people who are trying to make their Internet business succeed and earn some much-needed extra cash. Now, some people will have a fairly smooth ride from nothing to online success, but others will get stung along the way. You see, with desperation comes mistakes.Here are my top three pitfalls to avoid when starting an online business from home.Starting an online business from home – Snare 1 – Scams. I don’t care who you are, if you are feeling pretty desperate in your attempts to build a business based on the Internet, then you are a prime target for scams. Don’t let your need for wanting to succeed online affect your judgement when faced with supposed business opportunities. A decent rule of thumb is the old cliché, if it sounds too good to be true, it probably is. Try to avoid any product or service promising too much in return for too little, especially if they seem over-hyped and ‘pushy’. I think you just need to be aware that scams do exist so do your research before investing any of your hard-earned or hard saved money. A good idea is to use forums so you can ask real people what their real experiences are with certain products or services.Starting an online business from home – Snare 2 – The next shiny object syndrome. This is when you decide to invest your money into a product or service to help you in starting an online business from home, then quickly see something else that takes your eye. Obviously you don’t want to miss out on a big opportunity, so you invest in that one too and start work on it. Maybe a few days or weeks later you stumble upon another great looking opportunity, so again, not wanting to miss out, you invest in that product or service and start working on that. This process gets repeated until you either run out of money, or decide that nothing works and Internet business is all useless.The process described above happens to a lot of people, so if it sounds like you don’t worry because it is easily fixable. Just pick one thing to focus on and see it the whole way through. Un-subscribe from all distracting email lists. Looking into getting an Internet Marketing Coach or Mentor will also ensure you stick to your word and stay on track.Starting an online business from home – Snare 3 – The get rich quick mentality. When first looking into starting an online business from home you are going to see a lot of sales pages and sales videos, good ones too. A lot of them do a good job in convincing you that if you decide to get involved in Internet Marketing and start an online business, then you will make a lot of money very quickly. The more of them you see the more you believe that in some weird way you are actually entitled to make a lot of money very quickly, and that’s how they get you.Now I’m not saying that you shouldn’t try to be successful quickly, go for it. But what these kind of get rich quick mentalities can breed, is a lot of irrational impatience towards your new business. For example, if you are not earning 10k a month after two or three months of starting up, then the business is no good and you need to look for something else that will. How crazy does that sound?My biggest tip to help you avoid these snares and become a success online is actually something that I have already mentioned. Finding a quality Internet Marketing Coach or Mentor can keep you grounded, focused and working hard on the tasks that will make your online business a success. If there is one thing I have learned in business and in life over the last 7 years, is no matter what you are trying to achieve, there will be somebody out there who has already done it. But more importantly they can show you how to do it in half the time, so starting an online business from home becomes a very achievable (and lucrative) goal.
Getting rich isn’t all about hard work. In fact hard work has got little to do with getting rich. It’s not that I don’t advocate hard work, I do. I love working hard but I especially like to see myself and others working smart. I know that getting rich and achieving success is not exclusively the domain of blood, sweat and tears. I’ve seen friends, work colleagues and family work themselves to the bone for little or no reward.The Cult of Hard Work, Self-Sacrifice and The Golden GooseThere is a cult of self-sacrifice evident in our culture that warrants you to be extra busy, working super hard, and putting in crazy hours. When it comes to personal wealth building and attaining success, you’re the golden goose. However, you can only push the golden goose so hard before he/she stops laying those golden eggs. Without exception every golden goose will eventually run out of energy, capacity or enthusiasm. Therefore, learning how to utilise Other Peoples Time, Money and Skills (i.e. leveraging) is a pre-requisite to becoming rich, building wealth and achieving success.Other Peoples Money & LeverageIn general terms, getting access to Other People’s Money (OPM) is a form of leverage that enables you to go beyond the limits of your own resources and instead apply resourcefulness to everything you do. In business terms, leverage is the key that differentiates self-employed person who owns a job from the business owner who own a business. In financial/investment terms it means getting access to cash that’s not yours in order to buy assets that you control and that produce income.What the Rich and Wealthy Have Know for YearsThe richest and especially the wealthiest people in the world have known about leveraging Other People’s Money for years. Everyone from Jean Paul Getty, Aristotle Onassis and Donald Trump have excelled at this wealth building principle numero uno. Their use of OPM to buys assets is legendary. Onassis in particular is known for having secured contracts to transport ore and oil in ships and tankers he didn’t yet own and then going to the banks securing the loans to buy the ships and tankers using the contracts. A brazen and gifted deal-maker if there ever was one!People go about building wealth or acquiring assets in different ways based on their background, past experiences and what they have been taught or know about money. For the most part people think of great riches and wealth as largely unattainable because of the model or mindset they have about money. What most people fail to understand is that you actually don’t need money to make money. Sure it helps but what you really need is access to Other People’s Money in order to make money.The Benefits of Utilising Other People’s MoneyOPM buys you time; it enables you do things before you would otherwise be able to do them. It allows you participate in deals your own resources don’t allow you to do. It enables you make choices you couldn’t otherwise make. It takes the average person many, many years to accumulate wealth or build a business entirely from their own resources. By utilising the power of Other People’s Money you can fast-track your personal wealth building or the growth of a business. Importantly, your personal wealth building is no longer limited to what you have been able to save and invest from your earned income.Getting High on OPM – Real EstateMost people’s typical first experience of using Other People’s Money is when they take on a mortgage to buy their home. Typically, their initial down-payment combined with their contract of employment that demonstrates their ability to produce future income is enough for them to secure a mortgage loan against home. Unfortunately your home is not an asset, well it is, but it’s the bank’s asset as they are making income from the loan advanced, not you. If you can get a bank to advance you a mortgage loan so as to purchase an investment rental property (an asset) whereby you get to retain what remains of the rental income after you pay the mortgage, then you have used Other People’s Money to buy and asset to produce income. In order to secure this loan you need to demonstrate to the bank that you are a safe bet. They will typically want to see that you have at least 20% of the purchase price as a down-payment and sufficient net income being generated by this asset and other sources to ride out any changes in interest rates, rental void periods etc.Getting High on OPM – BusinessIn business, entrepreneurs and business owners get access to Other People’s Money when they write a business plan which they present to a business agent or venture capitalist i.e. investors. This process is known as raising capital. In return for the money (known as capital) received the investor who provided the capital typically receives equity (i.e. shareholding) in the business. Money can also be borrowed from a bank and the bank is repaid the principal and also receives interest on the loan. It’s the business owner’s job to put this capital to good use; to produce products or services that generate sales revenue to pay back the loan and, of course, all the other expenditures of the business.Other People’s Money is always available and accessible to a greater or lesser extent depending on overall market conditions. Your first responsibility as an entrepreneur or investor seeking capital is to understand and inform yourself as to the multiple sources of OPM and numerous deal structures that utilize OPM.Jumping Through the Window of OpportunityFinally, the chief take-away from all this talk about Other People’s Money is that rather than saying to yourself “I can’t afford to start a business” or “I don’t have the money to invest in that deal” you now know there are no real excuses or limitations. Not that using Other People’s Money is without its pitfalls. Like every financial transaction there are inherent risks. Firstly, you are liable to repay the capital borrowed and generally provide an agreed additional return to the investor. However, that’s not up for discussion here. The key thing for now is to realize that you can always get access to Other People’s Money to enable you participate in deals and do things you previously thought weren’t possible. You can start jumping through the window of opportunity when it’s open…and as you begin implementing this principle of Other People’s Money into your business and personal wealth building endeavors you begin to realize its open all the time!