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How Much Will It Cost To Get Started In A Home Business?

Getting started in any business involves an investment. In a home-based business there are generally three areas of financial commitment you need to be prepared to make:

1) enrollment fees for joining your chosen company,

2) your initial start-up costs, and

3) monthly operating expenses.

Let’s start by putting the financial commitment in perspective. Take a comparison below comparing the financial commitment involved in starting a typical franchise business (in this case a McDonald’s franchise) and a typical work-from-home business.

What It Takes To Build A McDonald’s Franchise

* strong business acumen needed with experience building a business from the ground up
* 1-week training at McDonald’s University
* Hands-on management — you must run the restaurant yourself
*McDonald’s requires a 20-year agreement

***INTIAL START-UP COSTS: $905,200 – $1,746,000

What It Takes To Build A Home Business

* No business background needed; many successful home business owners only have high school diplomas and not business building skills
* Onging online, live conference training calls and one-on-one coaching as long as needed

* Work-at-home opportunity with successful mentoring team

* No long-term commitments; work just until your dreams come true

***INITIAL START- COSTS: $99 – $500+ (based on starting position)

McDonald’s Franchise: Additional Start-up Costs
* $45,000 franchise fee ($45,000 renewal fee after the required 20 years)

* 12.5% ongoing royalty fees

* $100,000 – $150,000 in miscellaneous start-up costs, such as miscellaneous equipment, inventory, accounts receivable, payroll and insurance

*** TOTAL ADDITIONAL START-UP COSTS: $145,000 – $195,000

Home Business: Additional Start-up Costs

* $200 – $450 for such things as merchant account, business cards, website, shopping cart, etc.
* Some companies pay up to 50 – 73% of world wide gross sales back to their distributors
* Some companies pay qualified members 5% royalties and 2% – 7% production bonuses


(Source for McDonald’s information is the McDonald’s corporate website.)

That’s pretty interesting, don’t you think?!?

Let me make a few additional comments on the three areas of financial commitment I mentioned earlier:

1. ENROLLMENT. Most companies will have some kind of enrollment cost in order to join the company. This can vary depending on the level at which you want to join.

One of the companies I’m with has a $65 level where someone can get started. This is affordable for almost everyone. When I recruit people to join my team at this level, my first goal is to help them put together a plan for moving up the company’s compensation plan.

They could start at a very affordable place and, if they executed the plan we put together, they could, over time, move to much higher levels of compensation!

2. INITIAL START-UP COSTS. Any business incurs these expenses. In the case of a home-based business these expenses involve getting yourself set up with key tools needed to run a business from home.

These can include such things as: a merchant account (so you can process credit cards), promotional flyers, business cards, additional office equipment, computer software, and various internet services.

3. MONTHLY OPERATING COSTS. The single most important monthly expense is your advertising budget. If you’re not advertising your business you won’t have a business! You need to decide on a monthly figure you can commit to EVERY SINGLE MONTH without fail.

This does not need to be a huge figure. I have people on my team who spend $50/month on their advertising, but they do it every month without fail. That $50 dollars is allowing them to build a powerful business.

Of course there will be other monthly operating expenses such as internet access fees, telephone, printing, postage, fax, and so on. These will obviously varying depending on the nature of your business.

All in all I think you would agree that this upfront financial commitment is pretty small. Many home business owners recoup their initial investment within the first couple of months of operating their business.

David Lazear, author, trainer and business coach, provides a wide range of training resources and services for small business and home business entrepreneurs.

Work From Home…OR Anywhere You Want to Be And CREATE TRUE FINANCIAL FREEDOM!