Calling out bad, misleading advice on starting a company for under $100

Cruddy post making the rounds

There’s an article being passed around the internet right now, “101 Businesses You Can Start for $100.” I’m calling bull on that. Sure, there are some business opportunities that do not cost that much. You can purchase a kit from Avon, Tupperware, Pampered Chef, and others for very little out-of-pocket.

Now, let me ask you how long it takes to really earn a living? How many parties do you have to sell to make enough to quit your job? According to the Pampered Chef website, you make 20 percent commission. To earn $600 every week, you are going to have to sell $3,000. Weekly. Now, count how many hours of preparation and marketing and follow-up, as well as party-time that will take. If you’re working 40 hours a week, you’re making a mere $15 per hour.

Protect your assets

One of Entrepreneur.com’s suggestions is to start out as a handyman or doing lawn care. Sure, you can fix things for someone if you have the tools. Let me ask you what happens when you make a mistake and get sued? Or if you don’t make a mistake and get sued anyways?

The author says the only costs are advertising and marketing. NO. Get insurance to protect yourself. Any service you offer has the potential to backfire. Whether you’re taking care of the elderly, pets, kids, or someone else’s valuables, you need some kind of protection for yourself.

How much is your time worth anyways?

These kind of articles make me mad. The ideas completely ignore your time and energy. Do you really know how much time you’ll spend marketing to get that first sale? I’ve been writing for four years. I’ve had good clients and bad. I’ve had to go out and get these clients and market myself. The writing industry is tough. Everyone thinks they can write. And most businesses don’t want to pay good money for good writing.

Only about two-thirds of small businesses survive their first two years. According to the SBA, these figures are similar across many different industries.

Small businesses that are “part-time” are even harder to maintain. You have to be fully committed to your business. You have to be able to survive through different economies. You need training to manage your finances and taxes. If you don’t keep good books and records, you’re setting yourself up for failure.

Many of these businesses are started not out of a desire to fill a need, but out of desperation. If your product or service isn’t meeting the needs of your customers, you aren’t going to make money.

Don’t quit your day job

Don’t think that just because some entrepreneur says you can start a business for $100 means that you’ll succeed. Sure, for every 10 businesses that fail, two succeed. But at what price? Your time is worth something. There’s always a payoff.

#badbizadvice