Monday, September 14, 2009

What kind of business do you want to start?

Millions of workers are quietly toiling in their cubicles and dream of breaking free from corporate culture. Almost a quarter of full-time or part-time working Americans have considered leaving a job to become self-employed, according to a USA TODAY /Gallup Poll taken in July.
Many others don't want to ditch their day jobs but want to dabble in side projects to earn extra dough. Still others need to restart their careers after being laid off.

No matter what type of entrepreneurial venture someone undertakes, experts agree that an essential initial step is to research the industry, product or service offered, expected duties and the potential customer base. "Many businesses that open often have not prepared well enough, and they don't understand the challenges," says Ken Yancey, CEO of nonprofit entrepreneur mentoring group Score.

To help would-be entrepreneurs get started, USA TODAY has outlined some of the more popular types of businesses that people start, as well as their pros and cons.

Direct sales

Face-to-face is key. Cosmetics, cutlery, vitamins — even racy adult novelties — fall in here. Most sales in these businesses come from face-to-face interactions such as in-home demonstrations or parties showcasing wares.

In the U.S., about 15 million people do direct sales, with the majority working part time, according to the Direct Selling Association. Many think of women when it comes to this job. But 14 percent of direct sellers were men in 2008.

Pros. Initial costs typically aren't high. Hours are so flexible that many people tap into direct sales as second jobs. Successful salespeople can earn six-figure incomes, with commissions usually pegged at 25 percent to 50 percent of a product's retail price.

Cons. Some firms have hidden costs or operate illegal Ponzi schemes. DSA's website,, has information on how to avoid scams. While earning potential varies by company and sales ability, DSA says the median annual income for those in direct sales is $2,400.

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