Business Services

PeterG · Guest

How important is the initial start-up cost (price point) of an online
or home based business opportunity? This is a very delicate subject
that is often not credited with enough significance. Hitting the
right "sweet spot" with start-up costs can literally make or break
your success in the online entrepreneurial world.

Call it what you want - "price point", "start-up cost", "price
threshold" (the initial fee to get registered and started in an online
opportunity), but it is crucial that this amount is not priced too
low, or too high.

TOO High Priced Business Opportunities
The problem with high ticket business opportunities are twofold: 1)
your field of prospects is radically reduced, and; 2) most newcomers
underestimate the additional costs of getting a business started.
Most people who join high ticket business opportunities ($2,000 to
$10,000) are not told about the high cost of making each sale (the
average cost of acquiring a new customer). Advertising is your most
significant ongoing investment. Online beginners hear that an
opportunity is... $3,500 (for example) and forget that this amount will
only get them started. What about advertising? What about ongoing
maintenance fees? (turn-key websites, accounting and training
services, etc.) For an opportunity with a flat start-up cost of
$3,500, your average cost per sale can range from $1,000 to $4,000.
Why you ask? Because, as mentioned above, businesses with higher
price points narrow your field of prospects dramatically, so you must
advertise more to adjust for the waste, or pay significantly higher
rates for upper income prospects. You would be shooting yourself in
the foot if you didn't expect to invest a minimum of $1,500 to $4,000
per sale to advertise it right. So you really need $5,000 to $7,500 to
start this business correctly. On top of that, if this business is a
2/up system (where you owe your sponsor your first two sales), you'll
need another $6,000 to $8,000 for these training sales. That's a
total of about $12,000 to $15,000 to get you started right. A
brilliant man once said that before you start anything, "count the
costs".

Bottom line, "High Ticket Home Business Opportunities" can be great if
you have a lot of money. Again, the problem is that most people do
not plan well enough in advance. In fact, they usually don't know
what they don't know to even ask the right questions.

Here's something else to consider - when you sell a program that
exceeds $1,000 for sign-up fees, you'll need to be good on the phone
(or be a fast learner) since most people will not invest much over
$1,000 without talking with someone.

TOO Low Priced Business Opportunities
The problem with business opportunities that cost $10 to $100 is that
they're just so difficult to turn into serious money. Let's compare
$10 to $100 price points. If you stand to earn $10 to $100 per sale,
you will invest the same amount of time, energy (and usually
advertising costs) to make 1/10 to 1/100 the amount of money. You'll
have to make ten to one hundred TIMES the number of sales to make the
same amount of money.

Most people don't realize that the cost of making a $15 sale is almost
as high as making a $500 sale. Especially when you consider one of
your best sources of advertising...Google. The average cost per click
for the "Business Opportunity" related category cost about $0.75 to
$1.50. You would have to sell one in 10 people who come to your site...
just to break even (with no net profit). There are free advertising
vehicles of course, but these require massive amounts of time and
oversight, which ultimately limit you quite a bit.

So what's the best price point you might ask? In my opinion, it's
somewhere between $300 to $1,000.

The article is brought to you by Peter Grundner at P&T Enterprises
For more information please visit www.myedconline.com or call
818-887-0896