For most people, once they get a job, they see it as a long slog, going to work everyday to earn money, only to find they get a fairly poor pension when they retire. Usually this means that they sacrifice quality time each week working when they could be spending that time with their family or friends. Most people would love the opportunity to spend more time at home, but can’t seem to convince their employers to let them work from home. That is where home based businesses come into play.

How do they work?

Many home based business opportunities centre around a concept called “network marketing”. The idea behind this is that we recommend a product / service to our friends and family, who buy it, thereby making us money. Most of these schemes also have the option to build a team of other sellers, that you make money from each of their customers. The idea behind this, is that most people who go into network marketing aren’t really interested in building a big business, but would like to build a big enough passive or residual income stream that they can survive (pay the bills/mortgage) without really working too hard. From this point of view, leveraging your income on the back of other people’s efforts is a good way to build your passive income.

But can they make you rich?

Like any business model, there is no reason why any network marketing scheme can’t be hugely successful for the distributor. The schemes usually operate in large markets, and are usually for products/services that almost anyone would have a need to buy at some point. The main thing holding back the majority of the distributors in these schemes is the belief that they can do it, the marketing know how and the willingness to try.

What are the best schemes?

The best schemes are those that provide a true residual income. By this, I mean, products or services that are bought on a regular basis, thereby providing the distributor with repeat sales, and therefore residual income - sign up a customer once, get paid on it many times!

So go on, give us an example…

I have looked into a few network marketing schemes or home based business opportunities myself. Not because I was frustrated with the daily grind of going to work, as I am a self employed independent mortgage advisor, but simply to provide a 2nd income for myself and my fiancé. The ultimate goal is to have enough residual income by the time I was 30 to enable us to have children (if we are ready by then) without the worries of losing one income (my fiancé is also self employed so any time off costs, a lot!).

The first scheme that I really took a good look at was in the health business. They provide healthy shakes for people looking to lose weight and then maintain their weight loss. I thought it sounded interesting, I spent a few weeks investigating it, trying to figure if it was something I could see a way of doing in my spare time. I came to the conclusion that it wasn’t for me because ultimately I couldn’t see myself selling weight loss shakes. I can see that they do provide nutritious shakes that would help you lose weight and then keep it off, however, I believe that eating a balanced diet, with lots of fresh fruit and veg, and regular exercise is the best way to do that.

I’ve come across countless other web based home based business opportunities too. Many of them seem to be pyramid schemes, i.e., pay £1000 now to join, get 3 more people to join and get £2000 or something similar. Most of the schemes I’ve looked at seemed to skirt around the issue of what the business actually did, and focus on the money you would earn. This always makes me suspicious, as I don’t believe in ripping people off or earning money by conning people out of it - this might sound rich coming from a mortgage advisor but trust me, its true! I’m too honest

The only scheme that I’ve actually been convinced of enough to “buy into” has been the Utility Warehouse. I signed up as a customer at the beginning of May 2007, and I am happy to say that I no longer pay for my home phone calls, and I will be paying less for my gas and electricity as of June 2007. This is as a result of signing up as a customer of the Utility Warehouse.

Essentially Utility Warehouse is a utilities provider. They provide landline telephone, mobile phone, broadband, gas and electricity services to UK residential and business customers. They offer these services all on one monthly bill, and also free phone calls if you sign up for more than 3 services with them.

Once I had worked out with my distributor that by simply switching my gas, electricity, landline and mobile phone I would receive free phone calls from our landline, and a reduction in my monthly bills of around £30 a month I started to enquire about the business opportunity.

I was intrigued by it. I could see that it was a proposition no other utility company in the country could match. Why? Because none of the other gas/electricity suppliers offer free phone calls, therefore, even if they were slightly cheaper for their gas or electricity, by being a Utility Warehouse customer getting free phone calls, I would always be saving money. I knew this was such a simple concept that it would be so easy to sell. I could also see that this was a huge market. I went onto the Office for National Statistics website and worked out how many residential customers there were in the UK.

Its 25,000,000!

So I signed up! I am now a distributor for the Utility Warehouse, if you would like to sign up as a customer please visit www.piggybanksavings.co.uk.

This is a guest post written by Tristan Crickett who is an independent mortgage broker based in Bristol.

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