Perhaps you are a small business person, and you are like me; when you hear a politician tell us they are for us little guys, you just cringe. It appears to me after decades of watching their lips move that they could care less about us, and would rather continue to get their campaign war chests filled by their large corporate lobbyist piggy banks. Okay, let’s talk.You see, there was an interesting article in Reuters on February 1, 2016 titled; “U.S. small business borrowing sank in 2015: PayNet,” by Ann Saphir. The article stated:”What started as a full gallop in 2015 is barely trotting along now, said Bill Phelan, President of PayNet; “We are barely replacing worn-out assets here.” Small Company borrowing is a key barometer of growth because it is the little firms that tend to do much of the hiring that fuels economic growth. Lending slowed sharply to small businesses in mining and agriculture, as well as in wholesale trade, transportation and construction, the figures showed. Texas was particularly hard hit.”So, what’s the Obama Administration’s answer to this vexing problem, oh something typical of the way they run things and adjust their economic data (like employment figures) just change the definition of “Small Business” for instance there was an article in Government Executive online news on January 29, 2016 titled; “SBA Finalizes New Business Size Standards,” written by Charles S. Clark which stated:”The new size standards will enable nearly 1,650 more businesses in those industries to obtain or retain small company status; will give federal agencies a larger pool of smaller companies from which to choose for their procurement programs; and will make more small businesses eligible for SBA’s loan programs,” SBA said in a release.”Okay but, smaller companies do not want to borrow money, why? They don’t trust the system, the future, the economy, this administration, or future regulations due to a socialist population base mindset and evil-one percent hatred motif, nor would I as a former franchisor. This new size standard change would include businesses over 150 employees and the “SBA estimates that more than 8,400 additional businesses will gain small business status under the adjusted size standards and become eligible for SBA’s financial and federal government procurement programs,” the agency said. “These changes can possibly lead to $150 million to $200 million in additional federal contracts and 80 additional loans, totaling about $30 million, to small businesses.”Great news right, well not so fast. You see, these larger firms will get Federal Contracts that small businesses, real ones cannot get, meaning fewer mom and pop businesses getting money from the Federal Government in our ever increasing government-run economy, not free-market run economy. This is no solution, this is just stupidity worsening the real problem is search of political expediency. Please consider all this and think on it.

What do most people lack, becoming the number one reason many home-based businesses fail? Customers.

My rule number one? Never buy leads, and only buy customers.

This is only one of five topics discussed here so that your home-based business can achieve optimal success.

First, I would like to list the top five reasons most home-based businesses fail:

1. Lack of a business plan.

Just because it is a home-based business does not mean you do not need a business plan. You should be taking your home-based business just as seriously as if you were heading into any other type of business, so you need to make sure that the business plan you have is sound and that it has already worked for someone else who has used it.

2. Lack of motivation.

It is easy to become distracted. A home business should be run in the same manner as an office-based business. You need to motivate yourself to go to work in the morning and maintain that motivation during the course of the day in order to succeed. Discipline is a must. I have witnessed many smart people who are totally capable of being successful in their own home-based business, but failed because they didn’t have the discipline and motivation to answer to themselves. Some personalities require direction and management from others in order to be successful, so it is important to know if you properly motivated before starting your own home-based business.

3. Lack of space or proper environment.

If you are fortunate and your home-based business is successful, you may need to expand, so it is important while setting up a home business environment to anticipate growth. Not all businesses can realistically succeed in a home-based location because they need room for equipment, work space, storage, inventory, and employees, so it is important to determine if it is simply too difficult to run your business from your home. Many people learn the hard way by not being realistic upfront.

4. Ignoring a budget.

Too many home-based business owners justify spending money on all sorts of equipment, advertising, leads, and promotional tools because they are not paying overhead. This can result in dangerous overspending which will strip your business of capital needed to succeed and thrive. It is important to spend money wisely on only what is necessary to see growth and success, and not get caught up in unnecessary spending.

5. Lack of customers.

This is quite obvious, of course. Without customers purchasing your products or services, you have no home business. This is the number one reason many home businesses fail because this is what most people lack when starting a business. Of course, there are companies that offer leads or you can go to a third-party source to purchase them, but if you talk to people who have used leads, they are usually a far cry from a constant stream of actual buying customers who could be supplying your home-based business with what it takes to thrive, grow, and become successful: sales.

So, what is a home-based business owner to do to avoid these pitfalls?

1. First, align yourself with a company that will provide you with a steady stream of buying customers to whom you have permanent rights, instead of mere leads.

With customers who are already purchasing being continually generated by the company itself, success will be attained and will continually grow and thrive because you will have all the customers you will ever need. With this, the front-end work of your business is already achieved. However, I know of only one company that does this.

2. Next, make sure this company is debt-free, reputable, and has a proven business model.

This company should have no start-up costs, no hidden fees, and be free to join. You want to avoid a business that starts strong and disappoints later, and instead opt for one that provides ongoing residual income for life. Talk to someone who is already working this business and see how it has worked for him or her.

3. Then, make sure you have the proper environment to work your business from home.

Align yourself with a company that will simply require an internet connection and a phone, and will allow you to be mobile, so you can take your home-based business anywhere you want to go. This company should do all of the back-end work for you as well by supplying you with your own free website and an easy to use back office on your laptop. They should be shipping the product to each customer, and supplying them with catalogs, e-mail alerts, monthly magazines and catalogs, and toll-free telephone customer support, all at no cost to you or the customer. Align yourself with a company that is willing to do all of this heavy lifting for you at no charge that normally weighs others down in their home-based businesses.

4. Next, stick to a budget by duplicating what someone else has already done to become successful in this business.

Resist temptation to reinvent the wheel which could result in needless spending. A great company has affiliates who have already figured out how to bring your business to the next level without spending needlessly, so just follow their lead.

5. Finally, make sure you are motivated to be in business for yourself in a home-based business.

Expect guidance from others, and duplicate what they have already done to be successful, but realize that the bottom line is YOU. If you treat a home-based business like a hobby, it will pay you like a hobby; and if you treat it like a business, it will pay you like a business. Treat it with the commitment and dedication it deserves and it will pay you back many times over.

How do I know this works? I have proven to myself that it does.

The successful interior design business I owned and operated for eleven years took a hard hit when our economy started to fail a few years ago because people no longer had the disposable income they once had. Let’s face it, custom design is neither inexpensive nor a necessity, so I have seen a lot of interior design studios go out of business during this tough economy. I had the choice of either reinventing myself in a home-based business, or go to work for someone else. Being my own boss has rather spoiled me, so I did not want to change that by working for someone else. Why make someone else successful when I could build something for myself?

So, almost three years ago, I aligned myself with a company to start another stream of income. This business is exactly what I described in the five detailed points above as what you should look for in a home-based business. I duplicated what someone else was already doing with the company, so naturally, it worked for me as well. I want to reach out to others to help them to build a successful home-based business of their own, by avoiding the common mistakes people often make. People who are already aligned with this company include individuals with corporate jobs, business owners, parents raising children at home, wellness professionals and students, retired persons, and individuals who simply desire an extra stream of income. There is no better time than in today’s tough economy to start your own proven home-based business by acquiring buying customers, and do it in a way where you will find optimal success.

Estimating your assets value:

Typically, one of the first questions a business owner will ask me is, “how much will the assets bring at an auction”. After taking the time to review the assets, the auctioneer should give the client a conservative estimate of the sale based upon his experience and the current market trends. It is important that the company give realistic expectations so the seller can make informed decisions based on their best interest.

Compensation and Expenses:

Is the company you are considering working for you or against you? The agreement you decide may determine this.

A business owner should carefully consider how the auction company is compensated. The most common commission structures include: straight commission, outright purchase of assets, guaranteed base with a split above to both auctioneer and seller, guaranteed base with anything above going to auctioneer or a flat fee structure.

In a straight commission structure, the company is paid an agreed upon percentage of the total sale.

In an outright purchase agreement, the auctioneer simply becomes your end buyer. The company purchases your assets and relocates them. While this can be an option in some unique situations, keep in mind that they will want to purchase your assets at a very reduced price to make a profit at a later date.

In a minimum base guarantee, the auction company guarantees the seller that the auction will generate a minimum amount of sales. Anything above that amount either goes to the auction company or split with the seller. While a seller might feel more comfortable doing an auction knowing that he is guaranteed a minimum amount for his sale, keep in mind that it is the best interest of the auction company to secure a minimum base price as low as possible in order reduce their financial liability to the seller and secure higher compensation for the sale.

In a flat fee structure, the auctioneer agrees to show up for the sale and call the auction. There is no incentive for the auctioneer to get the best prices for your assets. The auction company is compensated regardless of the outcome of your sale.

What is the best option for business owners? In my experience, an agreed upon straight commission structure. This puts the responsibility on the auction company to offer the best outcome for everyone involved. There is an incentive for the auction company to work hard for both parties, set up and run a professional sale, get the highest bid and sell every item on the inventory. Successful auctions translate to a higher bottom line for both the seller and the auction company.

Auction Expenses:

In most auction agreements the expenses to conduct an auction are passed to the seller. If the auction company pays for the expenses, it is simply absorbed in higher commission rates.

All expenses should be agreed upon in advance in a written contract. Typical expenses will include the costs of advertising, labor, legal fees, travel, equipment rentals, security, postage and printing. A reputable auction company will be able to estimate all expenses based upon their experience in previous auctions. An agreement should be actual costs charged as expenses, not an estimated amount.

Advertising is typically the highest cost in conducting an auction. The auction company needs to set up an advertising campaign that will promote the sale to its best advantage and not overspend to simply advertise the auction company.

Once the auction is complete, the auction company should provide a complete breakdown of all expenses to the seller, including copies of receipts within the auction summary report.

Buyer’s Premium:

What is a buyer’s premium? If you attend auctions regularly, you are very familiar with this term. The auction company charges a fee to the buyer when they buy an item at auction.

The buyer’s premium has been around since the 1980′s and is standard auction practice. It was first used by auction houses to help offset costs of running brick and mortar permanent auction facilities. Since then, it has spread to all aspects of the auction industry. It is prominent in online auctions and allows auction companies to cover added expenses incurred from online sales.

It is the responsibility of the auction company to provide clear disclosure of the buyer’s premium to both the buyers and the sellers. Those not familiar with auctions are often taken back by the buyer’s premium. They looked upon it as an under handed way for the auction company to make more money. Reputable auction companies will provide full disclosure within the auction contract, advertisement and bidder registration.

Typically, an auction company will charge online buyers a higher buyer’s premium percentage than those attending an auction in person. Extra fees are incurred with online bidding and are charged accordingly to online buyers. This provides the seller a level playing field for both online buyers and those attending the auction in person. Without the buyer’s premium, there is no way to do this.

Pre-Sales:

We’ve all been there. We’re looking forward to attending an auction only to find that some items were sold prior to the auction date.

As an auctioneer with over thirty-six years of experience, I can honestly state that pre-sales will hurt an auction. When a company decides to liquidate their assets, it is easy to sell off high-end pieces of equipment through online sources, equipment vendors or to other businesses. The seller receives instant cash and avoids paying a commission to an auction company.

Auctioneer’s find themselves appearing to acting in a self-serving capacity when potential clients say they are planning to sell off parts of their inventory prior to an auction. It’s hard not to consider the auctioneer’s commission when they warn you not to pre-sell anything. Yes, the auctioneer wants to earn a commission on those sales but it is more important that the auctioneer protect the sale from potential negative backlash that comes from pre-selling. The buying public knows when an auction has been “cherry picked” prior to the sale and it reflects in their bidding. It becomes a sale of “leftovers” and that impacts prices.

A buyer who purchases prior to the auction usually does not attend the sale. They already bought equipment at a good price with no competition. If they do attend the auction, they tend to let others know of their great pre-sale purchases which again, impacts prices and the overall excitement of the sale.

It is important to understand that auctions work best with a complete inventory. You want competition on your higher end equipment. The easy to sell items make it possible to gain respectable prices for hard to sell items.

When a business owner decides to liquidate their equipment assets, there is only one opportunity to do it right. Hiring a reputable auction company will assist you with a professional, orderly and timely liquidation.