Like many other people in the US right now, you may be looking to start a home business to replace a lost job or as some insurance against a possible job loss. If you’ve decided to become a direct sales party plan consultant, here are some factors to consider when choosing a company during a recession.

1 – What type of products are your target market going to buy? Carefully consider who you are going to be selling to and find out what they are buying and what they have given up because of the economy. Keep in mind that many of us are cutting back to necessities, choosing less expensive alternatives for items we have to buy, and being more careful about getting value for our dollar.

Within the next few days we’ll talk about what to sell during a recession in more detail. In the meantime, there is some information about it in our post, Recession Proof Your Business Using the Lipstick Theory.

2 – Is the company positioned to weather this economic storm? Of course there are no guarantees, but determine what factors you think improve their chances.

Companies that have been in business for a longer time have endured more economic ups and downs. The early 2000’s saw some problems because of 9/11 and accounting scandals as did the early 1990’s and 1980’s. Companies that launched before those dates have a proven track record. There are even a few companies that made it through the Great Depression and are still in business today.

Financial information that can give some indication of their ability to withstand a recession is readily available for publicly traded companies. For privately held companies there are some questions you can ask to try and get an indication of their financial stability. Helpful information includes knowing how they are financed, whether or not they are debt free, and whether they are backed by a stable parent company.

For more on evaluating a company’s financial stability read, Evaluate This Often Overlooked Criteria When Choosing a Business Opportunity.

3 – How do product prices compare with other companies selling similar products? Pricing isn’t always a factor when purchasing from direct sales consultants, but it is more of a factor during a recession.

4 – Consider choosing recognized brands in which consumers have more trust.

5 – Are there sales quotas or minimum monthly purchase requirements and if so, are they reasonable or do they seem excessive?

6 – Understand exactly what you will be getting for the money you invest in a starter kit and know what the ongoing costs are involved.

7 – Consider selling consumable products for repeat customers once they use them up.

Probably more important than anything… use your common sense. If something doesn’t seem right or you aren’t comfortable with the answers to your questions, move on. Don’t start out wondering if you made the right decision. Find the right fit for you and the current economy.

Need more help choosing a business. Find it at Choose Your Opportunity.

You might also like these posts:

• More Consultants, but Not More Sales
• What To Sell During a Recession
• Fact Is… Direct Sales Is Not Recession Proof