Starting a business from home has been one of the ways that many people have found success during the current economic downturn. While there are many different approaches to working from home, there are some basic things you should know before starting a home-based business.
If you are thinking about starting a home-based business, I congratulate you, as this is a big step that can reap great rewards. But before you jump into your business, you must know that this is not the path to overnight riches.
You cannot be made successful with only 1-2 hours of work per week and is a big responsibility. The stigma with starting your own home-based business is that they are linked to all of those “get-rich-quick” schemes, but if you are entering into this with drive, ambition, determination, and perseverance, then you can achieve immense success in your first year.
One of the significant advantages of being an entrepreneur is working on something that interests you and is passionate about it. When you decide to start a new business, you need to spend some time developing your business idea.
The more information you can gather about what your potential customers want, the more successful you will be and the better your business.
If you want to start a home-based business, there are several things you need to consider. Before you start your business, you should evaluate your idea and determine whether there is a chance that you will make a profit from it.
To get you off to the best possible start, here are 13 things you should know before starting a business from home:
Create a to-do list
So first sit down, get a pen and paper, and list your daily schedule. Start with what time you get up, then step by step, write down everything you do each day. Most people will find that they have a couple of hours each day that can be used to focus on a home business.
Any sort of progress boils down to planning what you are going to do and then doing it without backtracking. Make a list of the things you want to do tomorrow, each evening before you go to bed.
Schedule your trips to the shops or wherever to coincide with the other things you have to do and with your trips to and from work, so you are not making two journeys when one will do.
Just take care of as many things as possible while you are out of the house.
Think about the time we spend just standing around e.g., time on the phone, and eliminate all that isn’t necessary. Set aside a specific amount of time to do any chores you have to do at home, but don’t overdo it, you do need some rest too.
By writing tasks down and then ticking them off, you will be amazed at your progress in finding the extra time to start your home business.
Money is important but not enough
Then, determine how much money you need to earn every month to stay in business (e.g., your operating income and salary).
Many business owners assume that their businesses won’t make any money, at least at first. However, it’s important to ask yourself how much money the business needs to cover and how much money you need to earn from your business to cover your expenses.
If you don’t have a lot of money to live on while you get your business up and running, your business might need to hit your minimum earning numbers by the end of its first quarter.
The more you know about business tax optimization, the more money you can put into your own pockets or right back into your business.
Research your competitors
To be successful, you need to research the competition and find out as much as possible about what they sell and how they sell it.
Moreover, you can visit their website and assess their online presence, in an attempt to find each of their unique selling points.
Analyzing competition includes getting to know your competitors, figuring out how they have positioned themselves, identifying their pricing and marketing strategies, and evaluating their strengths and weaknesses.
It’s vital to know your competitors, how they run their business, and the ideas you can gain from their success and also the mistakes made by a company.
In addition to the background knowledge and word of mouth, you will find that there are many ways you can carry out your research about your competitors.
Research on the target customer
You can also use Kickstarter’s services to test new business ideas and see if you have a group of potentially interested customers. However, you’ll still need to do the work of identifying your ideal customer and using your current network to help you reach that customer.
Creating an ideal customer profile is great; starting a business that already has a group of potentially interested customers is even better.
This came in the form of planning and hosting nearly 70 three – day conventions for my customer base of network recruiters.
If one of you sees your ideal customer as a 35-year – older men and the other thinks the ideal customer is a 50-year – older women, you probably aren’t seeing the business (and its unique selling proposition) in the same way.
Do market research
As part of your market research, you should reach out to your customers directly to find out their needs and preferences.
To make your business stand out, you’ll need to find a different niche to offer specific solutions for your customers’ specific needs.
If there is no market, you may need to consider a different business or find an audience elsewhere for your business. This could include taking your business to the Internet or checking out other areas in your state, provided you are willing to move.
Once you have gathered the necessary information about the market and your customers, it is time to decide how to position your business in the market.
If hotels wish to maintain their hold on the market, they must align the ways they operate according to millennials’ preferences.
Now that you have tested the market, built a basic customer profile and competitive data, made a few sales, and developed pricing, it’s time to develop a business plan to turn your idea into a real business.
Write a business plan
No matter how unique you might think your business idea is, you should be aware of competitors, said Ian Wright, founder of British Business Energy.
There’s no avoiding this reality for new small business owners. With a little planning, it’s possible to manage expectations and take actions with a sense of purpose toward building your business.
If you write a business plan and actually use it to run your business, your finances will grow, allowing you to build your dream life and create wealth for your family.
Temper your ambitions – almost no new business becomes a big success overnight. However, we all think that our ideas are the best, so when it comes to planning, be realistic, and not believe your business will keep doubling in turnover in the first 3 years.
Again, I highly recommend working with a CPA, your accountant, and your attorney, a corporate attorney, to ensure you get these levels correct.
A bookkeeper/accountant/tax professional, attorney, insurance agent, computer tech support, web developer/maintainer, and a virtual assistant are all professionals that can help your business succeed.
Your CPA should be able to help you set up your small business bookkeeping, and may even have a preferred bookkeeping software.
Then also, you want to be sure to think about all your taxes, and here’s where working with a CPA or an accountant helps.
You should also meet with both a lawyer and a CPA to understand the legal and tax implications of your business.
Do what you do well and delegate things to others, like maybe accounting, bookkeeper, and legal contracts to others who do that best.
There will be many, many hours of work
Setting your daily working hours is one of the most important things you will do as a small business owner working from home.
But no one ever told me that I would be trading my 50-hour workweek for a 100 + hour work week when I first started my business.
So, you won’t be able to see family for any meaningful amount of time, and you can also end up working long hours at times, the same as you would if you drove to an office every day.
Some entrepreneurs use home loans and personal loans to start a business because interest rates on these types of loans are low.
This generally includes the capital that you can introduce from your savings as well as the funds that you can borrow.
Approach a few banks and private lenders, get a few quotes and compare them to identify the most beneficial type of funding.
If your business falls into the “high start-up costs” camp, do you have the funds to cover its expenses without jeopardizing your own financial stability?
This can cost you about six months with no revenue because there is always something to slow you down, whether it be the bank not lending to you or government red tape.
Take care of the legal aspects
A lawyer can help you choose a business name that works both for your business and for your state’s business requirements.
Different types of businesses have different types of licensing requirements, and individual cities may have additional permits you need to secure.
A lawyer can also help you decide whether it would be worth the time and money required to trademark your business name.
You will also be required to get a service license and fulfill certain legal requirements related to your business set – up.
Your lawyer can explain why your business might need insurance and which types of insurance you should consider purchasing.
Ask your lawyer to help you understand which federal and state regulations apply to your business, and how to remain in compliance.
Once you’ve identified your niche, the product to sell, your target audience, and your niche market, now think about the formation of your business. You can choose a partnership.
A business where one partner can afford to go without income, and another partner can’t, for example, might lead to disagreement on business decisions.
It’ll be hard to know how you’ll resolve disagreements until you’re actually in the middle of an argument, but discussing how you might address disagreements.
You might need to decide whether you’re going to bring on a business partner (or partners), and how you and your partner(s) will divide the responsibility and the profits.
You have already asked yourself this question — but if your partner has a very different answer, you’re going to want to discuss it.
A business partner who thinks success equals “getting into the local small business expo” is going to be very different from a partner who thinks success equals “getting on Shark Tank.
You should consider how you are going to market your business because, without customers, you have no business. So you need to make a plan as to how you are going to get the word out and then convince your customers on why they would rather buy from you than your competitor. How you will accomplish this will depend on the type of business you have, and the services or goods you are offering.
Keep your ego in check
When you start a new business and achieve some early success, you need to be always disciplined to keep your ego in check and keep your starting vision in mind.
If you find yourself lacking in self – discipline, this might be something to work on before you pursue your entrepreneurial dream.
Know yourself, your true motivational level, the amount of money you can risk, and what you’re willing to do to be successful.
Starting a business from home successfully requires a great deal of personal motivation, discipline, and energy, which will come if you really want to succeed in your home-based business.
The rewards can be beyond your wildest dreams. Make no mistake about it. Starting a home-based business has made a lot of people wealthy indeed. If you put the time and effort in now, you could be one of those wealthy people, with no worries about paying any bill ever.
The more success you want and the more dedicated you are to achieving your goals, the more money you will make. Hundreds of people around the world have become very wealthy just through selling from their home-based businesses.
Many of them were flat broke and unable to find a regular job when they started, but they have done it, and you can do it too. Remember, it can be the surest way to all the wealth you can ever want, depending on your chosen field.
If you are ready to become wealthy, then think seriously about selling some sort of proven product line, preferably something exclusively yours, something that you write, manufacture or produce for the benefit of other people.
Learn from people who started where you are today and now enjoy their dream life. Check out what they do and, most importantly, how they do it.
Take their proven plans and develop your own products, which with the right advice, is easier than you think.