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How Do I Start A Home Based Business?

How Do I Start A Home Based Business?

Many individuals dream of the day when they can call their own shots and set their own schedule. To make this happen, it is common for people to strike out on their own and start a home-based business. In order to be successful however, it takes more than a good idea and hard work. A home based business can be as complicated or as simple as you like depending on a number of factors including prior business experience and personal motivation. There are some key areas which will have a significant impact on how successful you are in the long run.

Love What You Do

Every successful small business owner will tell people looking to blaze their own trail to do what you love. This philosophy applies to employees working at a large corporation or entrepreneurs starting the next success story. Initially, starting a home-based business will require an inordinate amount of time and dedication from juggling finances to managing inventory and servicing customers. It is often recommended to turn a hobby into a business because it is already something you enjoy doing regardless of whether or not we receive compensation. If you don't enjoy cooking then don't start a bakery and if you don't like children then don't offer piano lessons. By focusing attention on activities you enjoy your more likely to persevere through the difficult times.

Line Up Financing

Most new businesses, including those started at home, fail due to a lack of sufficient financing. Home-based businesses are especially conducive to working a full-time job while getting the ball rolling on a new business. Since there is no need to worry about overhead such as rent and utilities, you can focus on developing your product or service. Many home based businesses can operate minus employees, significant inventory or other upfront costs which result from renting a space. Keeping costs low by working out of your home is only part of the solution. Create a budget and focus on developing a clientele early on to create positive cash flow which can then be funneled back into the business. By self funding you can avoid the need for small business loans and making monthly payments on outstanding business debt.

Set Realistic Goals

Starting a home based business can be an exciting time where the world is your oyster and there are endless possibilities for success. Realistically, finances will be tight and hours will be long leading to frustration and questioning if it was the right decision to start a business. By setting incremental realistic goals which are achievable, you create a situation of positive reinforcement coupled with slow and steady growth. It is the very rare case that someone opens a business and within weeks are so successful that they are reordering inventory and hiring new employees. It takes time to market your brand and develop positive word-of-mouth leading to success.

Promoting Your Business

Your new home based business will only be successful if the general public knows about its existence. If you have enough initial financing it may be possible to purchase TV and radio spots to advertise your business. For the most part, new businesses will be limited in their advertising budgets and will rely more traditional means of spreading the word such as community engagement, event sponsorship and creating business cards, brochures and flyers. The more creative you are promoting your business the more likely you are to succeed since it will set you apart from the competition while saving money. Talk to other successful small business owners and see what they do to advertise their businesses.

Buyers & Suppliers

Most home based businesses should focus on endeavors which don't require multiple suppliers or the purchasing of inventory. Having $50,000 of inventory sitting in a warehouse or being dependent on a chain of suppliers for product creation is very difficult to fund initially. If too much money tied up in your supply chain then that is less money devoted to promotion and operations. There is also the consideration of cash flows since suppliers may need to be paid prior to revenues resulting from sales. Most small businesses get caught off guard when they have bills due to creditors but have insufficient sales resulting in negative cash flow.

Image by: MIKI Yoshihito