The dream: I will work for myself, have a less stressful life and make lots of money.
The reality: starting and running a small home-based business is NOT a piece of cake. No matter how great you are in your field of expertise, or how delicious your homemade fudge is – the act of going from wishing about becoming your own boss to doing it involves a hunk of time, lots of hard work and a whole new set of skills.
Here’s what you need to know to make the transition without losing your mind or your life savings.
Don’t Quit Your Day Job, Yet
Take the time to conduct the research you need to before you give notice to your employer. The basic questions you must have answers for include:
- Who will buy your product or service?
- How will you bring it to market?
- What will your geographic footprint be (will you sell to the end consumers within 10 miles, 100 miles, 1000 miles?)
- How much will it cost to produce your product?
- How will you find your prospects?
- What is the average sales turnaround time?
- How much will it cost to set up your office?
- How many widgets or services do you need to sell in a week, a month, etc., to be profitable?
Basic Expenses for Getting Started
Even if you are frugal, you will incur costs to open your doors as a business entity. Here are the basic tools you’ll need to launch your business with strength:
- Desk, phone lines, computer, miscellaneous software, printer, scanner, fax, copier, cell phone
- Internet account (with your company name URL)
- Professionally designed Website/web hosting company
- Designed business cards, letterhead and collateral materials (direct mail postcard, print ads, a brochure)
- Professional membership fees
- Online advertising (on networking or other professional business group sites)
- Customer Relationship or Account Management software (ACT or SalesForce.com)
- Marketing consultant
- Copy writer
- Graphic designer
- Business operations consultant
- Business lawyer
- Accountant
Get the Facts
Before you leap into any new home-based business – check it out. What is the earnings potential in year one, two and onward. Look online; read the fine print. Look into your competitors for their pricing, policies, turnaround time, and press coverage. Read articles like this one, a lot of them.
In addition to being the CEO, your average day will be filled with duties pertaining to these separate and distinct job titles: Director of Sales & Marketing, Operations Manager, Head Bookkeeper, IT Director, Chief of Procurement, Advertising Executive, Vendor Relations Specialist, HR, Client Relations Director and Maintenance Manager. In all these capacities you have to develop systems, policies, and procedures so you are prepared to deal with clients, vendors and prospects in an organized and professional manner.
It Takes Time
No matter how you slice it – most businesses are not overnight successes. Studies show the average turnaround time is 2-5 years. So have at least one if not two years of income saved to sustain you while the business is in its start-up phase. Even if you are lucky enough to get a few clients right away, you need to plan for the time it will take to foster new sales. Have a solid business plan that outlines everything you can think of, along with multiple Plan Bs. Because no matter how well funded or connected you are, there are always glitches and speed bumps to deal with, manage and recover from.
The good news is that you can make a very nice living from a home-based business, whether you run an online retail clothing boutique, a dog grooming business or a marketing consultancy.
Getting all the facts about funding, start up costs, sales turnaround times, help, insurance, marketing, etc., will help you run a winning home-based business.
