Starting a Home Business: A Guide
Working for yourself in your own home has a lot of potential benefits, but it is not an easy route to wealth. In order to build a strong and profitable business while working from home, you need to have a lot of time and resource to invest, but you also need to have a clear strategy behind the right choice of business.
The most successful start-ups are those sparked by passion and a genuine interest in the product or service, unlike businesses which begin with no more than a desire to earn a lot of money. If you are considering starting a business from home, here are some key questions to ask yourself before taking the leap.
What are your talents and skills?
The first step is to make a list of your natural talents such as being creative, a good communicator, or a problem-solver, and personal qualities which could be useful when running a business. Ideally, you will be self-motivated, disciplined, and comfortable with a certain degree of risk. You should also consider the skills and experience you have accumulated over time which could help you in a new venture. When you have fully evaluated your talents, skills, experience, and resources, you can start to generate potential business ideas.
Will your business idea work from home?
Of course, not all business ideas will work in the home, so you need to look into your location and any zoning restrictions. For example, you may not be able to run a manufacturing business in some residential areas, and you may find it difficult to see clients or meet with suppliers at home.
Depending on the type of business you start, your home may or may not be equipped to support the operation. For example, you might need a physical space to work in, a place to store supplies or finished products, or you might need an area where you can see clients privately. Whether you run a business from home or you lease/buy business premises, it is important to get a general liability insurance quote. General liability insurance will protect you financially should your business face a lawsuit, e.g. if a customer were to injure themselves when on the premises.
Is your business idea profitable?
You may have a passion and a talent for craft or making cakes, but if you are spending more on your supplies and materials than you are able to charge for the finished product, your business is not profitable. You also need to consider how long it takes you to create a product or complete a job; if you are only able to produce one or two items per month, you are unlikely to make a living from it. You should research the cost of your product or service (to you), how much people are willing to pay for it, and whether you can earn a living. It may take time for a business to turn a profit, so you need to be sure you can cover your financial commitments and living costs during that time.
Have you got a business plan?
Now you have your home-based business idea, it is time to get down to the detail by writing a business plan. Business plans are usually associated with start-ups looking for funding from a bank or an investor, but actually every business needs a plan. The process of writing the plan will tell you if the business is likely to be financially viable, if there is a market for the product or service, your main competitors, your marketing strategy, how you will finance the business, and when you expect to make a profit. Your business plan will set the blueprint for how you will operate and can be referred to when you are facing big decisions.