There are many reasons to start a home-based business: to earn extra income, supplement an existing salary, seek new horizons after leaving a permanent job due to layoff or downsizing, or to fulfill a lifelong dream. Whatever your reasons, thanks to the growth of the Internet and changes in the way people work, There has never been a better time to start your own business. You, too, can take advantage of the freedom of running a business from home, with its lower costs, reduced travel expenses, and the flexibility to choose the environment and hours that work best for you.
Suggestion: You’re in good company, as Apple Computers, Lush Cosmetics, Facebook, and even Ford Motor Company are just a few of the familiar names that started out as small home-based businesses. Then let’s get started.
Step 1 – Make a strong commitment to your new company
Ask yourself a question: how many of the success stories you’ve read about were founded by people who just sat around and dreamed about it? The hard truth is that if you want to achieve something, then you need to make a commitment: for as long as it takes to succeed. It is very unlikely that you will make your fortune overnight, but if you persevere, you will succeed. It doesn’t matter if you can only commit to 15 minutes a day, the important thing is that you make those minutes count by always trying 100%..
Suggestion: Apparently Thomas Edison made 1,000 attempts before he invented the light bulb. He never said that I failed 999 times; He Said I Spent 999 Learning How Not To Invent A Light Bulb!
Step 2 – Do you have what it takes to become your own boss?
The answer is yes! It helps if you like taking risks and the responsibility that comes with it. It also helps if you like hard work, decision making, and the challenges that come with owning your own business. And finally, being well organized, having the ability to meet deadlines, and being able to work with numbers is extremely helpful. But the fact is, if you don’t have all these qualities (and very few people do), just find someone who does. So, for example, if you’re not familiar with the requirements around record keeping, hire someone!
tip top: Success is 5% inspiration and 95% inspiration.
Step 3 – What business?
It might be that you want to start your own beauty salon, a pet sitting service, become a language tutor, a physical therapist, a landscape gardener, an affiliate marketer, an eBay seller, create self-help videos, set up an e-commerce website… the list is almost endless. The fact is that it doesn’t really matter. Because the steps to success are the same for all companies. What does differ is the way it manages and responds to the needs of your particular business or industry. If you haven’t decided on a particular business yet, there are literally thousands of business ideas covering every product and service imaginable. Whichever you choose, ask yourself the following questions:
- Is there an identifiable gap in the market for your product or service?
- Have you identified a product or service that you can’t seem to find?
- Can you live from your hobby or something that you are passionate about?
- Can you offer a better product or service than someone else?
Suggestion: At this early stage it is also worth exploring the common mistakes startups make and how to avoid them.
Step 4: Developing Your Business Idea
The next step is to dig a little deeper and define exactly what products and services you intend to sell, and just as importantly, who you’ll be selling them to. Even if you already have a fixed idea of what you want to sell, you still need to focus more intensely. It is not enough to say that you are going to sell pet products, you need to focus on what types of pets and consequently what products those pets would need. Marketing your product and doing a little market research can mean the difference between success and failure. You can discover your target market’s clothing purchase, geographic location, and even who your competitors are. You can gather a great deal of this information simply by spending some time searching the internet and gathering a list of companies that are already operating in your chosen field. Plus, you can look through local newspaper and store ads to see who’s available, or even do your own market research by asking people on the street if they’d be interested in your services.
Suggestion: Your family and friends often say it’s a great idea, even if they think otherwise, just so they don’t hurt your feelings. So ask some independent people.
step 5 – Do you need a business plan?
The good news is that not all businesses require a formal plan, especially if your home operation does not require outside financing. Click here to learn more about funding sources for start-ups. The problem with a business plan is that not only will you have to learn how to put a plan together, but it can also take weeks to prepare, time that can be better spent focusing on getting your business off the ground. In fact, studies have shown that having a formal business plan for a home-based small business doesn’t really make any difference to the ultimate success of the business. The time you may need to produce a business plan is when you are looking for potential financial support. It’s not just for banks, but also if you have to reach out to family, friends, or business connections. The clearer your vision and the more organized you look, the more likely you are to get the support you want.
Suggestion: Matt Coffin, founder of LowerMyBills.com, raised $4 million in funding from investors simply by using a 10-page PowerPoint presentation!
Step 6 – Initial start-up costs
Well, let’s say you have your idea, you’ve spent some time looking at the industry and its market potential, now it’s time to make sure you have all the tools you need to run the first phase of your business. Below is a list of the most common items a home-based business requires to get up and running:
- A computer and associated software
- Internet access
- build a website
- Landline and/or mobile phone
- business letters
- Access to sufficient stock, if you sell products
- A designated space, preferably in a quiet place
- a desk
It’s not a long list and they can all be obtained without breaking the bank.
Step 7 – Additional Funding and Financing
It may be that you are starting a business while you are still employed or have another source of income to cover you while the business finds its footing. If you don’t need any outside funding, skip this section for now and continue to the next one. But there are a number of reasons why you might need financing, beyond simply paying for office equipment, website development, advertising, etc. One of the main requirements is sufficient funds to cover personal expenses while the business gets up and running and your clients start paying you! As a general rule of thumb, many trading advisers suggest that you should have at least three months’ worth of money set aside, as it can be that long before you start seeing profits. So where do you go to get financing? Well, for starters, there’s your own savings (if you don’t have faith in your idea, who will?), then there’s your family members, friends, and business associates. Further afield there are additional sources of finance such as bank loans, grants and equity financing from private investors. In these cases, it is strongly recommended to develop a business plan to persuade and secure the necessary financing.
Step 8 – Record Keeping
It’s not the most pleasant aspect of running a business, but it’s essential nonetheless. It is extremely important to keep an accurate record of your income and expenses from day one: Start as you want to continue and enter a suitable system. Not only does it allow you to keep a close eye on how well your business is progressing, it is also a legal requirement!
Some advices:
- Keep and file all your bills and receipts related to your business (if in doubt, keep them anyway and ask your accountant if you can reclaim them)
- Since you will be using part of your home for business, keep copies of utility bills so you can figure out how much is related to your business.
- You must be able to show what you have spent personally and what you spend in your business. So having a separate bank account will make life a lot easier.
- If you are employing staff you must keep records of their wages and taxes and national insurance which you have deducted and paid to HM Revenue & Customs (HMRC)
Keeping good records will pay big dividends in the long run by lowering your overall tax bill, making filing tax returns much easier, and helping to ensure you pay your tax bills on time and avoid interest or penalties.
step 9 – Promotion of your new business
People used to say “build the best mousetrap in the world and people will find their way to your door”. But today there are so many businesses that offer such a wide variety of products, how do you know which door to open? You have at your disposal a wide range of online advertising services and more conventional offline advertising services, which when combined create a powerful weapon to attract and retain those all-important customers.
Step 10 – Don’t put it off until tomorrow. Get started today!