A must read article for people that want to start a home based business.
Are you planning to start a home based business? Have you already started a home based business and seemed confused on the way forward? While people are busy searching for home based business ideas or work from home jobs, it is important to understand the rudiments first. When you equip yourself with vital facts about home based business, you will be able to work from home seamlessly without any fear of failure. When you have adequate knowledge about a particular business, whether home business or otherwise, you will know what to do to move the business forward. This article will throw lights on certain vital areas you may need to know about starting and running a home based business. This article is divided into segments as outlined below:
- Myths about home based business
- Pros and Cons of home based business
- Approaches to a home based business
- How to start a home based business
- Success secrets of some profitable home based businesses
- Case study of home based business ideas
Myths about home based business
It is good to start by addressing some myths about home based business. Many people failed or became frustrated after starting their home business because of the wrong notion or misconception they had about it. Someone said that when a purpose of a thing is not known, abuse is inevitable. The Preacher said it this way; ‘many people want to go into city but they don’t know the way to it’. What a frustration! If you don’t want to experience frustration in the pursuit of your home based business or work from home job, it is good you clear these myths. Let’s discuss the myths one by one.
Also Read: Work From Home Business Ideas
I will get rich quick
A lot of people wrongly believe that starting a home based business will make them rich quickly. I don’t blame them. They must have got carried away by various advertisements on the internet on how to become a millionaire overnight. They will tell you that you can work from home and become a millionaire working for few hours. I need to tell you the truth. Nobody can become a millionaire overnight with home based business. I am not saying that somebody cannot make one million dollar in a day or week. If anybody will ever make such amount, it will be a reward of several years of hard work. If anyone wants to lure you into a home based business that guaranties overnight wealth, you need to beware. That person may be a scammer. Though home based business can be an easier route to starting your business, you should understand that even more
than other small businesses, home based businesses can take some time to get to the point of generating income for you. If you’re starting out your home based business as a side business, this may not be a problem. If you think that you will start making mega money immediately you start your home based business, it will be like buiding castle in the air.
I don’t need any capital
This can be true to certain extent. If you are starting a home based business without any capital, it is possible you are already having the resources you might need to do the job. For example, someone that is into business plan writing may claim that he started the home business with no capital. But what of the laptop he is using? Someone who does not have a laptop may need to buy one or go to business supports centre if he wants to minimize his initial investment. Generally, one can say that the cost of starting a home based business is low.
I only need to work few hours
I usually laugh anytime I hear someone saying that he only need to work few hours in a day. If you are running your home based business as a hobby, this can be true. But if you actually want to run it as a business, you don’t have any short cut to success. You need to work very hard and for long hours especially at the initial stage. When your business stabilises, then you can reduce the number of hours you work. And this will depend on the type of home based business you do. Whatever you put in will determine the kind of results you get.
Nobody can control me
Yes, you are your own boss. I say congratulations! If you had been working as an employee, probably you had one boss. Now that you have your own home based business, you may not have anyone to stand at your shoulder shout at you. In reality, you have many bosses now. Who are the bosses? Customers are your bosses! They will dictate to you what to do. The only difference is that you have the right to ignore them. But if you do, you already understand what this means. Customers are kings. Even though you are the owner of your home business, they can fire you at any time. A business without a customer is a dead business.
I don’t need to go out
Running a home based business does not mean you will not go out there. It simply allows you to work from home. There will be situations where you need to take the business to your customers’ doors. It is almost the same as other businesses having their own offices. Despite the fact that they have office, they still need to go out for meetings to prospect to customers. They need to meet suppliers and providers of finance. In the same manner, you cannot succeed running home based business without going out no matter how creative or unique your home business idea may be.
Website is all I need
Possibly you want to contest the point I mention above that you need to go out there to meet customers, suppliers and bankers. You may say that you only need a website for your home based business. To some extent, a website will help you promote your home based business. The truth is that there are millions of websites out there. If you only rely on website to run your home based business, this may lead to frustration. You need to engage both online and offline activities before you can draft traffic into your home business website. You might need to network, engage in public speaking and place adverts before people get to know about your home based business.
I will have more time for my family
Those people that run home based business may spend most off their times at home. This does not mean that they have more time to spend with their family. There is difference between working at home and having time for family. You can work at home all day long and don’t have time to attend to your family. If you work from home, this can turn out to be a deterrent to having time with your family if care is not taking. You can find yourself engrossed in your home business day and night because the business is always with you at home.
I earn more than my contemporary employees
It is possible to earn more than your contemporaries who are working as employees. However, you need to get your yardsticks right. If you just focus only on the pay checks they receive at the end of each month, you may not be measuring correctly. You need to consider other benefits they enjoy which you may not have access to. Such benefits may include free healthcare, pensions, gratuity, paid vacation and training etc. By the time you put value on all of these, you may discover that your earnings are far less than theirs. If you want to compare yourself, it means that your home based business is providing you all these benefits too.
It is just a hobby
It is possible you started your home based business as a hobby. Except you are still running it as a side business, you can’t claim that it is just a hobby. Immediately the hobby becomes your main source of income, it has become a home based business which you need to give a business approach. If you call it a hobby, people may not pay a fair price for what you do. As a business, your price should not only cover your costs. It should provide you with adequate margin that will sustain you.
Client may think I am not serious about your business
People erroneously think that if they work from home, client may not take them serious. They will go to rent an office which they don’t need. Let me tell you the truth. Most of your customers may not know that your business is a home based business. Some of them may not even have any cause to visit you. You may be the one to visit them for meetings or to deliver a product or service. Customers are mainly concerned with the quality of your product or service. If your product or service satisfies them, they don’t have any cause to complain whether you work from home or elsewhere.
I may not be able to compete with other businesses having their offices
Competition is not just about having a big office. There are different ways you can compete with other businesses having their own office. You can compete through excellent customer service and prompt response to customers’ needs. Your home based business can compete in the area of costs. Since you work from home, you may not need to pay for office rent or purchase office furniture. Because you work from home, you don’t to spend money commuting to work. All these will result in cost savings. Since your cost is low, you will be able to offer the same service offered by other businesses with office at a lower price. You have a cost advantage over them. In fact, this is one of the advantages of running a home based business.
Pros and Cons of Home Based Business
Let’s start by looking at the pros (advantages) home based business provides to it owner.
You are your own boss
Having your own home based business automatically makes you your own boss. You don’t work at the dictate of any employer. You have the opportunity to do things in your own way. If you work as an employee, you can only make a suggestion. Your employer is not under any obligation to accept your idea, no matter how beautiful it is. Now that you have your own home based business, you can begin to put those ideas to work.
Most home based businesses don’t require huge capital outlay to start. Even there are some home based business ideas you can start with no capital especially if you already have the basic resources needed to kick start them. Top on the list of home based business ideas you can start with little capital are businesses that are talents or skills based.
You have the privilege to create your own work schedule. Your work schedule does not need to be 9am – 5pm. You can decide to work during your most productive hours. This can be in the morning, afternoon or even at night. You can also arrange your work schedule in such a way that will allow you to have time for other important things.
More time for family
As mentioned earlier, the fact that you are running a home based business does not automatically translate to having more time with your family. Working at home only provides the opportunity if only you can make most of it by arranging your work schedules appropriately. I know of many people that work from home, still their family complain that they are not available for them.
No need for commuting
When you work at home, your home becomes your office. You don’t need to spend time or money commuting to work every day. You don’t need to set up any alarm clock to wake you up in the morning in order to beat traffic going to work. You sleep well and this makes you to be more productive.
Home based business provides you the ability to work on multiple jobs. You can work from home on different projects from different clients or take additional jobs. If you work as an employee, your employment policy or work schedule may not allow you to take additional jobs. Though this tends to be an advantage to people having their home based businesses, you should not bite more than you can chew. You should set limit for yourself. You don’t need to over stretch yourself.
When you work from home, your overheads become considerably low. You are not paying rent neither do you need to spend money on the painting of the office. All these tend to add up to having a robust bottom line.
You pay less tax
When you work from home, some of your expenses become tax deductible. You should have a way of capturing all the expenses that relate to your home based business. This will make you to pay less tax. You can also defer some tax payments if you re-invest your income into your home business.
Cons (Disadvantages) of home based business
With all the advantages mentioned above, home based business is not without its own disadvantages. These are enumerated below:
‘Always at home’ stigma
Work at home jobs may be more suitable for moms. As a dad, if you always stay at home, you may lose some respect. People may mistakenly consider you as jobless especially if your home business is internet-based. People may have wrong perception about you. To worsen it, you may not have opportunity to explain yourself to them.
Availability for errands
Who else can we consider for errands if not the person that is always around? In your local community or at home, you may be sent on errands that do not dignify you as a person. But because you work from home and are always around, you may be the right person for the some errands.
If you work from home, there will be a lot of distractions here and there. There will be distraction from the kids especially during holidays. If your children are still very young, they may not understand whether you are at work or not. This may affect your productivity.
For people that think that they will work for fewer hours if they start a home based business, this can be far from the truth. Home business is very time-demanding. At times, you may need to work late or wake up in the night in order to meet the demands of your customers. You may decide to wake up in the night to work in order to make up the hours you lost to distractions during the day.
If you don’t want to be distracted, you may need to isolate yourself from people and even your family. If this is not done with caution, this may lead to loneliness. This is worse if you are into an online business. Your laptop can turn to become your companion. I have had instances whereby I did not step out of our gate for two days.
Getting back to 9-5pm work style is difficult
No one ever prays for failure. Supposing your home business fails or does not provide you enough income as envisage, you may find it difficult getting back to 9-5pm life style. Also, except the job you are seeking for requires entrepreneurial skills and experience, employers may be reluctant taking you. They will believe that you will soon leave them to start your own business or that you will not be committed to your job. They will believe that there is tendency that you still have your home business in mind.
Approaches to a home based business
In this section, you will have a glimpse of how to start a home based business. If you are considering starting a home based business and don’t know how to go about it, there is no need for you to worry. I am here to guide you on two approaches you can take to start your dream home based business. One thing I usually do anytime I seem to be at a road cross is to look around to locate who have passed through the same situation and scaled through. I will then say to myself, ‘if the person could go through the challenge and came out, then I will survive the situation’. What am I saying here? I mean, if other people now run their own home based business, then you can start your own too. Broadly speaking, there are two approaches you can take to start your home based business. You either start by moonlighting or you start full time home based business.
Moonlighting is peculiar to working class. That is, employees who are currently working somewhere else other that their own business. Moonlighting is essentially a way of starting your home based business first as a side business. If you want to start your home based business through this approach, there are certain factors you need to take into consideration.
- You should not compete with your employer.
- You should not use your employer’s resources for your home based business. Your official hours are part of your employer’s resources. Therefore, you are not expected to use official hours for your business.
There is need to point out that not every home based business can be started through moonlighting. Below are some categories of home based business you can start this way:
- Online businesses such as blogging, affiliates, sales on ebay etc. This type of home based business is primarily web based and may not require your physical attention at all times. Some of online businesses can be run as auto-pilot.
- Family run business. If you have family members who can serve as backups when you are not available, it is easy to start the home based business through moonlighting.
- If your home based business is hobby based, it is easy for you to start it as a side business. For instance, a comedian may not need to quit his job before he can perform his comedy business likewise a DJ.
- If your product or service is not the same with nor similar to that of your employer, it is easy to start your home based business without conflicting with your employer.
On the other hand, if your home based business is labour intensive and will require your active participation, this approach may not be suitable for you. Also, you may not be able to use this approach if your home based business requires extensive travels or that you need to conduct the business during office hours and you don’t have anyone to act as backups.
Main advantages of moonlighting include the following:
- You can easily raise initial capital for your home based business from your full time job.
- The income from the home based business can be used to meet expenses or finance a specific project
- Your home based business provides a security in case of job loss.
- Also, if your home based business fails, you still have your current job to fall back to. Moonlighting allows you to test your home business idea before quitting your job.
- Moonlighting allows you to gain experience both on your current job and about the home business. By the time you want to start fully, you must have garnered enough skills and experiences.
Full time home based business
Starting home based business requires that you quit your job to focus on the business squarely. This seems to be a risky approach but it allows you to dedicate all your energy and resources towards ensuring that your home based business does not fail. One of the advocates for full time approach to starting a home based business has this to say:
“…moonlighting presents a dangerous risk, if a person wants to do their own work, let them start a firm and struggle and starve..”
This is like saying, cast all your eggs in one basket and keep watch over it. If you have carried out enough research about your home based business idea and have prepared a business plan and you are convinced that it is feasible, starting home based business full time will accelerate the growth of the business. Burning the bridge behind you is a sign of commitment to your course. There is greater chance of success for full time home based business. However, you must ensure you have enough money set aside to cater for your overheads in the initial six months before your home based business start generating income.