In September of 1998, two graduates rented a garage from a friend. These two graduates, Larry Page and Sergey Brin, went on to develop what we know now as Google. And their friend? Susan Wojcicki, of course.
Starting a home-based business is one of the most exciting ventures there is. The excitement is based on the fact that you are doing something you have a lot of passion for. You are also very optimistic about watching your business grow by leaps and bounds before your very eyes — this is the dream anyway.
Home-based businesses have begun to rank as the most common form of business start-ups. The U.S. Small Business Administration reports that half of all small businesses are home-based.
The internet provides a massive opportunity for you to operate a business from anywhere in the world, so why not your home?
A home-based business isn’t an automatic guarantee of financial freedom, and it involves a gradual process that you have to follow to secure business success.
However, you have a lot of flexibility that you typically wouldn’t have if you worked out of rented or bought office space. When it comes to making your money and spending your time, the choice is yours too.
It usually requires a long-term, deep commitment to the task you have at hand, and a deep understanding of how business works is necessary for success. Or any home-based business to take off, self-discipline is essential to maximize the benefits of working from home.
Beyond fantasizing about what your home-based company would look like, there are certain realities that you need to face initially.
To create a home-based business with a stable foot on the ground and a potential to earn big, you would need to concentrate your time and resources on drawing up a viable plan as well as considering some other factors.
Essential Considerations For Building a Successful Home-Based Business
Building a successful home-based building from the ground up isn’t childsplay. According to the Small Business Administration (SBA) Office of Advocacy’s 2018 Frequently Asked Questions, about 80% of small businesses remain at the end of the first year.
However, at the end of the first year, the figure crashes significantly. Only about 45.4% to 51% of these businesses survive past the 5-year mark. Going further, only about one in every three small businesses make it to the 10-year mark.
To build a viable home-based business, there are certain factors that you need to take into serious consideration. Here goes:
1. A Crystal Clear Business Idea
A business idea is a flag-off to any venture. It is the reason for venturing into any business type at all. Home-based businesses usually range from small-scale manufactures, such as crafts, to consultancy services.
Before going ahead to set up a home-based business, you know exactly what you intend to do. If you’re not sure yet, then you would need to give it some thought.
You should base your intended product(s) or service(s) on factors such as your background, your experience, and skills.
For every idea that pops into your head, write them down, and then carefully analyze them. While some may seem to be all equally great, there is no point in trying out every single one of your ideas.
The essential thing to do is to be open and try what you gauge to be best based on your opinion and the market.
And even if most of the ideas are not exactly great, there would be a couple that would seem viable and has the potential to be “it.” Try not to be motivated by the potential income.
If you go with the idea that you don’t like a lot but are bound to rake in lots of income for you, you would burn out and lose interest in no time. And it would go downhill from there.
Before offering products or services that would appear to attract potential customers, you need to be well vested in the venture yourself.
One of the reasons why home-based businesses shut down before the end of the first year and before the 5-year mark is a lack of interest and passion.
Given that you would be spending a lot of time inventing a lot of effort into your business doing something that doesn’t excite you is not the way to go. And if you continue along that path, there is a very high risk of failure.
2. An Airtight Business Plan
Lacking knowledge on the importance of a business plan is one of the significant factors that ails home-based businesses, and most people seem unnecessary.
The assumption that it is a home-based business, so it isn’t anything “serious,” and a business plan is, therefore, unnecessary could be very deadly for your business if it eventually takes off.
A business plan is your guide to knowing exactly what you want to do, but beyond that, including other factors such as determining your target market and how to get across to them.
A well laid out business plan is one of the few guarantees you can have to guarantee business success. This is your map to the treasure chest.
For your business plan to succeed, certain aspects must be detailed very clearly:
- Defining Your Target Market: your product(s) and service(s) are not meant for you; they are to be offered to people who need them. This is why it is essential to identify this set of people that would be our potential customers. These days, there is a whole lot of competition thanks to a saturated market, so you would need to do something to make you stand out and help you create a strong customer base.
- Conduct Your Research: understanding the type of market that you are wading into is essential as well. Before embarking on your products and services’ sales, find out whether what you are offering is in demand and whether it would still be in need for a long time.
- Forget Fantasies: it is very commendable to think big; however, there’s no point in getting ahead of oneself. When it comes to writing your business plan, you need to set highly realistic and achievable goals. Define your strategy, outline your future goals, but remember to keep your feet on the ground.
The only way for people to know that you have a business now is by telling them that this is the only way to build up a customer base. And thanks to technology, marketing is a lot easier now, provided you know exactly what to do.
First off, you need to create a form of word of mouth scheme. About nine out of ten customers are swayed by word-of-mouth suggestions when making a purchase decision.
As a new business, you can use this effective marketing means by starting a referral program.
The easiest way to start is by recruiting your family and friends. Have them identify people that they are certain might need your product or services and have them bring up your business. You could include incentives such as rewards or commissions to motivate them too.
A part of your marketing strategy should include why potential customers are better off patronizing you against going to the competition.
Help them understand why your product or service is preferable and ensure that you tap into their pain points. This is one of the most effective ways of turning them in your direction.
Another marketing channel that you shouldn’t leave out of the mix is the internet.
According to a survey carried out by Visual Objects, a portfolio website that showcases work from top creative firms worldwide, almost 40% of small businesses in the US do not have a website.
This implies that owning a website automatically gives you an edge over up to a third of your competitors since they would lack an online presence. Building and laughing a website is a lot easier now, given that there are many services available to explore.
It is also essential to have a social media presence — this effectively lends credence to your business. Social media platforms such as Instagram, Facebook, and Twitter are a great way to start.
4. A Workspace That Makes You Want to Work
When you were signing up for a home-based business, you probably imagined doing it from the comfort of your bed. While this isn’t a terrible idea, it isn’t a very great one either.
As tempting as it might be, you would soon realize that nine out of ten times, you would be underperforming. You might decide to take naps at the drop of a hat, which isn’t a healthy habit for your business.
This is why it is practically mandatory to have a proper workspace even though you’re working from home.
Your workspace should be no different from one that you would typically have at a proper office. Model your home office to be this way, and you would discover that you are performing a lot better.
Having a separate room isn’t necessary; however, if you have a spare room, go with it. Get yourself an ergonomic table and chair and use them for only work-related purposes.
This way, you wouldn’t forget that it is your workspace, and in no time, your mind and body would completely adjust to reality.
5. Don’t Forget the Legal Aspect!
Typically, running a home-based business does not warrant having to get special legal permission. However, you might need to get a license or certificate, depending on the industrial niche that your business is in. Go through your local municipal law to confirm that you are not running an illegal business.
If your business idea is hairstyling, or perhaps you are starting a food business, you would need to meet the health or food administration requirements irrespective of where you are working.
If your business involves physical or construction work, you would need insurance since there is a measure of risk associated with it.
While you might be tempted to skip this stage, you really shouldn’t. You need to maintain your reputation, and being caught running an illegal business can lead to your getting shut down.
6. Time Management
Time is the most valuable commodity; there is a fact that it cannot be gotten back. Time is money, so if you’re not managing your time right, it implies that you are throwing away money. In a small business, every penny counts, and this would suggest that time is of paramount importance.
To start a home-based business, you need to be able to separate business from pleasure. Time for work should be devoted solely to work, and distractions avoided strictly.
To manage your time effectively, you need to plan appropriately. Allocate your time right and maximize every second of it.
7. Don’t Do It All By Yourself; Outsource!
Finally, when the business starts to pick up, you need to understand that you would need to hire people. Business success isn’t achieved by working hard; instead, working smart is what cuts it.
Outsourcing certain aspects of the business leave you with time to focus on other elements and work on the expansion.
For instance, the first step is to get a personal assistant to handle activities like responding to inquiries, invoicing, replying to emails, and a host of other activities. And you can easily engage the services of a virtual personal assistant.
The tasks involved in operating a home-based business can become overwhelming after a while. Therefore, to ensure that you remain in excellent physical and mental shape, it is best to outsource.
Starting a home-based business comes with its fair share of challenges. However, it is a lot easier to take on these challenges with a clear vision in mind and a solid plan in hand.
With all the bases that you need to know covered in this article, you can stay rest assured that you have the ultimate guide to starting a thriving home-based business in your hands.