Things To Consider Before Starting A Home Business

by WorkFromHome on November 7, 2011

Every day thousands of people are either considering or are launching a new home business. It is an exciting step because running a home business provides a feeling of independence that is hard to deny. Unfortunately, the majority of these new home businesses will fail. They will not fail due to a lack of capitol or the lack of work put into them by the owners. They will fail because of a lack of planning before the business was launched. The only way to avoid this situation is through careful planning right from the start. Before you draw up incorporation papers or design advertising, here are some things to consider when starting a home business.

Know Your Market

Although you may be convinced that the product or service offered by your home business is the best thing since sliced bread, the market may think differently. Unless you are offering something truly unique, most markets are highly competitive. That is why large corporations spend millions of dollars per year on market research. It is important to clarify up-front questions like who is going to buy your product or service, what is the best age group to target for advertising, is your potential customer base already over saturated and how will your business be different from your competition? Not knowing your market before you start your business is one of the surest ways to face failure instead of success.

Know You Can Handle The Tasks

The majority of new home businesses are one-person operations started on a very tight budget. More than likely you are in the same position, which means you will have a lot of tasks to complete on a daily basis. You need to be sure that you can handle all of the takes that running a small business requires like setting appointments, returning phone calls, bookkeeping, marketing, ordering supplies, replying to e-mails plus actually completing the work that provides income. That’s a lot of tasks for one person to handle alone and one of the reasons many home business owners burn out. If you think these tasks through and see yourself in a position of being overwhelmed, you may need to start your business very slowly and work towards an income level that will allow additional employees.

Understand The Legal Barriers

Before starting any home business it is vital to check local zoning laws, ordinances and business regulations that may impact your operations. In some cases, home businesses are prohibited because of zoning laws or community association by-laws. In other cases where home businesses are allowed, there are requirements for obtaining a business license or the need to receive a special zoning exemption. Before investing a dime in a home business, be sure you fully understand any legal barriers that may stand in your way. Not doing so could lead to a complicated legal web that will require a substantial amount of money to unravel.

Determine Your Start-up Costs

Too many home businesses fail because people did take the time to thoroughly determine the amount of money it will realistically take to get their business up and running. For many types of home businesses, there are costs that must be covered before the business is even launched. It is important to clarify up-front cost factors such as if you will need to hire a lawyer to incorporate the business, what office furniture or equipment will need to be purchased for completing your work, what supplies you will need and if there are any permits or licenses that will need to obtained to keep your business legal. Some of these start-up costs may be estimates, but estimate as closely as you can and determine these costs right up to your starting day.

Gauge Family Support

All of the best home business plans in the world can fall apart very quickly if family support is not gauged and clarified right from the beginning. Operating a business out of a home usually requires sacrifices and lifestyle changes for all family members. These changes can often be very confusing and stressful, especially if there are young children involved. Before starting your home business, discuss your plans with family members and clarify any questions or concerns they may have. If possible, try to involve your family members in the business activities. It will be much easier for them to adapt to changes if they feel a sense of contribution to your dreams and goals. No business is worth damaging your family relationships. More importantly, a strained family situation is certain to affect your business activities in ways that will cost you customers and profits.

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