6 Steps to Take Before Starting a Home Business
A lot of people are thinking about starting a home business these days. In a poor economy, a home business can be your chance to bring in a bit or a lot of extra money and give you some extra security financially.
But it’s a risk too. You may not earn anything. You can lose money if things just don’t work out. And it takes more planning to succeed than many people will tell you.
These are some steps to take as you prepare to start a home business:
1. Plan out what you want to do.
I don’t mean in a general way, such as “I want to start a website about my garden.” That’s nice, but it’s not going to really get your business going.
How are you going to stand out from all the other businesses similar to yours?
Who do you want to attract as customers?
How will you earn money from it?
Will you quit your job (if you have one) or will you work your hours around it?
You don’t have to write these out if that’s not your style, but it helps. At the very least you need to have given these topics some serious thought.
2. Find out what’s really involved.
Most home business opportunities are surrounded by a cloud of hype that makes it sound far easier than it is. They hide just how much work is involved in having a chance at success, as well as the odds of success. You need to know what you really need to do.
This can have a huge impact on how enthusiastic you will be for a particular opportunity. When something turns out to be far harder than you planned for, it really slows down your success. It can even take away your passion for your project. Make sure you go into your home business with your eyes open as to the amount and kind of work it will take.
The wonderful thing about the internet is how much information there is out there on just about everything. There’s probably someone blogging about what you want to do or something sufficiently related. You may even be able to find a mentor in your industry to really give you a good view of the work involved, what works and what doesn’t.
3. Do your market research.
This is in more depth than the general planning in step 1. You need to have a clear idea as to who your potential customers are. What do they do? What will they buy? Where will you find them?
Forums can be very useful for market research, and even for marketing later on. Find one that has the kind of visitors you would like to have for your site. Do not start posting right away. Read what other people are posting. See how they interact. Pay attention to the questions that are asked.
This information can help you to understand what your customers want later on.
When you start actual marketing, don’t start posting blatant ads in the forums. Use the signature space in your profile, if permitted, to advertise your business. Otherwise, just be a regular member of the forum. Ask and answer questions. Chat. Be useful and friendly.
4. Use the information you’ve developed so far to build a business plan.
Most people find it helpful to write out their business plan. It should have the goals you’ve figured out in the first three steps, plus how you want to achieve them.
You can include both short term and long term goals in your business plan. Do not just include financial goals. Plan out things such as how much work you want to get done on a daily, weekly and monthly basis. Plan out how you’re going to attract newsletter subscribers and what you’re going to send them. Plan out how you are going to go about marketing your business.
You do not need to make this formal unless you need to get a loan from a bank or other funding. For most home businesses, this will just be for your personal information and goal setting.
5. Get family support.
While it may seem as though you should get this before all your planning, it can help to have something to show your family about your plans before you talk it out with them too much. This can be particularly true if you’re expecting resistance to your plans.
Pay particular attention to objections. Encourage them, in fact. You need to know not only where things may be hard on your family but if they see any weaknesses in your plans.
6. Get the money together for your home business.
Many home businesses are cheap to start. That’s both good and bad. It means that just about anyone can start a home business. It also means that ANYONE can start a home business, and you may have tons of competition.
Be realistic about the money you need. It’s not just the startup cost. You will probably have marketing expenses. Some expenses will recur every month. Be prepared to deal with some surprises too.
Make sure you don’t invest more than you can afford to lose. There’s nothing wrong with taking a risk, but you don’t want failure to be an utter disaster for you and your family.
If you’re relying on the business for all your income, be prepared to live frugally and have several months’ living expenses available to you. You cannot afford to assume that success will come soon enough to not worry about how you’re spending your money overall.