Starting a home based business is a common step for those looking to create more wealth or leave the daily grind of the rat race. Starting your own home based business requires a great deal of planning to ensure that you are on the correct path to achieving your goals. Many businessess fail without adequate planning, and indeed a home based business will do the same.
There are a few fundamental questions that you need to consider in starting your own home based business.
1. Your motivation
Why do you want to start your own home based business? Understanding why you are starting a home based business will give you better grounding for all future endeavours. This will be the anchor to your purpose in starting your own home based business. Some questions to help you determine why you want to start your own home based business:
a) Do you want to work better hours? not 9-5?
b) Do you want to be your own boss? Why?
c) Do you want to improve your financial position? By how much? When do you want to do it by? Why?
2. Are you prepared
Are you prepared for the demands of starting your own home based business? Starting your own home based business means you will be doing multiple roles within the business. This can be stressful to your physical and emotional health. Some questions to help you determine why you want to start your own home based business:
a) Are you prepared to put in the hours required to suceed?
b) Do you have the support of your family in starting your own home based business?
c) Are you prepared to lower your standard of living until your own home based business is properly established?
3. What skills and experience you have that you can bring into starting your own home based business?
a) Do you have experience in the field you are starting your own home based business in?
b) Are you good at making quick decisions?
c) Are you prepared to learn new skills in starting your own home based business?
4. What are your finances in starting your own home based business? Are you able to fund the initial investments and operating cash flows in the early stages of starting your own home based business?
a) Do you have enough money to start your own home based business?
b) Do you know how much money you can borrow start your own home based business?
c) Are you comfortable taking financial risks in starting your own home based business?
Things you lose that you might want to
think about before quitting your job.
1. Say good bye to a reliable and predictable income.
No job is 100% secure and there is a good argument that being in control of your income via your own small business is more secure than a job (you?re not at the risk of downsizing etc) however it doesn?t feel like that, especially when you start out. Even the oldest most established business cannot be certain sales will keep coming. From week to week you go up and down and are never sure when or where your next sale will come from. You can have great months and bad months and the only constant is unpredictability. A steady pay cheque feels a lot more secure than the ups and downs of your own business.
2. Your business is your life.
When you leave work you leave work. Most small business owners live and breath their business so they don?t ever really leave work. Now I?ve got it pretty good at the moment because I love what I do and I don?t *have* to work much though I choose to work online a lot. That being said I am trapped to checking my email day in and day out, 24 hours a day, which is not ideal. Chances are when you start your business you won?t be working 9-5 or even 8-6. Early on you will most likely carry the show and until you can justify hiring others your hours will be long and you won?t have a weekend. However if you are smart, set realistic expectations and remember life is a balance, then running your own business can definitely be less work than a normal job, if you choose it to be.
3. You may never make real money until you sell your business.
An unfortunate situation in many small businesses is that the owner often doesn?t make much more than an average salary, sometimes less. Now if you are evaluating starting a small business based purely on financial rewards then you might want to change your assessment criteria. Many small business owners don?t make a big windfall until they sell their business and often by the time they are making the sale they will be using the money for retirement. Although it is also true that the only way to become really, really wealthy, besides inheritance and lotto, is by starting your own business.
The reality is that only a small percentage of businesses make their owner really wealthy, the rest stumble along earning an average wage. Of course many of those business owners earning an average wage love their lifestyle and only work as hard as they want to. Running your own business has the greatest potential to make you rich and may never make you rich, but here is the important part, your own business is very likely to make you a happier person if you keep your goals simple and aim for lifestyle over riches. Anyone can get rich but the contented people are rich without material wealth.
4. There is no superannuation, paid leave or sick leave.
You may not think about superannuation very much but it?s nice to know that when you have a job your employer is planning for your future by contributing to your superannuation. As a business owner your employer is you and besides looking after your employee superannuation you are also in charge of your own retirement. This is an added worry that you don?t have when you are working for another business.
Having time off is a concept not familiar to many business owners. Being paid when you have time off is like a dream for a business owner. There are some common myths about business owners working 7 days a week even when sick. If you do things right your business should still function without you when you need time off because of illness or even if you dare to take a holiday. However that being said most business owners find themselves as the most critical wheel in the business system and if you remove that wheel things fall apart. The important skill to learn is that the business owner should work on the business, not in it, but that?s easier said than done and especially early on when funds are tight it?s very like you will be working in the business. Don?t expect a paid holiday.
5. Workmates
There are no work mates for the solopreneur. You can hire employees that may hopefully become friends but the dynamic is always you the boss and them the employees. If you have been used to working in a busy, lively, talkative office full of peers that share the same perspective as you, with Friday afternoon drinks, group functions and shared time complaining about the boss ? you can kiss all this goodbye.
Okay, that?s not entirely true.
Things are definitely different from working in someone else?s business but I?ve seen many small businesses that have great working environments. The difference is as the boss you have to create your own socialisation. You can do this by creating an amazing business culture where all employees are mates and the office is like a party that happens to get work done too. Of if you do not require employees then it?s your job to make sure you don?t turn into a lonely home based business bum. This means flexing your socialising muscles and organising events with other business people (if that?s whom you like to associate with), making sure you stay actively involved in groups and clubs and that you leave the home office now and then to interact with real live people. Much like everything else with running your own business, you are in charge of your social life too
These are some of the key things that need to be considered when starting your own home based business. The above points are often overlooked, and planning stages rushed through when people are starting their own home based business. By considering the above questions, your will have clear indications on why you are starting your own home based business and a reference guide should you run into any difficulties in starting your own home based business.
