Working from home sounds like a great idea to many people. In addition to the flexibility it brings to your lifestyle, you’re directly rewarded for your hard work. It may start as a hobby that has the potential to make money. Or maybe you’ve created a product that fills a niche and you’re ready to take it to market.
Starting a home business is a life-changing endeavor and it’s not for everyone. Besides the financial risk, it takes a certain kind of person to successfully clear all the hurdles it takes to get a new business off the ground. Discipline, street smarts, initiative, and determination are just some of the qualities that are needed.
Before doing anything, take a hard look at yourself. If you’re not cut out for running your own business, you want to find out before you sink time and money into it. If you can’t pass this test with a convincing majority of positive answers, working on your own may not be the best fit for you.
• Am I a self-starter who has the discipline to work hard on my own?
• Can I avoid the personal distractions of working at home and stay focused on the business?
• Can I effectively multi-task my time and set priorities on the fly?
• Am I organized and efficient?
• Will I take full responsibility for ensuring the business succeeds?
• Will I devote whatever time is necessary to build the business?
• Am I decisive and proactive, even when I don’t have all the facts?
• Do I need the security of a regular paycheck?
• Do I have the skills required to negotiate aggressively?
• Can I work effectively while under stress and tight deadlines?
• Do I have the drive and motivation to do whatever it takes to keep the business going during tough times?
• Can I work effectively with all kinds of people?
• Do I have the integrity and confidence to earn the respect of suppliers and customers?
• Do I have the business skills to maintain excellent financial records?
• Do I have a tendency to give up when things aren’t going my way?
• Do I have a take-charge attitude and perseverance that will overcome problems and obstacles that get in the way?
Advantages and Disadvantages
If you believe you possess the personal qualities to start a home business, there are other considerations that should be carefully weighed before taking the plunge. If you have a family and will be operating the business exclusively from your home, a comprehensive discussion needs to occur to get all the issues on the table well in advance. A home business will affect them in ways you can’t even imagine at the outset, so encouraging open communications is an absolute must.
• I’m doing something I really want to do with my life
• I’m my own boss and in control of my own destiny
• I will reap the rewards for all my hard work
• I won’t have to commute to work, saving time and money
• I’ll have a personal sense of accomplishment for my successes
• To some degree, I’ll be able to set my own work schedule
• Will disrupt family life, especially at the beginning
• Initial income may be far below what I was used to making
• Investments for equipment will be needed
• Will require devoted space in the home that may not be currently available
• Will require long hours of hard work, including nights and weekends
• I’ll have to learn to do multiple tasks and allocate time to do all of them
There are many important things to consider in order to launch your business, including your business model, business plan, type of business, legal requirements, capital requirements, financial record-keeping, potential suppliers, market analysis, marketing plan, equipment, and employees. Again, it’s useful to develop a checklist of questions to help determine if you’re on the right track.
• Have I dealt with all the business issues that are likely to arise?
• Is there a real market demand for my product or service?
• Do I have other sources of income or savings to sustain me while I get my business up and running?
• Do I have enough available space in my home to operate a business?
• Have I addressed the need for business insurance?
• Are there any zoning issues that apply to the type of business I want to conduct?
• Are special permits or licenses required?
• Do I have enough money to start the business?
• Do I have access to additional money if needed, either from investors or outside financing?
• What equipment and other resources will I need to purchase?
• Have I determined the estimated cost of production and retail price needed to make a profit?
• Do I have an attorney and accountant available to assist me in setting up my business?
• Do I have the expertise to create a professional website?
• Do I have all the information I need to make a sound decision about starting my business?
Talk to other people you know who started a home business. Ideally, you should talk to at least one who succeeded and one who failed. Grill them with questions about their experiences and what they learned along the way. Ask them about the process they went through in arriving at their decisions to proceed. What didn’t they know at the beginning that they wish they’d known, and would this have changed their ultimate decision?
Before making a final decision, go over your thought process with someone you trust and respect. If you decide to go for it, make sure your business plan has a couple off-ramps that allow you to change your mind. Once you’re committed, you’ll need to pour everything you’ve got into it to make it work.