Laying the Groundwork to Start Your Business
Dreaming of starting a home business? There are a variety of reasons why people decide to go out on their own and start a home business. There's a certain appeal of being your own boss that creates a feeling of independence that's hard to deny. Starting a business is an everyday dream that not many are fortunate enough to realize in their lifetime. Unfortunately, not everyone is cut out to run their own business. Working From Home Working at home has its own appeal for many people – but not for everyone. Even if you're not cut out to operate your own business you can still work from home by taking a job that allows you to telecommute – at least a few days per week. Technology is making a work at home arrangements more feasible and more accepted every day. Challenges to Starting a Home Business Neither starting a business nor working from home is always a piece of cake.
Starting a business can be a very risky proposition. You not only need to do your homework, you need to stay on your toes and remain alert to potential pitfalls as well as potential opportunities. Additionally, you need to be able to handle not having a steady income. It also requires the support of your family or others in your household: without that there's a strong possibility that either your business won't succeed or you'll have a poor wor of live and family relationships could be severely strained, sometimes irreparably. You may need to work every day of the week to generate the income you need, but you still need to find time to enjoy your loved ones. An occasional gateway is a perfect way to do this without jeopardizing your business. Working at home requires an environment that's conducive to getting your work accomplished. That means in addition to being self-motivated, you'll need some control over noise and family interruptions. Depending on the nature of your business, you may need to make some substantial changes to your home's environment in order to be successful. You Need to Plan Before You Start any Business Someone once said, "If you fail to plan, you should plan to fail". Most new businesses don't survive – this is not doom and gloom, this is fact, and it's a fact you need to be aware of so you can be among those who not only succeed, but who prosper. The purpose of completing the 10 steps is to determine if you have a workable business idea, if you can reasonably operate your business from home, to help you understand how much money it's going to take, and to help you understand how your family feels about the whole idea. You'll benefit from completing the 10 steps whether you decide to go ahead with your home business idea or not. Make the most of it and, if you don't have to, don't rush it. It's very tempting to think you can skip steps, but if you do you may regret it later. As you go through each step, keep notes of what you've learned. At any point in the process you may encounter an insurmountable obstacle in your path that will require you to go back and either retrace a step or start all over. If you decide to go ahead, your notes will come in very handy when it comes time to prepare a business plan.
Step 1: Decide What Products You Will Sell or Services You Will Provide
Carefully consider these questions: · What do you have to offer? · What makes you an expert? · Do you have all of the education and skills you'll need to compete successfully in the marketplace or will you need to do some brushing up or retraining first? · Does the product or service meet a need? · Is this a seasonal product or service, or can you market it all year long? · How sensitive is marketing this product or service to general economic conditions? When the economy is weak, how do you think your business will be affected? · Will you be energized by doing this - is it something you'll love to do or sell - or are you just going through the motions to try to make some money? The saying, "Do what you love, love what you do" should not be taken lightly.
Your business is going to be your livelihood - you should have a good time doing it. If not, it will be difficult to get motivated at times. If you are excited about your business, your customers will notice and it will be easier to get them excited, too.
Step 2: Know Your Market and Your Competition
Here are a few things to consider: · Who is going to buy your product or service? · Will you market to businesses, to consumers, or to both? · What traits do you think your "typical" customer or client will have? · Is the need for your product or service not currently being met or is it already saturated? · Is there something about what you have to offer that will allow you to beat your competitors? · How will you differentiate yourself from your competition? · What is your value propotition? What is your competitive advanteage?
Step 3: Make Sure You Can Perform the Tasks Needed to Run Your Business
You'll have a lot of daily tasks that will need to get done. If you can't do them, who will? Answer this question honestly. Can you handle the day-to-day general business tasks, like: · setting appointments · ordering supplies · bookkeeping · Marketing · filing · answering the phone · checking and replying to e-mail If you'll have help, great. If you can afford to pay someone else to do some of these tasks for you, all the better. But a great majority of home businesses are a one-person operation starting on a shoestring budget. That means there's a good chance you'll have to do everything or it just won't get done.
Step 4: Make a List of What Needs to be Done to Prepare Your Home for Business
With the product or service you have in mind, can you handle the business from your home the way it is right now? If not, what do you need to do to get it ready? · Will you need space for inventory, supplies, records and/or equipment? · Do you already have an area you can use for your office or will you need to bargain with another member of the family to give up some space? · Is the nature of your inventory or equipment such that special climate needs must be accommodated? · Do you need to add a room, enclose a patio, convert a garage or basement, or stake out the attic? · What kind of power needs will you have and will you have to make any alterations to accommodate them? As you determine what you'll need, keep track of your estimate costs because you'll need them later in this exercise. Handy Tools to Consider ·White bord ·
Multifunction inject
More onyour home office
Step 5: What Restrictions Might Prevent You from Starting Your Home Business
Check your zoning laws before you start your home business. If you live in an area that is subject to the rules and regulations of a homeowners' or community association, check for restrictions. Find out what, if any restrictions exist and how you might work within them before you invest one cent in your home business. Whether you welcome clients or customers to your home, if you plan to be operating machinery, or if you'll need to store hazardous materials inside or outside of your home may all have an impact on what you can and cannot do. Will you need a special zoning exemption? Will getting one be a difficult and drawn out exercise? Is it even legal to operate the business you're planning? Will you need a license? Are your products and services potentially subject to patents, trademarks or copyrights?
Step 6: Plan to Protect Yourself, Your Home and Your Family When you go into business, you'll potentially be exposing yourself, your home and your family to a variety of risks. You need to think about how you'll manage those risks before it's too late. Consider this: · Will you need health insurance? If so, how can you get it and how much is it going to cost? When one spouse is still working, the ideal situation may be to get the other included on the working spouse's health insurance coverage if you can. If not, either the cost or the lack of availability, or both may prevent you from starting your business. · If you're carrying inventory, need equipment or are storing hazardous materials what kind of property insurance will you need to avoid suffering financial hardship? How much will that cost? · Will you need liability insurance? Where can you get it and how much is it going to cost? · What about your auto insurance? Will you be using your car for business? Remember, your homeowners' and auto insurance policies weren't designed to cover your business pursuits or business property so there will be restrictions, limitations and exclusions.
Know what they are ahead of time. Insurance is a major expense of doing business, but some coverages like General Liability may be quite reasonable depending on the nature of your business.operating costs.
Step 7: Learn the Risks and Benefits of Each Type of Legal Business Entity
You'll want to research this issue carefully now, because your decision will affect your startup costs. It will also affect your tax situation and your personal liability for the actions and debts of the business. Leverage the IRS for free tax information on the various types of business entities. Finally, your decision will largely determine what steps you need to take in order to set up your business when you're ready to do so.
Step 8: Determine Your Startup Costs
Calculate your startup costs - the amount of money it's going to take to get up and running. At this point, many of your items are going to be nothing more than estimates, but do the best you can. By completing the previous steps you should have a much clearer picture of your startup costs than before you started this exercise. Here are some additional questions that may help you not to overlook something: · Will you need to hire specialists, like a lawyer or an accountant? · Will you need to buy some office furniture or equipment? · What supplies will you need on hand for Day One? Do you need to purchase a beginning inventory? · Are you going to buy a business or franchise? · Will you have construction costs, and if so, how much needs to be done by professionals and how much can you do yourself? · What can you do to lower your costs? Take your time with this step.
Do some price checking and look for legitimate bargains. You're bound to think of things and adjust your estimates all the way up to your opening day. The closer you get to opening day, the more accurate your estimate will be. Step 9: Consider Your Breakeven, Your Cash Flow and Your Funding Options There are several issues questions you need to considered with this step: · How much will you need to pay your bills until the money starts coming in from your home business? · Will you be keeping your full-time job or is there another breadwinner in the family that can help you until you develop an income stream? · What will your continuing outlays be for items like equipment, salaries and/or inventory? · How many products must you sell or how many hours of service will you need to provide before you reach the break even point?
· Where will the money come from? Will you need to borrow or draw down a savings account or sell some investments and/or assets? · Will you need a silent partner to help provide working capital? · Are you willing to use your home equity to finance your business? · Have you checked into loans from the Small Business Administration (SBA)? · Is there any possibility of getting a grant to start your business? Knowing these answers will help you decide if you can act now.
If not, it can also help you to plan to secure the money you need and help you set a target startup date. Step 10: Gauge Your Family's Support for Your Home Business
Hopefully you won't leave this step for last, but doing so won't diminish its importance. Members of your family, at least those still at home or any family members who may need to make sacrifices or lifestyle changes in order to accommodate your business, need to know what you're up to and how it might affect them. If you have a spouse or significant other or children living with you, your home business will be a big part of their lives too. Communication is key to helping them understand. Ask for their support – you'll find that's much more effective than demanding it. Try to understand where they're coming from. If they have questions, issues, or objections, discuss them openly. Caring and open discussions now help you avoid problems later. Couples who plan to operate a business together need to have a pretty good idea in advance if that will work for them.
It's a good idea to discuss who will be responsible for specific tasks. If you can't agree on this now, there's a very strong likelihood you won't agree on it later. Don't let your business damage your family relationships. We all need an occasional gateway and we all need to keep our priorites straight. A strained family situation is bound to show in your business activities - work hard to keep everyone happy!
Dreaming of starting a home business? There are a variety of reasons why people decide to go out on their own and start a home business. There's a certain appeal of being your own boss that creates a feeling of independence that's hard to deny. Starting a business is an everyday dream that not many are fortunate enough to realize in their lifetime. Unfortunately, not everyone is cut out to run their own business. Working From Home Working at home has its own appeal for many people – but not for everyone. Even if you're not cut out to operate your own business you can still work from home by taking a job that allows you to telecommute – at least a few days per week. Technology is making a work at home arrangements more feasible and more accepted every day. Challenges to Starting a Home Business Neither starting a business nor working from home is always a piece of cake.
Starting a business can be a very risky proposition. You not only need to do your homework, you need to stay on your toes and remain alert to potential pitfalls as well as potential opportunities. Additionally, you need to be able to handle not having a steady income. It also requires the support of your family or others in your household: without that there's a strong possibility that either your business won't succeed or you'll have a poor wor of live and family relationships could be severely strained, sometimes irreparably. You may need to work every day of the week to generate the income you need, but you still need to find time to enjoy your loved ones. An occasional gateway is a perfect way to do this without jeopardizing your business. Working at home requires an environment that's conducive to getting your work accomplished. That means in addition to being self-motivated, you'll need some control over noise and family interruptions. Depending on the nature of your business, you may need to make some substantial changes to your home's environment in order to be successful. You Need to Plan Before You Start any Business Someone once said, "If you fail to plan, you should plan to fail". Most new businesses don't survive – this is not doom and gloom, this is fact, and it's a fact you need to be aware of so you can be among those who not only succeed, but who prosper. The purpose of completing the 10 steps is to determine if you have a workable business idea, if you can reasonably operate your business from home, to help you understand how much money it's going to take, and to help you understand how your family feels about the whole idea. You'll benefit from completing the 10 steps whether you decide to go ahead with your home business idea or not. Make the most of it and, if you don't have to, don't rush it. It's very tempting to think you can skip steps, but if you do you may regret it later. As you go through each step, keep notes of what you've learned. At any point in the process you may encounter an insurmountable obstacle in your path that will require you to go back and either retrace a step or start all over. If you decide to go ahead, your notes will come in very handy when it comes time to prepare a business plan.
Step 1: Decide What Products You Will Sell or Services You Will Provide
Carefully consider these questions: · What do you have to offer? · What makes you an expert? · Do you have all of the education and skills you'll need to compete successfully in the marketplace or will you need to do some brushing up or retraining first? · Does the product or service meet a need? · Is this a seasonal product or service, or can you market it all year long? · How sensitive is marketing this product or service to general economic conditions? When the economy is weak, how do you think your business will be affected? · Will you be energized by doing this - is it something you'll love to do or sell - or are you just going through the motions to try to make some money? The saying, "Do what you love, love what you do" should not be taken lightly.
Your business is going to be your livelihood - you should have a good time doing it. If not, it will be difficult to get motivated at times. If you are excited about your business, your customers will notice and it will be easier to get them excited, too.
Step 2: Know Your Market and Your Competition
Here are a few things to consider: · Who is going to buy your product or service? · Will you market to businesses, to consumers, or to both? · What traits do you think your "typical" customer or client will have? · Is the need for your product or service not currently being met or is it already saturated? · Is there something about what you have to offer that will allow you to beat your competitors? · How will you differentiate yourself from your competition? · What is your value propotition? What is your competitive advanteage?
Step 3: Make Sure You Can Perform the Tasks Needed to Run Your Business
You'll have a lot of daily tasks that will need to get done. If you can't do them, who will? Answer this question honestly. Can you handle the day-to-day general business tasks, like: · setting appointments · ordering supplies · bookkeeping · Marketing · filing · answering the phone · checking and replying to e-mail If you'll have help, great. If you can afford to pay someone else to do some of these tasks for you, all the better. But a great majority of home businesses are a one-person operation starting on a shoestring budget. That means there's a good chance you'll have to do everything or it just won't get done.
Step 4: Make a List of What Needs to be Done to Prepare Your Home for Business
With the product or service you have in mind, can you handle the business from your home the way it is right now? If not, what do you need to do to get it ready? · Will you need space for inventory, supplies, records and/or equipment? · Do you already have an area you can use for your office or will you need to bargain with another member of the family to give up some space? · Is the nature of your inventory or equipment such that special climate needs must be accommodated? · Do you need to add a room, enclose a patio, convert a garage or basement, or stake out the attic? · What kind of power needs will you have and will you have to make any alterations to accommodate them? As you determine what you'll need, keep track of your estimate costs because you'll need them later in this exercise. Handy Tools to Consider ·White bord ·
Multifunction inject
More onyour home office
Step 5: What Restrictions Might Prevent You from Starting Your Home Business
Check your zoning laws before you start your home business. If you live in an area that is subject to the rules and regulations of a homeowners' or community association, check for restrictions. Find out what, if any restrictions exist and how you might work within them before you invest one cent in your home business. Whether you welcome clients or customers to your home, if you plan to be operating machinery, or if you'll need to store hazardous materials inside or outside of your home may all have an impact on what you can and cannot do. Will you need a special zoning exemption? Will getting one be a difficult and drawn out exercise? Is it even legal to operate the business you're planning? Will you need a license? Are your products and services potentially subject to patents, trademarks or copyrights?
Step 6: Plan to Protect Yourself, Your Home and Your Family When you go into business, you'll potentially be exposing yourself, your home and your family to a variety of risks. You need to think about how you'll manage those risks before it's too late. Consider this: · Will you need health insurance? If so, how can you get it and how much is it going to cost? When one spouse is still working, the ideal situation may be to get the other included on the working spouse's health insurance coverage if you can. If not, either the cost or the lack of availability, or both may prevent you from starting your business. · If you're carrying inventory, need equipment or are storing hazardous materials what kind of property insurance will you need to avoid suffering financial hardship? How much will that cost? · Will you need liability insurance? Where can you get it and how much is it going to cost? · What about your auto insurance? Will you be using your car for business? Remember, your homeowners' and auto insurance policies weren't designed to cover your business pursuits or business property so there will be restrictions, limitations and exclusions.
Know what they are ahead of time. Insurance is a major expense of doing business, but some coverages like General Liability may be quite reasonable depending on the nature of your business.operating costs.
Step 7: Learn the Risks and Benefits of Each Type of Legal Business Entity
You'll want to research this issue carefully now, because your decision will affect your startup costs. It will also affect your tax situation and your personal liability for the actions and debts of the business. Leverage the IRS for free tax information on the various types of business entities. Finally, your decision will largely determine what steps you need to take in order to set up your business when you're ready to do so.
Step 8: Determine Your Startup Costs
Calculate your startup costs - the amount of money it's going to take to get up and running. At this point, many of your items are going to be nothing more than estimates, but do the best you can. By completing the previous steps you should have a much clearer picture of your startup costs than before you started this exercise. Here are some additional questions that may help you not to overlook something: · Will you need to hire specialists, like a lawyer or an accountant? · Will you need to buy some office furniture or equipment? · What supplies will you need on hand for Day One? Do you need to purchase a beginning inventory? · Are you going to buy a business or franchise? · Will you have construction costs, and if so, how much needs to be done by professionals and how much can you do yourself? · What can you do to lower your costs? Take your time with this step.
Do some price checking and look for legitimate bargains. You're bound to think of things and adjust your estimates all the way up to your opening day. The closer you get to opening day, the more accurate your estimate will be. Step 9: Consider Your Breakeven, Your Cash Flow and Your Funding Options There are several issues questions you need to considered with this step: · How much will you need to pay your bills until the money starts coming in from your home business? · Will you be keeping your full-time job or is there another breadwinner in the family that can help you until you develop an income stream? · What will your continuing outlays be for items like equipment, salaries and/or inventory? · How many products must you sell or how many hours of service will you need to provide before you reach the break even point?
· Where will the money come from? Will you need to borrow or draw down a savings account or sell some investments and/or assets? · Will you need a silent partner to help provide working capital? · Are you willing to use your home equity to finance your business? · Have you checked into loans from the Small Business Administration (SBA)? · Is there any possibility of getting a grant to start your business? Knowing these answers will help you decide if you can act now.
If not, it can also help you to plan to secure the money you need and help you set a target startup date. Step 10: Gauge Your Family's Support for Your Home Business
Hopefully you won't leave this step for last, but doing so won't diminish its importance. Members of your family, at least those still at home or any family members who may need to make sacrifices or lifestyle changes in order to accommodate your business, need to know what you're up to and how it might affect them. If you have a spouse or significant other or children living with you, your home business will be a big part of their lives too. Communication is key to helping them understand. Ask for their support – you'll find that's much more effective than demanding it. Try to understand where they're coming from. If they have questions, issues, or objections, discuss them openly. Caring and open discussions now help you avoid problems later. Couples who plan to operate a business together need to have a pretty good idea in advance if that will work for them.
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