Operating a home based business can be one of the most liberating and financially rewarding experiences for new entrepreneurs. Startup and ongoing operating costs are usually substantially lower for home businesses compared to more traditional companies. Because of these dollar savings, more people are able to start and run a successful business out of their home.
Starting any kind of business requires planning, proper capitalization, and some hard work. However, a home business presents certain opportunities that can make the startup processes quicker and more straightforward. The following seven steps can be used by anyone to help start a successful, home based business.
#7 Go With What You Know: When determining what business to start, take a personal inventory of your skills, background, hobbies and interests. Use this inventory and start thinking of business ideas that can leverage your existing skills and knowledge. Having some background or experience in your future business will help take the guesswork out of a majority of decisions you will likely face.
#6 Focus on Self Discipline: With the proper self discipline, personal productivity will skyrocket when working from home. Home based business owners are usually free from pointless meetings, needless presentations, and lurking colleagues. However, other distractions abound at home. If you do not already have a quiet place to set up your home office, make sure to create one. Set expectations with your friends and family that your privacy, when working in your home office, should be treated with the same respect as any formal office setting.
#5 Form a Legal Entity: Make your home business official by forming a legal entity. You do not need to establish an expensive and complex corporation. In many cases, a sole proprietorship will do. File the necessary business forms and licenses with your local government agency and make it official! Not only will your business be in good legal standing, you will take your startup efforts more seriously after this step is complete.
#4 Set and Follow a Schedule: Home based businesses come with a tremendous amount of freedom and flexibility. This is why we love them! Make the most of your time by setting and following a routine schedule. Keep in mind that your daily routine may not necessarily look like the typical 9-5 workday. Set a schedule that works for you and your customers. When possible, arrange working time to match the hours of the day you are naturally more alert and productive.
#3 Keep Accurate Records: Maintaining accurate, up-to-date financial records is an important part of running any home based business. Proper bookkeeping will increase your visibility into business cash flow and will help reduce the possibility of a tax audit. Keep in mind; never commingle personal and business finances! This is a common mistake for new home business owners and can introduce a host of financial liability issues down the road.
#2 Start with a Service: Consider starting a service oriented business. Compared to product based businesses, service businesses can usually be started much more quickly and with less startup money. Service businesses eliminate the need to manage inventory, complex fulfillment, and sales tax. Since most services are performed at an external location, running your service business from your home is typically quite easy.
#1 Fund Your Business Properly: This final step applies to every business and is equally important for all. Before starting your home business, carefully plan out your expected startup costs, ongoing expenses and revenue projections. If your home business will be your sole source of income, calculate your short-term living expenses as well. Make sure that you have enough personal savings to cover your living expenses while you establish a positive business cash flow.
If your dream is to own your own business, get started today! Starting a home based business does not have to be a complicated, drawn out endeavor. Put excuses to the side, make up your mind to get started today and do it! Following these simple, seven steps will help you realize your dreams of home business financial freedom.
Nathan Cracraft is Managing Editor for the small business website MySmallBiz.com. The site caters to people who want to start their own small business and need some help coming up with ideas. For access to hundreds of categorized, small business ideas and thousands of helpful startup resources, check out MySmallBiz.com MySmallBiz.com .
New ideas and resources are added weekly.
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