How to Start a Home Based Business
Many entrepreneurs find themselves in a quandary when trying to come up with new ideas for launching a business. If this is a problem you have, take comfort in the knowledge that you’re not alone! There are actionable steps you can take to build a business literally from nothing that has a chance to succeed and thrive, but simply saying “I want to start a business” isn’t enough. By following this simple road map, you can go from “I want to start a business” to “My business is doing quite well, thank you for asking!” Here’s how.
- What’s your skill set?
Like it or not, you’re going to have to manage every aspect of your business in one capacity or another at first. This means you’ll have to be able to think like a lawyer, accountant, financier, production manager, fundraiser and step into other more specialized mindsets as required, depending upon the type of business you’re considering. After realizing that “I want to start a business,” sitting down and mapping out your skills and planning to recruit talent who has the ones you lack and are most likely to need is the most important step in making your venture successful.
- What’s your niche?
You probably do have an idea already, whether you realize it or not. You’ve discovered you have a marketable skill, that there’s a gap in the market for left-handed utensils or tools, that you can make better cupcakes than your local bakery or can write code that makes a laptop sit up, roll over and beg. The next step is to figure out how your skill set lines up with a hole in the market coverage that you can fill. This will help you identify the structure and type of business, as well as other needs.
- What’s your financial situation?
Unless you’re sitting on a trust fund worth a sizable pile or have done well with investments, you’re probably going to need to get loans, seek crowd funding or go through other avenues to finance your business starting out. Unfortunately, most banks get very nervous when someone comes in with “I want to start a business that will make a million dollars this year!” and have no plan, collateral or credit. To counter this, you’ll need to tally up your assets and what you can offer as collateral against a loan and/or plan a crowd funding campaign.
Now you know what skills you have, what niche in the market you’re filling and your financial situation, you need to plan out your business launch strategy. You should plan for at least five years, starting with a monthly breakdown for the first 12-36 months and then progressing to quarterly or annually for the next 2-4 years after that. Be sure to account for expenditures, income, taxes and leave some extra for miscellaneous costs, such as licensing and other fees that may sneak up and surprise you. You should plan for at least two years’ operating costs before you begin to show a profit.
- Are you in the right place?
Not every business is going to lend itself well to certain locations. Knowing local laws, building codes and other regulations that can and will impact your business is important, but you should also be aware of the gestalt mood of your area. For example, some places may not be as friendly toward tech, while others may have stricter regulations for adult-oriented businesses. Seeing a gap in the market isn’t necessarily enough. In some places, those gaps exist for a reason and you need to understand why before you rush in to fill the breach.
By the time you’ve gotten to this point, you ought to have a pretty good idea of which home based business you want to run, how and where it will be structured, operated, funded and managed. You should also be familiar with the local factors that will impact your business and have a plan for working within those parameters. If you have these things, you can legitimately say you’re ready to start your business and take actionable, simple steps to make it a reality. Now that you know what your business is and how it ought to be set up, the next step is up to you. “I want to start a business” isn’t a plan, but these steps will get you to one that gets you off the ground. Plan your work, and then work your plan for the best results!