How to Start a Successful Home-Based Business
The best type of home-based business is the one you start on your own with hard work, focus, and execution. The business you found on the Internet or heard about from a friend isn’t the answer.
The secret of success is not to buy in to get-rich-fast schemes; 99.9% of these schemes fail before they even get started. Our philosophy has always been that if it looks too good to be true, then it probably is. Remember, there are no free lunches!
By following the steps below, you can make your home-based business a success rather than a drain on your time, money, and relationships.
Evaluate Your Talents.
Think of your talents as what you’re really good at. They’re your personality traits. For instance, you may be a very creative person, or a person who’s really good at attending to details, or a person with a gift for communicating. Your talents form the basis for any successful business venture, including a home-based business.
Examine Your Skills.
The difference between talents and skills is that talents are passive and skills are active. You’re born with talents, but you develop skills over time as you learn.
Put Your Talents and Skills Together and Generate a Solid Business Idea.
The following procedure will work for starting any kind of business, but as we’re focusing on home-based businesses, the question is, “With these talents and skills, what kind of home-based business could I start?” Make a list of the possibilities and prioritize them. Ask yourself some key questions. Don’t censor yourself as you list home-business ideas; you might be surprised by what you discover.
Give Your Business Ideas the Home-Based Business Assessment.
The fact is that not all businesses are going to work well as home-based businesses, and some won’t work at all. You won’t be able to start a sporting goods business in a residential neighborhood, for example, and any home-based business that involves a lot of clients coming and going is sure to upset the neighbors and possibly your family. Go over your list of possibilities and cross off any business ideas that won’t work as home-based businesses. Many people who want to start home-based businesses stop here. As mentioned earlier, the secret to starting a successful home-based business is to work through the entire business selection process with hard work, focus, and execution. If you jump in too early, you run an extremely high risk of investing months of your time, energy, and money in a losing venture.
Determine the Profit Angle.
This is the litmus test for anyone wanting to start a home-based business. You may have a great talent for something and the skills that enable you to express it, but if people aren’t willing to pay you for the product or service, it won’t work as a business. For each home-based business idea, you need to know the answer to two very important questions:
1. How much are people willing to pay for this product or service?
2. Can I make a sufficient income from that?
Let's suppose that you are able to make small, beautiful, wooden sail boats. Because of the time involved, you’re able to make two boats per month. You discover that people are willing to pay $1500 for each boat you produce. The math says that you would have an income of $3000 per month. But have you remembered to calculate and deduct business expenses such as materials and supplies related to boat production? Have you calculated how much money you need to generate per month to succeed? Have you considered your competition, your clientele, and necessary marketing and time to build steady work? Many people put themselves in a negative position by starting a home-based business without considering the profit angle. Business is about profit, and without sufficient profit, you’ll never have enough income to even pay the bills, let alone generate the type of income that will continue to motivate you.
Review your list of home-business ideas and assess the profit-making potential of each. If the answer to either of the two questions above is not satisfactory, cross off that idea and don’t look back. You are the only one who can decide how much income is enough. Many people run a part-time home-based business that supplements their income and are perfectly satisfied with that. However, if you are planning to start a home-based business that will provide all of your income, you have to research the profit-making ability of your business idea very seriously.
Write a Business Plan.
Many people are under the impression that working through a business plan is necessary only if they are going to be looking for a business loan. But the primary reason to do a business plan is to find out if your business idea has a chance of success. So once you’ve chosen a home-based business idea, write a business plan.
The process that you go through in writing your business plan will help you connect all of the important elements to ensure that your home-based business succeeds. And if your business plan indicates that your idea for starting a home-based business is not a good idea, shelve it, choose another home business idea, and go through the same process again.
So, if you want to start a home business, ignore the home-business opportunity ads and forget talking to your friends about get-rich schemes; there are no shortcuts to starting a successful home-based business. By following the steps outlined above, you’ll end up with an idea for a home-based business that truly has the potential to succeed.
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